How To Get Your Business In The Creator Economy.

  • By Fanbase User
  • June 20 2024 · 5 min read

Forget what you knew about creators or influencers like Mr. Beast and Charli D’Amelio who dominate YouTube, Instagram, and TikTok. Content creators are silently rewriting the innovation and strategy rule book for established companies, especially in the consumer goods and services industries. By transforming how consumers search for and use products, creators are: 1) driving demand for specialized products and services; 2) accelerating product life cycles; and 3) changing what customers value.

Fanbase, a social media platform revolutionizing the creator economy, embodies this transformation. Unlike traditional platforms, Fanbase offers monetization features like monthly subscriptions, content locking, and tips, enabling creators to maximize earnings and engagement without relying solely on advertising revenue. This shift towards direct monetization is reshaping the creator landscape, compelling businesses to adapt.

While creators’ influence hasn’t gone unnoticed by marketing divisions, their role as change agents has largely been overlooked by other C-suite leaders. Our analysis suggests that companies must rethink their strategies to stay competitive in this new environment.

Understanding the Creator Economy

The full force of the creator economy has been difficult to detect, partly due to its immense size and impact. Using data from social media analytics firm HypeAuditor, we conservatively estimate at least 40 million economically consequential creators worldwide, defined as creators with more than 1,000 followers who actively post content. If each creator influences $10 worth of spending among just 1% of their followers per year, they will impact $130 billion of purchasing decisions annually.

Notably, smaller creators dominate this landscape. While mega-influencers like the Kardashians are well-known, nano and micro creators, with fewer than ten and fifty thousand followers respectively, constitute the majority. On TikTok, nano and micro creators comprise 76% of all creators, and on Instagram, they make up as much as 96%. These smaller creators, producing niche content, are driving the disruptive forces of the creator economy.

Most creators have small audiences, but their influence is significant. For example, Crazy Glass Lady, who creates tutorials for making glass and resin ornaments, has just 15,000 subscribers on YouTube. Yet, her posts typically receive engagement from 19% of viewers, nearly ten times the average rate. Generally, micro creators command engagement rates seven times higher than mega-influencers.

How Creators Are Changing Consumer Behavior

Based on interviews with creators and industry analysis, we believe that smaller creators pose a unique disruptive threat for three reasons: they create demand for specialized products, teach customers new skills, and accelerate product life cycles.

1. Creating Demand for Specialized Products

Creators alleviate the friction of information overload for consumers by curating and spotlighting select products. They simplify the search process, helping consumers discover niche products. The mechanical keyboard community is a prime example, where creators introduce and recommend specialized components and accessories.

2. Teaching Customers New Skills

Creators make newly discovered products more valuable by teaching consumers how to use them. They demystify complex products through demonstrations and tutorials. For instance, beauty creators have popularized advanced makeup techniques, and sous vide cooking, once limited to professional chefs, is now common in home kitchens.

3. Accelerating Product Life Cycles

Creators frequently introduce new products to maintain audience interest, accelerating product life cycles. The dynamic nature of digital content means products can quickly rise to viral status and just as rapidly fall out of favor. This rapid turnover challenges traditional organizations to adapt swiftly to changing trends.

Strategies for Competing in the Creator Economy

Incumbent firms must rethink their strategies as the creator economy reshapes the product landscape. Traditional acquisition strategies may no longer suffice due to the rapid pace and virality of product life cycles. Companies need sustainable strategies that leverage creators to expand market opportunities.

1. Develop an Asset-Light Operating Model

Identify areas in the value chain for partnership or working with fewer but faster suppliers. This is effective when entering new markets or introducing new products.

2. Cultivate Collaborative Partnerships with Creators

Foster collaborations with creators to develop innovative offerings that resonate with niche markets and alleviate concerns of inauthenticity.

3. Explore New Positions in the Value Chain

Consider roles as suppliers, distributors, or partners for creators to tap into the creator economy and secure a share of growing niche markets. This is crucial for large firms losing market share to indie brands.

4. Leverage AI and Predictive Analytics

Use AI and predictive analytics to stay ahead of customer trends and rapid changes in consumer demand.

Embracing the Creator Economy

Fanbase, a social media platform revolutionizing the creator economy, embodies this transformation. Unlike traditional platforms, Fanbase offers monetization features like monthly subscriptions, content locking, and tips, enabling creators to maximize earnings and engagement without relying solely on advertising revenue. This shift towards direct monetization is reshaping the creator landscape, compelling businesses to adapt.

While creators’ influence hasn’t gone unnoticed by marketing divisions, their role as change agents has largely been overlooked by other C-suite leaders. Our analysis suggests that companies must rethink their strategies to stay competitive in this new environment.

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