Creator economy outlook for 2023 Part 1: Year of micro & nano influencers and innovation
The other day, global creator commerce company Whalar announced a first-of-its-kind full-funnel measurement solution for the creator economy. The strategic collaboration includes, according to a release, some of today’s most forward-thinking platforms – Element Human, GWI, NetBase Quid, Nielsen, Tubular Labs, and VidMob.
The industry has proprietary metrics and formulas that give brands potentially flawed directions in measuring success. Creator content should be measured the same way as all media. These full-funnel solutions harness the strengths of each partner to give brands the right tools to scale and measure any type of creator-led campaign effectively. Ultimately, helping brands be more confident in reaching and engaging communities within the Creator Economy – leading to more impactful business value, says the release.
Gaz Alushi, President of Measurement & Analytics, Whalar, said: “Marketers have always measured what matters, the creator economy is no different. The creator economy is here to stay and measurement needs to expand and grow with it to ensure there is rigor in helping the industry understand its effectiveness and impact. These solutions allow marketers to measure what matters and actually trust what is being measured.”
It indeed is a welcome development, which will boost the creator economy in multiple ways. In this two-part report, Adgully deep-dives into the content creator ecosystem to find out the trends that will drive this economy in 2023, the engagement with brands on the one hand and with consumers on the other, the emergence of virtual influencers, and much more.
According to some estimates, the creator economy is used by 75% of marketers. The number is likely to soar to as high as 86% in the next three years. Analysts feel that in the days ahead, creators, tired of competing with the fickle social media algorithms, will seek to create an audience base outside of social platforms. They will want to own their content, without having to worry about losing their community overnight if something goes wrong.
As an industry, influencer marketing is expected to reach $22.2 billion by 2025, says Socxo CMO Ajit Narayan. And new tech and trends are emerging as we speak. Therefore, he adds, it’s in the brands’ interest to stay nimble to adapt, experiment and use whatever comes their way.
According to Narayan, brands would like to find a middle path, instead of spending big bucks on a big influencer, brands are choosing to work with Nano and Micro-influencers who have a follower count between 1K and 50K. This trend is only set to grow further. Smaller influencers with a loyal base and high engagement make it more affordable and trustworthy for brands, especially the mid-sized and smaller ones.
According to him, the overall growth of influencer marketing in India can be expected to be at 20-25% CAGR, which will be at par with the global projected growth. More emphasis will be on nano and micro-influencers for large and small-scale businesses as they are more closely connected to their followers, which is more impactful for a targeted approach. He adds that there will be a higher level of awareness towards the authenticity of content among influencers, brands and audiences, enabling the entire segment to become a more reliable ecosystem.
One of the key changes to influencer marketing will be in the form of consumer interaction with the brand, notes Nidha Luthra, Executive Director, Thought Blurb Communications. “Unlike celebrity endorsements, the consumer has a chance to converse with the influencer and with each other. Ideas, suggestions, concerns and complaints will be addressed to the influencer. In this way, the influencer becomes the surrogate voice of the brand. To use this tool effectively, influencers need to be brought into the brand fold. Their personality and image become the brand's own identity and personality. Of course, a certain amount of coaching and oversight would be required to apply influencers well. This is akin to directing an actor before a movie scene. Only, in a long-term manner,” she adds.
Creativity is a category with no limitations; in 2022, the creator economy had remarkable growth, points out Danish Malik, Co-Founder and CEO, Boomlet Media.
According to him, 2023 will be the year of innovation. Brands and creators will need to emphasise bringing innovative ideas to connect with the target audience with a personalised approach. “In contrast to the entertainment industry, content creators have garnered an enormous following across social media and online streaming platforms. In the upcoming years, brands will collaborate with creators using a multichannel approach to utilise their reach effectively,” says Malik.
Key trends in the segment in 2023
According to Ian Goh, Co-founder & CEO, Tiki, one of the key trends in influencer marketing is the increasing importance of authenticity and transparency. “As consumers become more savvy and aware of the potential for sponsored content, they are looking for influencers who are genuine and honest about the products and services they promote. This has led to a shift away from traditional celebrity endorsements and towards the use of micro-influencers and everyday people who have built up a following and a level of trust with their audience. Another trend in influencer marketing is the use of user-generated content, in which brands encourage their customers to share their own experiences with a product or service. This can help to create a more authentic and engaging campaign message,” says Goh.
Marketing has moved to a new horizon in the last five years and influencers are one of the main frontiers of this change, maintains Angad Singh Manchanda, CEO & Co-founder at Chimp&z Inc. According to him, the more established influencers have been gaining from brand collaborations and platform incentives for a while now.
Manchanda further adds, “However, we’re currently seeing an increased demand for micro and nano influencers and their tightly-knit community of loyal followers. These upcoming influencers are considered genuine and more authentic and have a deeper connection with their audience. I can say that Micro and macro influencers are going to take centerstage in 2023 and good content will remain a winner whether it’s from a celebrity or a macro influencer. Brands will also be on the lookout for creators who present a niche theme within their content. This will help them target and promote to a very specific audience. We will also see a higher influencer presence on not just social media platforms, but also on emailers, billboards, and any other brand-owned media letting companies get the most out of their influencer marketing budgets.”
While 2022 has observed impressive growth in influencer marketing, one can expect that more brands will incorporate influencer marketing into their marketing mix as a key focus area, says Danish Malik.
Ian Goh adds here that short-form video entertainment platforms have led to the rise of a new generation of creators who are able to earn a living through their online content and interactions with their audiences.
“There are several ways that creators can monetize their talents in the creator economy. Some popular methods include advertising, brand partnerships, subscription-based platforms, and the sale of merchandise. Additionally, many creators are able to generate revenue through their interactions with their audiences, such as through fan donations and virtual gifts.”
The creator economy, according to Goh, has already had a significant impact on the entertainment industry. “As more people turn to online social platforms to create and share content, traditional entertainment companies are facing increased competition from independent creators. This has led to a shift in the balance of power in the industry, with creators having more control over their own content and more opportunities to reach audiences directly,” he says.
Manchanda feels that creators have already brought a lot of disruption in the way the Internet functions. “They have, in fact, created an entire economy on the simple approach of Individual creativity and have stirred the way brands and companies think and go about their marketing. They used their creativity and the power of virality to take away the power of mass communication from the hands of a select few and completely decentralised the entertainment industry. We have seen platforms like Instagram focus more on the creator economy and give them a platform to help shape their platform’s future. They have gone up on hoardings and have gone into retail with their brands. The algorithm will work in favor of creators who produce regular and unique content to gain greater monetary benefits,” he says.
According to him, while bigger platforms are working to empower them now, many creators might start looking into gated content that will require loyal followers to pay a subscription for access. This will reduce the creator’s reliability on the platforms, giving them more flexibility with what they produce while also acting as an added source of income.
(Tomorrow: Part 2 – Brands and content creators, Virtual influencers, the Metaverse, use of AI-generated imagery, and much more.)