Creators Are the Buzziest DTC Business

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There are over 50 million creators in the content creator ecosystem, and according to CB Insights, startups within the creator economy raised a record $1.3 billion in funding during 2021 alone. 

The content creation sector is one of the fastest-growing spaces, and the landscape is continuously evolving. Creators are now monetizing every aspect of their lives—like what they eat, who they hang out with, and the everyday decisions they make. As a result, both brands and social media platforms are scrambling to accommodate the fast-changing realm of influencer marketing

As this space continues to grow, smart creators are leveraging their followings and entering the realm of DTC to find new ways to monetize their efforts and launch businesses of their own.

In this post, we’ll unpack what a creator is, how creators are different from influencers, how both creators and influencers make money, and, finally, how brands can best work with creators. 

Table of contents

What is a creator?

First: What is a creator, exactly?

Creators create content aimed at driving engagement. Think videos, social media posts, podcasts, blog posts, etc. Anyone who produces educational or entertaining content for a specific target audience qualifies as a creator. 

The creator economy includes creators, the platforms they use, and the spaces—like social media, startups, and other third-party platforms—they operate within. 

But is a creator also an influencer? Or is it the other way around? 

Are influencers and creators the same thing?

There’s a fair bit of debate out there around the difference between influencers and creators. Take a look at a few perspectives on the creators versus influencers discussion:

“Creator and influencer are the exact same term. Influencer is just a name that was applied to creators by the marketing industry when brands began doing tons of ad deals in the mid 2010s.” —Taylor Lorenz, The New York Times

“Every Creator is an Influencer. How much weight the influence has is dependent on genre niche audience demographic and how engaged said audience is with the Creator. Separating the Brand from the Person is a much starker difference. Actors possess varying levels of fame. This is the same thing.” —Kevin Herrera, The Machine

“Creator, as it pertains to marketing, is a broader term to describe influencers and any user creating content for your brand. We like this definition because it gives anyone the opportunity to be an online creator by sharing UGC.” —Kyle Wong, Pixlee

“Short Answer: Creator ≠ Influencer. I personally believe creators and influencers are two totally different entities. Creators can be influencers and vice versa, but they are not the same.” =—-Kristen Jones, Suit Shop

There seems to be the main differences between the two terms:

An influencer is someone who creates content with the intent to influence—whether that’s encouraging people to follow a brand, to purchase their products, or to generate affiliate sales.

Example: Maddie Elaine is an influencer who talks to her audience about skin care and makeup products. As a result of the trust she’s built with her following, she influences their purchasing decisions. As an influencer, she engages in paid partnerships and drives affiliate revenue when her audience members buy through her links with back-end conversion tracking.

A creator, in contrast, is someone whose main goal is to create and not influence (although they might be able to do that, too). 

Example: Natalia Seth is a creator with a surreal Instagram feed showcasing her photography and editing skills. Natalia’s audience may not follow her for product reviews or testimonials, or look to her for recommendations, but brands can still collaborate with her by tapping into her creative genius to create a unique, stylized campaign.

Over time, the creator term has expanded widely—from platform-specific creators (like TikTok creators) to niche-specific creators (like gaming content creators). 

The term creator started rising in popularity when YouTube used it as a title for someone who’s amassed a large following on the platform. These creators were loosely referred to as “YouTube stars,” but in 2011, the new term “creator” stuck. 

As YouTube creators started to grow their audiences, Instagram-native stars followed. From 2014 to 2016, these people were called “Instagrammers” or “Instagram stars.” It was in 2017 that the term “influencer” started to take hold. According to New York Times writer Taylor Lorenz, a hierarchy developed from here: 

Influencers, because they came later, were stereotyped as less worthy than traditional YouTube creators, a class of people who had already spent years establishing themselves and whose existence and worth had been validated by YouTube itself, a much larger social network than Instagram, Twitter, or Pinterest.”

—Taylor Lorenz, writer for The New York Times

This might be why the term influencer can sometimes spark negative associations—it brings up the image of an authoritative individual who can dictate the purchasing decision of his or her audience. 

Emily Clare, a fashion content creator, speaks of the judgment around the title of influencer: "A lot of people have a judgment toward the term ‘influencer’ without even knowing someone personally. An influencer might be the most humble person you might meet, but because they get paid to market a brand online, they are judged heavily.”

Other influencers like Justin Laboni, a blogger turned musician, echo the same sentiment: “I’m not here to influence. Just saying the word makes me feel dirty. I can’t influence you to wear a certain clothing brand or cut your hair—nor do I want to. I want to inspire.”

Even Jack Conte—the co-founder and CEO of Patreon—said he hates using these two terms interchangeably, because “it commoditizes creators.”

Influencer vs. creator: What’s the difference?

There are a few things that both creators and influencers do, but there are a few primary differences that set the two apart. 

How influencers and creators are similar

Both influencers and creators create content, but they do it for different purposes. Influencers create content for the sake of influencing, while creators create content to provide value or to showcase their expertise. 

Both influencers and creators can partner with brands, but they often produce different results.

For example, if your brand is planning to start a new product or service, you can hire creators to write product or service descriptions, create engaging infographics, and develop social media posts around it. But if you want to spread the word or generate conversions, you’ll likely work with an influencer who would do things like use your product and share a review with their audiences.

How influencers and creators are different

An influencer’s primary goal is to influence and engage with their audience. Influencers can nudge their audience to engage with a brand, give them a shoutout, or even make a purchasing decision. The content creator’s main goal is to deliver high-quality content. 

In general, a content creator is evaluated on expertise and quality of deliverables, while an influencer is assessed by their engagement numbers. 

Creators looking to monetize the connection with their audience will succeed when they focus on valuable content first and brand promotion second. I want to support creators who share authentic creations. I don’t want to support creators just for the sake of making them money.” 

—Matt Schlicht, CEO Octane.ai

Why do creators also need to be influencers? 

To run a highly profitable creator business, one has to build a following. 

As the creator economy inflates—now with more than 46.7 million amateur creators—audience size matters more than ever. Larger followings mean more opportunities for partnerships and money-generating collaborations. 

Even if creators aren’t striving to drive immediate conversions, one thing remains true: Attention equals currency. As Kyle Chayka sums up in his piece in The New Yorker: “To be a creator, you still have to be an influencer after all.”

How do creators make money?

Believe it or not, the future valuation of the creator economy is in the trillions of dollars. Let’s look at a few ways creators are tapping into this market to make money.

1. Brand deals 

Seventy-seven percent of creators still depend on brand deals for their primary income—that’s three times more than the combined income generated through other revenue sources, like affiliate links, courses, and ad share revenue. 

Among social channels, 72% of creators use Instagram as their primary content channel, while 13% favor TikTok, and 9% lean toward YouTube. 

Instagram likely leads because of its massive user base and variety of features: 

  • Stories allow for engagement
  • A curated feed creates a unified aesthetic experience
  • Instagram shopping allows creators to sell their products directly
  • IGTV (long-form videos on Instagram) lets audiences get to know the creator better

However, TikTok and YouTube are slowly catching up: TikTok released vertical-feed stories similar to Instagram, and YouTube launched Shorts—similar to short-form TikTok videos and Instagram Reels. 

This is good news for brands, as creators can help create high-quality user-generated content (UGC) across these channels that convert audiences into prospective buyers.

"User-generated content videos from creators attract visitors to explore products and drive clicks to buy products instantly. Brands can generate extra revenue with their current UGC videos from TikTok, Instagram, or YouTube by using interactive shoppable videos that convert shoppers in the moment. Our reports indicate that shoppers purchase more after watching video UGC at a conversion rate of up to 20%, and they spend on average five times more time on pages that feature video UGC. Creator video UGC is a whole new level of social proof that builds trust and answers product questions fast.”

—Claudiu Cioba, CEO at VideoWise

2. Ad share revenue

Another way creators generate revenue is through ad share revenue, which is the distribution of total income generated from the sale of goods and services among contributors. This is often a set percentage that’s agreed upon by both parties pre-launch. Between 2020 to 2021, there was an 8.5% increase in creators who preferred to have ad revenue as their highest source of income. 

Example: Instagram now makes it possible for creators to show ads within their IGTV videos and to get a portion of the revenue generated.

3. Non-fungible tokens (NFTs) 

Non-fungible tokens—pieces of digital art and media that live online—have created plenty of buzz lately … and creators are taking note. While NFT buyers don’t own anything in the physical sense, they do own the item digitally. Creators have copyright and reproduction rights to their NFTs—they just sell the ownership of their work. NFTs provide creators with a way to sell their work that otherwise may not have a market. 

NFTs also have a feature that pays the creator a percentage every time the NFT is further sold to someone else—making sure that if the work gets even more popular after being sold, the creator still gets part of that profit.

For example: Chicago-based artist and creator Kane sells NFTs of his work as his main source of income and has made over $131,000 in 2021 alone. 

4. Establishing a business

Some creators are now inviting their audiences to invest in them directly by launching direct-to-consumer (DTC) businesses of their own. For some creators, becoming an established DTC business is the next logical step in their evolution. 

For example: Jeffree Star, the beauty YouTuber, started his own skin care line, and latte-loving vlogger Emma Chamberlain did the same with her own coffee business

Platforms like Pietra, a business launchpad, connect influencers and creators with designers and manufacturers who can help them create their product lines. YouTuber Haily Sani used them to develop her product line, ILYBaby

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But it’s not just the production and manufacturing that creators need help with—there’s the financial aspect to consider, too. That’s where companies like Creative Juice have come in to help YouTube creators with financing via minority stakes and mentorships. 

Next, let’s get to the money talk.

How much money do creators make?

According to an Influencer Marketing Hub survey, about 34% of creators earn less than $20,000 per year. 

  • 23% earn between $20,000 and $50,000
  • 20% earn between $50,000 and $100,000
  • 21% earn between $100,000 and $500,000

Only 0.53% (less than 1%!) earn over $1 million annually. 

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Creators’ income amounts vary across industries, audience size, and content types. 

Hashtagpaid reports that the fashion industry often sees volatility in influencer rates because of the abundance of existing and emerging influencers. But the same isn’t true for all verticals. The auto industry, for example, may instead face the challenge of producing high-quality content and finding relevant partners. 

Over at Patreon, the top 15 creators reportedly made around $200,000 in 2020. The top 1,000 Patreon creators earned roughly $9,000 per month. Similarly Gumroad’s report shows 179 creators made at least $100,000, and 20,591 made just above $100.

The past two years saw rapid growth within the creator economy. While ad revenue for creators declined by 33% during COVID, a Facebook report found the number of content creators earning the equivalent of $10,000 per month grew 88% between 2019 and 2020, and content creators earning $1,000 per month grew by an incredible 94%. 

A harsh reality: Income disparities in the creator economy

The best and the worst things about the creator economy is the low bar to entry. You don’t need a college degree or certification. Anyone with a smartphone and good taste can enter this ecosystem.

And that’s exactly what many have done. More than two million professionals now exist in the space. But the reality is: not all can achieve scale. 

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For musical creators, this is especially tough. On Spotify, artists need 3.5 million streams per year just to achieve the annual earnings for a full-time minimum-wage worker of $15,080. The top 1.4% of artists on Spotify pull in 90% of royalties, and the rest of the platform’s three million creators (98.6%) made just $36 per artist per quarter.

Even on YouTube, one million views translate to a wide range of earnings—anywhere between $3,400 and $40,000. It comes as no surprise, then, that 96.5% of YouTubers only make somewhere between $0 to $12,140—shockingly close to the United States poverty line of $12,490. This means creatorship is often a great side gig or hobby, but not a sustainable full-time career.

Social media platforms aren’t all that transparent about their community guidelines and algorithms either. 

For example: TikTok creators started suspecting a drop in their views after joining the platform’s new program, Creator Fund. Kate Symons, a TikTok creator, says she won’t see her first payment from the Creator Fund until 2022 at its current average rate. Other creators like Tiana E. opted to leave the Creator Fund completely. “I’d much rather my followers see my videos than make a few cents on views,” she said.

This income disparity can significantly impact how the creator economy operates and how it affects a creator’s mental well-being. The top YouTubers are facing a burnout crisis while struggling to keep up with the algorithm and 47% of influencers admit that their career choice has had a negative impact on their mental health. 

The solution? Some experts like Li Jin suggest it’s building a creator middle class. 

What is the “creator middle class,” and can it exist?

Having a middle class for creators helps prevent wealth from becoming concentrated at the top. 

Creators belonging to the “creator middle class” might not be household names, but they do have solid bases of fans that can provide a livable income. These creators will likely focus on building an audience-first business and then monetize their followers at much smaller sizes. 

Members of the creator middle class will likely be freelancers, consultants, coaches, etc., who use their expertise within a specific niche to educate and sell via digital products, services, or online courses. While they may not have millions of followers, their close-knit audiences can support these creators by buying their premium offerings.

Here are a few ways the “creator middle class” can be built: 

1. New approaches to social media algorithms

Creators who have already amassed a following get more organic reach and, thus, continue to stay at the top. Social media platforms can work for bringing more randomness into the algorithm and occasionally recommend content from smaller, lesser-known creators. So far, TikTok seems to be the one social platform doing this well.

2. Emphasizing community over competition

Right now, many social platforms view creators as competitors against one another. But there’s a lot to be said for collaboration: it’s a chance to reach new audiences and build peer relationships genuinely. Finding new ways to partner and team up can help creators reach new audiences in a win-win context.

3. Allowing creators to monetize in new ways

Writer Li Jin hypothesized that creators today can earn a profitable living by having just 100 true fans

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New monetization offerings allow for direct fan donations and subscriptions that let creators monetize their followings. Smaller creators also need their superfans more than the bigger, more established ones, because creators above eight million followers are far less likely to interact with their superfans.

4. Supporting universal creative income

Thirty-five percent of people say their main barrier to self-employment is worrying about inconsistent income. Universal basic income (UBI) is a conceptual governmental program where all citizens are paid a fixed income without a work requirement. 

A similar idea is that of a universal creative income—providing creators with a basic income so they can spend more time creating rather than worrying about meeting basic needs. Platform-sponsored income for creators is one step toward a more worker-friendly environment. 

How can brands best work with creators? And should they?

Next, let’s look at a few best practices for working with creators.

1. Form long-term partnerships

The days of one-off partnerships are long gone, because consumers stopped seeing those as genuine. 

A whopping 92% of marketers believe most or all of the content they create resonates as authentic with consumers, but 51% of consumers say less than half of brands create content that resonates as authentic. 

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Long-term partnerships increase trust in your brand and also lighten your workload. Because once a creator adapts to your voice, you can reap their benefits for a longer time—enabling you to build profitable programs without sacrificing revenue

2. Give the creator you partner with total creative freedom

Creators know best what resonates with their audience. Giving freedom isn’t about handing over control—you can still ask for scripts in advance and request changes. However, remember to let them do what they’re best at.

"Once you’ve selected a creator who connects with your audience, it can be tempting to want to be involved in every step of content creation, but limiting a creator’s creative liberty is a misstep. These individuals have spent a long time cultivating and then nurturing a following.

Unlike influencers, who aren’t necessarily invested in your brand, creators tend to be more authentic and have a niche audience that’s already aligned with your company’s values. Think of content creators as an extension of your brand and your team; you’re getting bespoke, whitelisted content.”

-Hannah Cameron, Content Lead at Hashtagpaid

3. Vet creators ahead of signing with them

Don’t just evaluate creators based on their niche and following. Instead, check the quality of their deliverables, their non-compete clauses, and whether their tone fits with your brand voice. Apps like Refersion and Impact can match you with the right people. 

4. Be open to change

In one study, 61% of YouTube subscribers say a creator has influenced their views of a brand. Six in 10 would even follow the advice of a fellow creator over a favorite TV/movie personality on what to buy.

In 2019, most of the influencer content was aspirational content. But with the COVID-19 virus, content creators have adapted their messaging strategy for the current environment. Take Madeleine Shaw’s partnership with Boots as an example—she talked about ways of adapting to new schedules in the pandemic in partnership with the brand. 

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The bottom line: Stay flexible, and always read the room. 

Creators are the buzziest DTC businesses 

We’re on the cusp of a paradigm shift. Being a creator is one of the most desired jobs right now and, when done right, offers a path to a profitable DTC business. 

Being a creator today requires thinking analytically: building multiple revenue streams, keeping up with the changes, and evolving with marketing channels to drive income. For brands, partnering with creators means reaching new audiences and building lasting, profitable partnerships that are mutually beneficial. 

It’s win-win all around.

About the author

Kaleigh Moore

Kaleigh Moore is a freelance writer who helps SaaS and e-commerce companies create intelligent, value-packed blog content. In her free time, she shares her insights on freelancing and writing at www.KaleighMoore.com.