The Creator Economy: What Your Business Needs to Know

Bloggers, TikTokers, recipe-testers, podcasters, YouTubers, teachers, photographers… there are just a few examples of the 50 million people worldwide who identify as “creators.”

And they’re all part of the growing Creator Economy. 

It’s a network of online content producers monetizing their skills, expertise, and—most importantly—their audience to help businesses reach their target customers and sell products or services. 

Here’s what you need to know to tap into this opportunity. 

The Creator Economy: Key Features

If you’re online, you know the creator economy. Common examples of this marketplace in action include:

• Company-sponsored posts on your favorite social media platforms
  
• Monetized YouTube channels that pay creators based to put ads on their videos
  
• Affiliate links to purchase the same outfit as popular influencers

Simply put, it’s when online creators partner with businesses and companies to promote products, services, or ideas to their audience. 

Notable features of the creator economy include:

• Diversity: The State of the Creator Economy 2022 report provides interesting insights from a survey of over 2,700 creators. It shows that creators fill every niche area, use all platforms, and are from any demographic.
  
• Growth: The creator economy is steadily on the rise. Influencer marketing has more than doubled since 2019 and is forecasted to keep growing as more businesses devote marketing budgets to it. 
  
• Impact: The creator economy is growing because it’s working. It’s an impactful form of marketing today because it meets consumers where they are, keeps pace with culture, and makes companies and businesses relevant. 

Using the Creator Economy in Your Marketing Strategy

With its rapid rise to prominence and potential impact on consumers, the creator economy is the new face of digital marketing. 

Businesses are starting to devote large parts of their marketing budget to working with online creators. 

Why? 

Because the right content creators reach your consumers. Your ideal customer is online right now—shopping, connecting, relaxing, and learning. 

They have favorite accounts, channels, and influencers that they’re already following and who they trust. 

If you tap into those already-established networks, you’ll have a larger platform for your product or service. 

There are many benefits to businesses that use the creator economy as part of their marketing strategy: 

• Relevance: Stay on top of current social trends so your company builds a reputation for being relevant in today’s culture. 
  
• Brand recognition: Creators with large platforms can help build brand exposure and recognition.
  
• Authenticity: People love creators because they’re real people. Authenticity is an important part of the creator economy because it builds trust. 
  
• Sales: Content creators are like a trendier extension of your sales team. They’ve built an audience that, when leveraged correctly, can become a whole base of new prospective clients for your products or services. 

3 Steps to Leverage the Creator Economy

It can be daunting stepping into the creator economy. Where do you start? Here are three steps businesses can follow to leverage the creator economy. 

1- Engage in Market Research

This is important for any type of marketing activity. You need to know your audience, your competitors, your goals, and your budget. 

Think about these areas as you research the creator economy: 

• Types of creators: Who’s out there? Who could you partner with? 
  
• Best platforms: Where are your ideal customers hanging out online? 
  
• Partnership options: What’s the difference between sponsorships, paid ads, affiliate marketing, and subscriptions? 
  
• Competition: How are your competitors engaging in the creator economy? 

In addition to market research, you need to become well-versed in some of the practical aspects of the creator economy. Two big ones are:

• Expenses: How much does it cost to partner with creators? How much budget can you devote to this? 
• Legal issues: Do you know the rules surrounding influencer marketing? Get familiar with the Federal Trade Commission’s (FTC) guidelines. 

One good place to start with market research is tuning into the latest trends in business and entrepreneurship. Check out our 10 essential podcasts for entrepreneurs for some inspiration!

2- Shortlist Creators for Partnerships

Once you’ve spent some time researching and understanding your market and the industry, shortlist some creators you may want to partner with. 

Remembering your target audience and where they spend time online is key. With that in mind, consider these guidelines: 

• Bigger isn’t always better: You might automatically think of influencers and creators with millions of followers, but small creators with engaged niche audiences can also be impactful. 

Hootsuite categorizes influencers into four groups: nano-influencers (>10,000 followers), micro-influencers (10,000-100,000), macro-influencers (100,000-1 million), and mega-influencers (1 million+). Smaller influencers are likely to be more cost-effective and, depending on their audience, may better represent your target customer as a niche audience.

• Match style, tone, and “vibe”: When looking for creators, choose those that align with your brand’s image. If you primarily cater to adults ages 50+, a 22-year-old TikTok star isn’t likely to be the right fit. Make sure you spend time looking at the creator’s past content to sense their personality and style, ensuring it’s an obvious fit. 

As you shortlist potential creators to partner with, start following them online. Engage with their content regularly as this will both familiarize you with their style and show them you’re a good potential partner who understands what they’re about. 

3- Collaborate with Content Creators

After creating a shortlist of creators, start reaching out to them. The best partnerships are always organic and authentic. Ideally, you’ve been following them for a while and can use that as your “in.” 

Connect about what you like in their content and why your business would be a good partnership, aligning with their audiences’ interests and values. 

When discussing partnerships, here are a few things to keep in mind: 

• Form a creative partnership: They’re called content creators for a reason—they’re creative! They know the best Instagram reel tips for engagement, for example, so lean on their expertise.
   
• Track metrics: Make sure you arrange a way to track metrics on your sponsored posts. You can provide a trackable discount code for the influencer’s followers, request detailed reports on engagement and reach, or use branded content tools such as Facebook Business Manager. 
  
• Be transparent: Be clear and upfront about what you’re asking for and what you’re willing to pay for the services. Always be open and straightforward so that you maintain a positive working relationship.  

As new platforms, creators, and marketing opportunities arise, you’ll have to pivot and adjust your strategy. Make it a point to stay on top of trends and keep room in the budget for creator partnerships as part of your small business marketing strategy. 

The creator economy is changing the business landscape, providing opportunities to connect with your ideal audience in an authentic, engaging, and impactful way. And it’s only going to grow, so join in today!

If you’re a small business owner or independent professional and you want to grow your business in an innovative business community, book a tour of Co-Balt today.