A recent study by the World Economic Forum found that around two-thirds of economists anticipate a recession this year. The Federal Reserve has recently raised interest rates, major companies like Amazon(which was founded by Jeff Bezos) have conducted layoffs, and projections suggest that the unemployment rate could reach 4.6% by year-end, which could lead to a decrease in consumer spending. This downturn could impact the creator economy.
Despite the economic downturn, the creator economy appears to be gaining momentum. In 2021, venture capitalists invested an estimated $2 billion into 50 creator-focused startups, according to The Information.
Marketing teams worldwide are investing in influencer marketing, and video content is still king, as TikTok’s projected user growth suggests. Many experts believe the creator economy will be recession-proof, as it is driven by direct financial support from audiences, and creators’ ability to connect with fans, which is typically less affected by economic fluctuations.
There are over 2 million professional creators and more than 46 million amateur creators, according to SignalFire. However, social media influencers nationwide make less than $60,000 per year on average, according to ZipRecruiter data.
Therefore, a downturn in consumer spending could significantly affect their lifestyles. Creators need to find new ways to generate revenue and reduce expenses in the face of an economic downturn. Someone who works with both brands and creators offers four tips for survival this year.
1. Create Content For Other Pages
Content creators are familiar with the necessary evil that is organic social media. However, it is the reason for having an audience, and it is important to keep them engaged with authentic unpaid content. Similarly, brands need consistent content for audience engagement while incorporating paid ads and ROI-driven promotions.
With companies looking to cut costs, they may rely more on organic content. As a content creation expert, this presents an opportunity to reach out to brands and offer to create fun, exciting content for their page at a lower price.
Content creators typically avoid lower posting rates, as they can saturate their profile and lead to lower engagement. However, by creating content for other brands, creators can make as many posts as their schedule allows without negatively impacting their own branding. This presents a true win-win scenario.
Whitelisting is a potent marketing tool for influencers, also referred to as creator licensing. This approach allows a brand to allocate ad spend to your posts, making it appear organic while reaching your audience. This way, the brand is funding your posts.
By pitching this to brands, you can make them aware that this method provides them with the opportunity to retarget your audience, close more sales, and still maintain an authentic look for their ads. This presents a win-win scenario for you because your post is likely to have more engagement than usual, thanks to the brand’s ad spend.
3. Become A Social Media Freelancer
Freelance work is becoming increasingly popular, with a 2022 report from Upwork showing that 60 million Americans, or 39% of the U.S. workforce, have done freelance work in the past year. This is an increase from the previous year, and freelancing has contributed $1.35 trillion to the U.S. economy in 2022, which is a $50 billion growth from the year before. As companies aim to cut costs, they may turn to contract workers to create quality content at a lower cost.
As a content creator, you are in a unique position to leverage your skills for some extra cash. Managing a social media account is a full-time job, and many brands are willing to pay for it. However, in the new era of TikToks and Instagram reels, brands may also be searching for someone to represent their social media. By using your time efficiently, you can take on various roles, from freelancing to ambassadorship, while still having time to grow your social media accounts.
4. Make The Most Of In-Kind Partnerships
Let’s talk about paying bills and rent with actual money, not just the unsightly chair that a brand partner gifted you. However, there is such a thing as a valuable in-kind partnership. When a company approaches you asking for exposure without cash, you must assess whether you would use the payment. For instance, a plane ticket for a journey you were already planning to take is a resounding “yes.”
The savviest creators will learn to leverage in-kind partnerships to cut expenses on a monthly basis. Do you have grocery bills? Try collaborating with a grocery chain. Are you planning to go to the gym? Reach out to one for a partnership. Based on your level of influence, you can approach various businesses, but this approach can be an excellent method to reduce recurring expenses while forming relationships with brands you admire.
Despite recession fears, the creator economy is thriving, with $2 billion invested in 50 startups. While economic downturns may impact creators, strategies like creating content for brands, whitelisting, freelancing, and leveraging in-kind partnerships offer survival tips for 2023.