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Marcus Johnson (00:00):

In today's economy, every ad dollar counts. That's why performance marketers are turning to Rockt ads to reach 1.1 billion unique customers globally in the transaction moment. When they're completing a purchase online, you only pay when customers engage. Learn more at rockt.com/emarketer. That's rockt.com/emarketer. Hey gang, it's Friday, March 20th. Max, Minda, and listeners. Welcome to Behind the Numbers, an EMARKETER podcast made possible by Rockt. I'm Marcus, and joining me for today's conversation, we have two of our social media experts. We start by introducing our principal analyst calling Philly Home. It's Max Willens.

Max Willens (00:43):

Yo.

Marcus Johnson (00:44):

And we're also joined by senior analyst living in New York, Minda Smiley.

Minda Smiley (00:48):

Hello.

Marcus Johnson (00:49):

All right, folks. Today's fact. When Harvard University was founded in 1636, Calculus didn't exist as a subject yet because Mr. Isaac Newton and Mr. Gottfried Wilhelm Liebner hadn't invented it yet. I wish I was at Harvard then. I wasn't at Harvard at any point, but if I had to be at Harvard, I wish it was before calculus existed. I bet students were livid when they come back, they're like, "Oh, this year it's going to be so easy." And then Harvard's like, "We're doing calculus." And like, "What? Oh God, why did they have to invent this?" It's probably a good thing. Anyway, today's real topic. Creator marketing gets more competitive, complicated, and confusing. All right, so we're talking about creator marketing influencer people today. Max, let's start here. How much money are creators making these days?

Max Willens (01:57):

Well, I'm glad you asked, Marcus. I should say this report, which we're going to be chatting about today, is built largely on a forecast that we do once a year that looks specifically at what we describe as social media creators. And by our estimation, those folks will pull in over $21 billion in revenues this year. A lot of that, most of that money, I should say, comes from two sources. It comes from the sponsored content that we think of when we think of influencers and creators. A second large pot comes directly from platforms themselves in the form of payouts. But this is a creative class of people that's now making money from lots of different sources. So I spend a little bit of time in the report talking about how what I call fringe revenue sources that could include things like affiliate marketing payments or subscriptions to their direct content or services or tips.

(03:03):

Those revenue streams are growing really, really fast. So we think that pot of money is going to grow by over 30% over the next two years. So $21 billion is the headline number. One thing that I think is so interesting about writing about this space is that it's really, really hard to come up with a tidy comparison for that number. When you're talking about media and advertising, it's really, really useful to anchor a number. When you're routinely talking about billions and millions or even trillions, you can quickly start to go like, "Well, what are we even talking about? " And that creator number, like I said, doesn't really have a tidy comparison. You can't really compare that number to the amount of money that just gets spent on advertising on social media, for example. That doesn't really make any sense. It doesn't really make sense to compare it to money spent advertising on video or any other particular channel.

(04:04):

The closest thing I came up with, and I've referenced this in presentations I've given, is the amount of money that goes to web publishers, which is something that we track in our programmatic forecast. But even that feels incomplete. But yeah, that's one thing that I think is so interesting about this space.

Marcus Johnson (04:22):

So Max, as you mentioned, sponsored content is about 12 billion of the over 20, 21 total. Then you've got, that's the biggest piece. Then you've got five billion for platform payout. So sponsored content, 12, platform payout, 5. And then you've got a bunch of, as you call them, these fringe revenue streams. Of those, which one do you find most interesting?

Max Willens (04:49):

Well, I think that affiliate is probably the best and most obvious answer. So one of the things that's really important to understand about the way that the creator economy has evolved is that it grew out of this thing that originally lived in maybe the brand or PR side of an organization, where people were thinking about influencers as an easy way to generate awareness or reach or earned media value was a good legacy metric for creator and influencer marketing overall. But over time, organizations started realizing that because of the trust and credibility that so many influencers and creators had with their audiences, that that would make affiliate, or rather would make creators pretty good affiliate partners, right? Where they would say, I do a post that talks about how much they love a eyeliner or a workout gear.

(05:52):

And then just being able to say, "And because I love you guys so much, I got a special code that's 20% off, you can find it in my bio or whatever." And that has proven to be quite effective across lots of different industries. And so what we've seen is that creators have really gone from this kind of object of curiosity to being this central area of focus within the affiliate marketing ecosystem, which has been really good for creators, obviously. It's been good for the affiliate industry because it's raised its profile. But it's also made this industry a lot more complicated, as I said, where instead of once upon a time just using creators, maybe you try to find one or two really famous people on Instagram to talk about your brand or your products, and you measure how many likes and retweets and maybe website visits you get out of it.

(06:43):

Now all of a sudden, really sophisticated brands are thinking about creators as sources of raw material for media investments. They're thinking about them as spokespeople. They're thinking about them as things that can drive sales or incremental foot traffic. And that's obviously really exciting, but measuring and managing and coordinating all of that stuff is quite challenging in a way that most brands are still wrestling with because this is, again, still a rapidly emerging, but still quite nascent area of media and advertising.

Marcus Johnson (07:22):

Minda, Max had this good quote in this piece. Advertisers once focused their efforts on partnerships with influencers who boasted big follower accounts. But today, as you point out in the research, influencers with fewer than 20,000 followers accounted for nearly half, 46%, of the over $12 billion spent on influencer marketing in 2026. Five years ago, that share was 19%. So from 19 to 46% over those years in terms of the amount of money going to influencers, creators with less than 20,000 followers each. Minda, what's your take on what changed here?

Minda Smiley (07:58):

Yeah, I think there are a few factors that are really driving this. I think the first and the biggest, the one that gets talked about the most is this idea that we're in this post follower era. That's a term that's been being thrown around. And I think it's largely because of the social platforms algorithms. And the fact that on reels, on TikTok, on these major social platforms, on YouTube Shorts even, the algorithms are able to just surface content that's really relevant to you and your interests in a way that just wasn't happening five, six years ago. And so I feel like I'm always using examples from my own life on this podcast, but I'm a toddler mom. And I feel like it's incredible how even within toddler mom, I'll see videos of like, "I'm a mom of a 22-month-old." And it's like, "Oh, I am too."

(08:45):

They're able to really figure out exactly what stage of parenthood you're in. And then that doesn't even account for geography. Are you a New York City toddler mom? So you can see how niche you can get. And so that's definitely part of it. And I think the other part too is just the fact that as the creator economy has matured and gotten more sophisticated, it just has opened up more opportunities for creators to get more niche themselves. It's not just so much a few big names or just beauty or whatever was popular even a few years ago, now you can build an entire profile around a more niche hobby or the city you live in, whatever it might be. And you can gain a pretty engaged following that way. Again, it'll be small, but ideally it'll be a more engaged and more tuned in audience.

(09:35):

And so those two trends are related, but I do think they also are distinct as well. Max, I'm curious if you agree on that general take as well.

Max Willens (09:46):

Yeah, no, 100%. I think that to your point about the proliferation of niche creators, they've proliferated because it's possible to build a sustainable career or living even with a modest following. One of the things, the stats in that report, which I wish I could say we built it ourselves, but I got it from reading through IAB research, is that the number of people in the US that make even just like the average household income from working as a creator has 7Xed over the last five years. It's now over a million people, or rather over one and a half million people. And just a few years ago it was under 200,000. And so the reason that that's happening is not because there are one and a half million people like Kim Kardashian or Charlie D'Milio who have hundreds of millions of followers on TikTok.

(10:41):

It's grown like that, because there are instead tens or hundreds of thousands of people who are really, really homing in on a specific audience, a specific topic, a specific community. And just really laser focused serving those people and engaging and entertaining them. And in so doing, making a living for themselves. And so the other thing too I would add is that it's also become a lot more possible technologically to find those people. In the 1.0 version of this, you would maybe just find some leaderboard of the people that had the biggest followings on Instagram or TikTok or YouTube and go, "All right, let me get in touch with our business managers." But now you can use all manner of software, whether it's operated by the social networks, by affiliate marketing networks, or even generative AI. Generative AI has a very complicated role that it plays in creator marketing.

(11:39):

But one thing that everyone seems to have agreed on is that it's actually really quite good at finding creators that would be good fits for a brand's campaigns, where you can just say, "I need to find a creator who only talks about their life with a 22-month-old toddler living in New York City." And it can, in a matter of seconds, spit up quite a few really viable candidates. And so you add all that together and it's not hard to understand why the dollars have migrated toward this slice of the creator community.

Marcus Johnson (12:17):

You mentioned that number from the IAB, the number of full-time creators increasing nearly sevenfold, or more than sevenfold 2020, 2024. The question I had was, if you were thinking of reasons as to why creator content doesn't break through as easily as it used to, as you pointed out in the research, how much of it is that? How much of it is there's just so many more creators and what else would be in that pie chart of reasons?

Max Willens (12:43):

When I was thinking about this, to me, increased competition is the biggest reason, right? The people making a living don't tell the full story, but it's a good point of comparison. If you go from a competitive pool of 200,000 to a competitive pool of one and a half million, that's going to make it harder to breakthrough. And the second-biggest reason I would say is plateauing time spent with social as a whole, right? Where for years and years and years, one of the things that social platforms could bank on was the fact that it's seemingly every year without fail, the number of people that join their platforms continue to go up and the amount of time that they spent in aggregate on their content would also go up. But if you look at the forecast that we have around time spent with social networks as a whole in the United States and also growth of users joining social platforms, those numbers are both beginning to plateau.

(13:43):

In some cases, they're actually declining depending on the network. But so all of a sudden you've got less incremental space for these ad spots or these just eyeballs to land on this creator content. And you've got many, many, many, many, many more people all vying for those same seconds of a user's time. And those two things are, along with the post follower moment that Minda alluded to, all those things are sort of blending together to make it so that creators, while they remain still quite effective, I want to underline that, this is not like operating a brand page on Facebook in like 2013 where all of a sudden you just get zero organic reach at all. These are still highly engaging, highly attractive sources of content in the eyes of consumers and also social media algorithms. But it's just you're not getting quite as much easy organic reach as you once did.

Marcus Johnson (14:48):

You talked about the focus moving away from creators with huge followings to ones with smaller, more niche communities. And in the piece, you have this quote, "In shifting their creator strategies from reach to engagement, marketers have created a problem with few straightforward solutions." How so?

Max Willens (15:08):

So I think a lot of this is stuff we've talked about already where there's two things that are fueling and reinforcing the difficulty here. One is that as the budgets have migrated toward people with smaller social followings, what that means is that you now have to manage more of those relationships, right? Where if five years ago, maybe you were working with half a dozen creators that you were working with principally because of how much reach they could drive on social. If you then pivot to a situation where instead of working with six creators, you're working with six dozen of them, you still have to hit your numbers, right? You're still going to have to show your boss and your boss's boss that you're reaching the same number of people, but if you're using smaller people, you have to work with more of them to get the same numbers. Now, part of the reason that people do this is because those smaller people are beneficial in lots of other ways. That hyper-specific community that those creators work with is going to find the content maybe more engaging, more resonant.

(16:11):

It's maybe more likely to cause them to take actions like buying your product, like visiting your website, like visiting one of your stores. The content that they produce is maybe better for distributing across social or across other channels, but it just means a lot more work. And to compound all of that still further, there's just a skills or expertise gap that opens up there too, right? Where if maybe you show some initiative and you work in a brand and you go from being someone in your PR department to the head of creators at your brand, the expertise that you might have is in driving reach and driving mentions on social media, but all of a sudden you now have to be an expert in digital media measurement, in affiliate marketing, in e-commerce potentially in measuring and working with your store team to measure visits to your stores.

(17:10):

And that's finding someone who is just fluent in and adept in all those spaces is pretty difficult and pretty unusual.

Minda Smiley (17:20):

I also think it's important to note that, yes, it's more work and it's more work with people and people can be hard to work with. They all have their own agendas, they all have their different ways of working, they all have their own rates and the ways they want to be paid, or maybe ways they don't want to be paid. So yeah, at the end of the day, creators are humans and that is inherently messy. So it is this problem of trying to scale and optimize while dealing with, you're dealing with, of course there's contracts and managers and there's systems in place, but at the end of the day, you are relying on people, not really companies to spread the message or to work with your brand. So I think that can be really tricky as well when you're trying to scale these things.

Max Willens (17:59):

I think that's a really, really important thing for us to call out here too, is that one of the things that makes this such an attractive spending area is that humanness and authenticity. And to what Minda was saying, scaling or building something like that is very, very different from deciding, "Oh, hey, programmatic video works for us, so let's just up the budget by 25% and find more inventory on one or two more channels or spend more money on YouTube." Each time you decide to grow or build something, you need to literally forge a new human relationship with somebody who, based on what we've all been discussing, is probably pretty busy. And so that's naturally and necessarily going to take time and require some effort. So I think it's a really good call out.

Marcus Johnson (18:52):

When we were talking about what to think about what to cover for this episode, Max, you said one of the biggest findings or takes from this research was this take on social amplification spending, surpassing creators sponsored content revenues by 2028. Tell us what's going on there.

Max Willens (19:11):

This to me was something that I thought was just totally fascinating. I think this is the first year that our forecasting team was able to break this out. But basically because of a lot of the stuff we've talked about already, like the declining reach, the change in the way that creator content travels around the internet, the general attractiveness and effectiveness of creator content is raw creative material, brands have now decided to spend a lot more money distributing that content on social networks.

(19:42):

And the instinctive reaction some people have when they see this chart is they think, oh, this is social networks running the same playbook that they ran 10 years ago with brand pages and just choking off all the oxygen and basically forcing brands to pay to reach their audiences. And that's not really what this is. There is maybe a tiny droplet of that in there. But the main thing that I think this is all about is that we live in an era that a lot of media agency people will describe as one where creative is the new targeting, where brands need lots more quality raw material that they can use for their campaigns.

(20:22):

And creator content has proven over and over again to be a really effective source of raw material for that. And so that means maybe you get some really wonderful, charming piece of content from a creator that's a couple minutes long. You can work with your own social team to cut that into 5, 10, 15 different shorter versions, maybe calls to action that you can distribute and use to target specific audiences or to run a fully automated campaign on a social network. And to me, that's just ringing more value out of something that you've already paid for. But the scope and scale of it was something that really surprised me. And so that was why I highlighted it when we were discussing using this as an episode topic.

Marcus Johnson (21:12):

Minda, what are some of the most popular social platforms for influencer marketing today? Has the ranking changed? What does it look like in terms of where most of the influence marketing is taking place?

Minda Smiley (21:26):

Yeah, I think it really is the usual suspects. When we're looking at data on this topic, I find that Instagram and TikTok usually tend to be pretty neck in neck in terms of spend and creator interest. We are seeing, of course, YouTube and YouTube Shorts specifically, we're seeing some more interest there. And I do think TikTok finds itself in a bit of an interesting spot. It's still incredibly popular. It's pretty much synonymous with creators and influencers, but I do think with everything going on, with the ownership change, and just some general TikTok fatigue we're even seeing, I think we're seeing this bigger trend play out where I feel like people are trying to get off social media. To what extent they actually are is a different story. I've talked about this before on past episodes, but I do think considering how much time people do spend on TikTok, I do feel like they also want to pull away from it the most, if that makes sense.

Marcus Johnson (22:21):

Max, one of the things you mentioned in your piece in terms of some of the biggest challenges with this space is measurement. What is the biggest challenge or a couple of the biggest challenges with creator marketing measurement?

Max Willens (22:37):

Yeah, I think there's a bunch of different things that you could point to. I think though that maybe if we're going to confine it to one, the biggest is just to get all of the data that a creator campaign might throw off to get it all to flow to the right people in places. There's a version of this where maybe a certain creator campaign could involve gathering data from a couple different social networks, a video platform, maybe a CTV platform, an affiliate network, possibly a third party measurement firm that you work with to measure footfall traffic or in store visits. And pulling all of that together and tying it not just to the specific creators and to the specific products. But also to user data, especially if you're trying to incorporate that into first party data that you have about your customers, that just becomes a huge headache really, really fast.

(23:47):

And it's the sort of thing also that is especially challenging if you're doing or executing this campaign with multiple agencies assisting you with it. Historically, an agency will just tell you how it went at the end and give you some results. But if you're trying to build a corpus of data around which creators really resonate, what kinds of products they drive really strong sales in, which audiences their content really, really resonates with, that kind of working relationship might not necessarily be adequate. And so I think just generally getting all of the disparate trickles of data to flow into the right place so that you can start making sense of it is one of the biggest ones at the moment.

Marcus Johnson (24:40):

Minda, for you, everything we've talked about, anything else in Max's research, anything else you've seen, what do you think is one of the biggest takeaways for advertisers when it comes to creative marketing at the moment?

Minda Smiley (24:53):

I would say I think the big thing to focus on is even with all of these challenges and roadblocks, I still think it's definitely an area that marketers should continue investing in and continue hammering away at finding ways to make it work. I do think it's still a really powerful channel. And even as we do continue to talk about more of the challenges that come with it, I would say that shouldn't really detract from the fact that it is incredibly impactful in my opinion.

Marcus Johnson (25:17):

That links me back to something that Max said, which I used as the title of the episode at the beginning, which was when I said, Max, what should we talk about? He said creative marketing is getting more competitive, complicated, and confusing, but still impactful, as Minda just outlined. An excellent note to end on. Thank you guys so much for hanging out with me today. Thank you to Max.

Max Willens (25:39):

Always a pleasure, Marcus. Thank you.

Marcus Johnson (25:41):

Yes, indeed. Thank you to Minda.

Minda Smiley (25:45):

Thank you.

Marcus Johnson (25:45):

Of course, of course. And thank you to the production crew, in this case is just Lance. And thanks to everyone for listening in to Behind the Numbers, an EMARKETER podcast made possible by Rockt. We'll be back on Monday looking at social media's role in healthcare decisions. Happiest of weekends.