SOCIAL COMMERCE AND THE CREATOR ECONOMY
Content creators on social media are increasingly becoming empowered as they shift their followings to independent platforms. As livestreaming and other combinations of social entertainment and digital commerce become more popular, brands will have real opportunities in this space if they can find effective ways to work with creators.
Brands will explore new ways to connect with consumers’ online worlds Brands must release control to collaborate with creators Time for brands to adapt for social commerce A step into the metaverse Content and commerce merge on social platforms Investment in social platforms growing rapidly Case study The CMO view Takeaways
Content creators on a variety of digital platforms have gained sizeable fan followings around the world. Their emergence is creating new channels and opportunities for brands to communicate, engage and transact with consumers.
A NEW DYNAMIC
The creator economy is driven by passionate individuals who share their interests with an engaged community, and generate income from their knowledge and skills. While influencers monetise their audiences via sponsored posts and ad revenue, creators are bypassing the major platforms to make an income through tools such as Patreon, Substack, Cameo, TipJar, selling NFTs, and creating their own brands and merchandise. This changes the relationship between brands, media platforms and creators, and is driving innovative partnerships and collaborations.
RISE OF COMMUNITY COMMERCE
Creators’ communities and the concept of fandom are an increasingly important cultural force. The power of the creator economy lies in its ability to cater to every special interest and niche, and community commerce will provide a space where creators and brands can build the high levels of engagement that drive inspiration and purchase.
GAMING LEVELS UP
Brands working with gaming creators and esports are paving the way, with collaborations enabling localisation on a global scale. The pandemic has created huge growth for the gaming industry, with an 80% increase in livestream gaming content, and it is estimated 75% of the net rise in mobile gaming activity will become permanent post-Covid.
SOCIAL PLATFORMS EVOLVE
YouTube, Facebook and Instagram will continue to update their services to keep creators on their platforms and offer tools and revenue shares that creators had been finding elsewhere. Social commerce will become mainstream as 75% of brands in the WARC survey plan to increase spending, leveraging the power of creators to sell via livestreams and shoppable media.
BRANDS WILL EXPLORE NEW WAYS TO CONNECT WITH CONSUMERS’ ONLINE WORLDS
As the creator economy gathers pace over the coming year, there are three critical areas that brands must keep in mind:
KEY STEPIC DRIVERS
CREATIVITY Creators are using new platforms to provide content for a multitude of niche interests to engaged communities, establishing their own products and brands.
SOCIETY Increased time at home over the past two years has helped drive digital behaviours, including consumption of all kinds of content.
TECHNOLOGY New creative capabilities on social platforms are enabling high quality content production and new monetisation tools are allowing creators to generate revenue without relying on brand sponsorship.
BRANDS MUST RELEASE CONTROL TO COLLABORATE WITH CREATORS
Strategist Zoe Scaman highlights that “the new dynamic between brands and creators heralds the arrival of more open and collaborative business models, with brands inviting creators in and giving them a springboard against which they can pursue their own ideas”.
Offering creative freedom may be a scary prospect for some brands but there will be rewards for those that take the leap with authentic creator collaborations. Research by TikTok showed that 88% of users discover new content while on the app and one in two discover new products and brands in the process, with 91% of users taking some sort of action after seeing content. The potential of the rapidly growing video app is reflected by the WARC survey, as more respondents planned to increase spend on TikTok than on any other social platform.
TIME FOR BRANDS TO ADAPT FOR SOCIAL COMMERCE
Social commerce adoption, like e-commerce, has been greatly accelerated by the pandemic. Social platforms are becoming shopping destinations as new technology has made shoppable media a seamless experience, transforming platforms into malls.
The lines between content and commerce blur as livestream commerce, as well as livestream content, will become more widespread outside of China and South-East Asia. Purchase from livestream advertising was pioneered in China, where famous creators include Li Jiaqi who sold $1.6bn worth of products in a 12-hour livestream promoting Singles Day 2021.
A STEP INTO THE METAVERSE
The metaverse was a hot topic in 2021, but despite the hype it’s not quite here yet. A report by Wunderman Thompson offers multiple definitions of the metaverse including a persistent and user-defined virtual space, a digital layer of everyday life and a digital twin of the everyday world. While the metaverse may evade a precise definition, the increasing reliance on technology for everyday life and the fact that people are replicating their routines, interests and obsessions online means the next phase of the internet has already begun.
Gaming is again the trailblazer – it is merging with social media as games become places to socialise and spend time. In 2022, more brands will experiment with involvement in gaming, which is set to become a $300 billion industry by 2025 – there are limitless opportunities as anything in the physical world can be recreated in the virtual world.
CONTENT AND COMMERCE MERGE ON SOCIAL PLATFORMS
The confluence of social media, content, commerce and gaming is an exciting area for 2022. Given the increase in online purchasing since the pandemic began, it’s no surprise that 78% of respondents plan to increase investment in e-commerce in 2022. Respondents are also capitalising on evolving online behaviours with significant increases in investment in social commerce and gaming. Livestreaming is becoming more mainstream with more than two-thirds of respondents increasing spending, and the use of influencers and creators continues to grow. Those surveyed are also preparing for the next phase of the internet, with more than half of respondents looking to increase spending on the metaverse.
INVESTMENT IN SOCIAL PLATFORMS GROWING RAPIDLY
As the creator economy booms, respondents are expecting to invest more in social platforms. TikTok is the big winner with 84% of industry respondents surveyed expecting to increase their investment in the video app. Brands can engage with TikTok users through organic reach and paid advertising, as well as by working with creators.
Almost two-thirds of those surveyed expected investment to increase in YouTube, Instagram and Amazon. The power of diverse creators to drive brand awareness and purchase is also reflected in the 60% increasing investment in Twitch. Only 23% of respondents anticipate increased investment in Twitter; this may change as it develops social commerce tools.
LEXUS: GO ALL IN
AGENCY Team One
MARKET United States
In the US, automotive brand Lexus launched a campaign to promote the new Lexus IS sports sedan.
Lexus wanted to appeal to a new audience by attracting younger and more diverse buyers, as well as by tackling competition from SUVs. Team One undertook in-depth qualitative research to better understand the motivations and culture of their target audience. The brand forged partnerships with passionate content creators focused on sneakers, gaming and music, who reflected the “fiercely authentic” vibe Lexus was looking to tap into. The resulting collaborations included building custom Lexus IS models, with one featuring a playable turntable in the dashboard and another boasting a specially designed gaming PC, promoted live on Twitch. A custom sneaker was designed using the car’s silhouette and materials, and the brand hosted a downhill race between a professional driver and downhill skater.
- The campaign generated the most ever monthly Lexus.com visits and 1.4bn total impressions.
- The car became the second fastest selling in the country (and the only sedan in the top 10).
- Getting to know the audience enabled the brand to show up authentically in places these young consumers go to stoke their passion, and behave in ways luxury car companies typically don't.
- Coverage spanned beyond auto and ad news to culture-forward publications (i.e. Hypebeast). Twitch CEO, Emmett Shear, said "It's a great example of how a brand can participate – and do it at scale – on Twitch".
THE CMO VIEW
"The creator economy, social shopping, and peer-to-peer or influencer shopping is something that is going to boom in the Western world. But we have to be honest about the fact that no one [in the West] has cracked it."
DAVID SANDSTROM CMO, Klarna
"The difference now is that creators have platforms and creative tools that allow them to reach a unique audience of customers in a way that resonates more than traditional marketing would. The industry is starting to recognise that we need to ensure that creators can build thriving businesses as part of the marketing ecosystem."
DOUG FRISBIE VP – Global Business Marketing, Snap Inc.
"The purchase funnel is melding and getting shorter. There are a lot of really interesting opportunities that are emerging in shoppable content, where you can reduce the time from when a consumer experiences your content, or an ad, to when they actually purchase the product. And that’s going to shape a lot of how the industry is going to evolve in the coming years."
ZENA SRIVATSA ARNOLD Chief Digital & Marketing Officer, Kimberly-Clark
IT IS NECESSARY TO UNDERSTAND THE NUANCES BETWEEN INFLUENCERS AND CREATORS TO TAKE ADVANTAGE OF THE GROWING CREATOR ECONOMY
For brands looking to engage in the creator economy, it will be important to focus on an authentic fit with a particular creator, to build or highlight credibility in this space, and to arrange sustainable partnerships that result in long-term value for the brand and creator.
SOCIAL COMMERCE IS WELL-ESTABLISHED IN SOUTH-ASIA AND CHINA, BUT OTHER REGIONS ARE FAST CATCHING UP AS A RESULT OF SHOPPING TRENDS ACCELERATED BY THE PANDEMIC
Social platforms are rapidly evolving their offerings for brands, creators and consumers and so keeping abreast of tech changes in this space is paramount. Community commerce is a growing area enabling brands to be part of the conversation driving purchase.
THE GAMING WORLD IS AT THE FOREFRONT OF TRENDS IN THE CREATOR ECONOMY, VIRTUAL BRAND PRESENCE AND THE EMERGING METAVERSE
Creators are the gatekeepers for brands wanting to engage in gaming, and so building trust with creators and their communities is key. Brand collaborations should be relevant and appropriate so any product integration is natural and unobtrusive – but done well this is a huge opportunity.