It became clear to me over the past year that the space that I had chosen to focus the efforts of my startup -- the Creator Economy -- was being intertwined with a relatively newer space: influencers and influencer marketing.
I had never used the term influencer to describe what it was I was doing, though the response I would sometimes hear when explaining the company was something along the lines of “oh yes, you deal with influencers”.
The term influencer started gaining traction at the start of 2017, and its popularity peaked in July of last year, based on data I gathered from Google Search. Merriam-Webster added the word influencer to its dictionary last May, providing a stamp of acceptance for a word that has been in use since the mid-17th century. They define an influencer as a person who is able to generate interest in something (such as a consumer product) by posting about it on social media.
18-year old Emma Chamberlain was in the news this past week for gracing the cover of Cosmopolitan magazine’s February issue, and for a comment included in the cover story. She said, “I think the term ‘influencer’ is kind of disgusting. Let’s use me as an example: if someone is calling me an influencer, they’re saying my job is to influence, and I don’t think that’s true. I prefer to entertain and be a friend. I don’t want to influence.”
Emma’s comment resonated with me. As much as she detests influencer as a label to describe her or her profession, I have rejected accepting it as an accurate headline term for the industry.
Emma calls herself a YouTuber in the article, a word the Oxford English dictionary added in 2016. The term YouTuber was 23 times more popular than influencer at the start of 2017, and is now just 4 times more popular, according to Google Search. The search trendline shows me what I have witnessed in the market -- the co-mingling of terms that I have often felt mean two different things.
When I worked at YouTube, it was quite straightforward to refer to the creators on the platform as YouTubers. Several years ago, I started hearing from creators that they rejected the label YouTuber. They were active on other digital platforms. They were distributing content, or building a business off of YouTube. YouTuber was a limiting term, just as I feel today influencer is a simplistic way of describing creators.
When I left YouTube in 2018, I recognized what I would be building at Next 10 Ventures would have strong roots in the YouTube platform, but the work would not be limited to YouTube alone. The Creator Economy is comprised of creators who are actively building value across many video platforms -- not just YouTube.
All people uploading content to the video platforms are not created equally, and I have come to realize their primary motivation or purpose to be a creator has clear lines of differentiation. The five categories of creators I have come to recognize are:
Artists and Storytellers
Opinion and Information Leaders
Creators do not fit neatly into any one category: I have worked with many creators who naturally straddle multiple categories. It has been clear to me though, that it is important to understand what type of creator you are working with, where their skills lie, and where they need support and development.
I plan to dig into each of the five categories over the next few issues of the Creator Economy newsletter, starting with Promoters.
Promoters is the category that overlaps the most with an influencer, as defined earlier. In the past decade, as it became clear that there was significant money to be made on YouTube or Instagram, people flocked to these platforms to set up accounts and start posting. The ticket to financial success was a large subscriber or follower count. Grow subscribers, get approached to promote products, and hitch a ride on the money train.
On YouTube, it’s not so easy. I find one cannot survive solely with the motivation to be a promoter. It generally takes six months of consistent uploading of content before the platform starts recognizing and recommending your content or channel to viewers. That is a lot of time and money invested for an eventual payoff. Most people quit. It is far easier to build a social graph on Instagram.
I have yet to meet a creator on YouTube that told me that the reason they got started was to build a following and make sponsored content or bespoke videos for advertising agencies or companies directly. In the past year, I have met several startups that focus on influencers or micro-influencers, and tell me they are targeting people who aspire to be given free products or get paid to fill their Instagram feed with sponsored posts. It’s an image and status badge.
Unlike YouTube where there is a partner program and creators can earn a majority of the ad revenue that is generated by ads that are placed in front of or adjacent to their content, people posting content on Instagram have for years been reliant on securing sponsorships directly to make any income. They can’t just create. They have to promote. They have to influence their followers.
The rise of the term influencer correlates with the rise of Instagram as both a social platform, and as a vehicle for marketers to reach their target consumer. The application of the term to the YouTube platform has in my view undermined creators and the full value they offer.
Acting as a promoter, or an influencer, most likely comes into play when the objective is to secure and execute a marketing brief. Marketers and agencies used to price a deal with a YouTube creator based on the creator’s subscriber count. Today, it is most often based on a cost per view (CPV) metric.
CPV though is just a media metric. It is a way to measure active reach, versus the subscriber count measuring potential reach. CPV generally does not bear into consideration the cost and effort of the creator to produce the content that will feature a sponsor mention or product placement. Therefore the incentive to the creator is to produce content for as little as possible, and maximize their margin on the deal.
Utilizing creators as promoters, as influencers, is effective. I have personally worked on campaigns in the past where content produced by a creator on YouTube has generated a 10%+ lift in brand consideration, or generated a marked increase in brand awareness and brand recall.
I became aware of the company Honey, and tried it out due to a code promoted by a YouTube creator. In 2019, Honey sponsored over 250 videos on YouTube, and this content generated over 500 million views for the brand. Last week, PayPal closed its $4 billion acquisition of Honey. Honey’s 17 million monthly active users, which are mostly millennial shoppers, were very attractive to PayPal. I wonder how effective the YouTube creator marketing channel was to Honey and its eventual sale.
Last August, the Finnish-based mobile game company Seriously, the publisher of the hit game Best Fiends, was acquired for a reported $275 million. The company initially staked a large portion of its marketing budget on placement and mentions in content produced by YouTube creators. It was seen as a badge amongst creators to have been sponsored by Best Fiends. In the last few years, the company has sponsored more than 2,000 creators, who no doubt influenced their viewers to contribute to the 100 million plus downloads of the game.
Honey and Best Fiends are just two examples of companies that have leaned into working with creators and leveraging their promotional, or influence capabilities.
While creators do not set out to be promoters, many become promoters because of a variety of reasons: the desire to transition from part-time to full-time creator, the need to cover higher costs of video production, the lack of direct advertising revenue share from a platform, and the volatility of platform-based advertising when it does exist.
However, there are some creators who choose to forgo paid sponsorship opportunities to focus on growing to the point where they can promote their own products and businesses. I have known some creators who have turned down lucrative sponsorship deals for many years to ensure the first time their viewers hear from them about a product, it is their own.
In the next issue of The Creator Economy, I will take a deeper look at the Entrepreneur category of creators, and what makes them much more than just an ‘influencer’.