Social media platforms have the power to drive creator lifetime value

Competition for content creators is intensifying

The social platform content creator ecosystem is growing exponentially, as the global appeal of social media influencers, the emergence of micro-creators, and social commerce trends bolster demand for user-generated content.

• More than 50 million people globally consider themselves content creators.¹
• Forty-one percent of US consumers spend more time watching user-generated video content online than they do watching TV shows and movies on streaming video services.²
• Micro-creators, individuals with 5,000 to 20,000 followers, bring high levels of creativity and a unique aesthetic to content their niche audience is passionate about.³ Due to their high engagement and conversion rates, lower costs, and authenticity, micro-creators are becoming essential partners for brands.⁴
• In the United States, one-third (and more than half of Gen Zs and millennials) say content creators influence their buying decisions.⁵
   

Why act now?

Creator loyalty will be the engine that drives higher growth and adoption and differentiates platforms from their competitors. Creators and their content help social platforms increase site traffic, strengthen consumer engagement and conversion, and drive advertising revenue. Therefore, social platforms are laser-focused on attracting new creators, boosting creator marketing, and optimizing creator lifetime value—how much value the creator generates for the platform over the course of the relationship.

Creators, in turn, are seeking the right platforms to grow and monetize through brand collaborations (affiliate marketing, sponsored posts) and follower contributions (subscriptions, merchandise, direct user payments, non-fungible tokens [NFTs]). And they are ambitious about their revenue potential: 75% of creators believe that they can make more than $50,000 annually within the next year (although 58% make less than $50,000 annually).⁶ The average creator currently uses three platforms to generate income.⁷ Most disproportionately rely on brand sponsorships, but 83% would like multiple revenue streams, to include brands, platforms, and followers.⁸

Given creators’ lofty ambitions and a rise in platform switching due to technology, service, and relationship pain points, competition to attract and retain content creators is heating up.⁹ This trend is creating an urgent need for platforms to improve creator loyalty—to provide increased, individualized creator support; build in tools or features that can help creators expand their business; improve content analytics and tracking to give creators strategic and operational direction; and monitor/react to creator engagement with the platform.

Meanwhile, brands are under pressure to determine where their products should be sold and which creators they should partner with to drive effective campaigns, increasing the importance of effective, strategic creator-matching. Also, with each campaign targeted at driving specific business outcomes, brands need access to campaign-specific key performance indicators (KPIs) to measure the success of both the creators and platforms on delivering against those outcomes. Platforms not only play an important role in helping brands effectively identify the right creators; they also help brands measure and articulate the value creators are delivering.

Creators’ behaviors and needs shift as they grow

As a content creator grows and evolves, their behaviors, motivations, partnerships, and monetization opportunities evolve with them—as does the support they need to stay engaged in the platform and profitable. Creators are the new “small business” of America. However, the new business landscape in which they operate is digital-first, larger in scale, and much more complex than ever before. Platforms that support creators’ efforts to achieve their ambitions will help strengthen creator trust and differentiate them from competitors.

It takes a village (aka a platform’s technology, partnership management, marketing, and sales functions) to ensure that both the platform and its content creators are successful. For example, creators find many aspects of brand management (e.g., negotiating contracts, securing and maintaining brand sponsorships, receiving timely payments) difficult, and micro-creators have an even tougher time. In addition, technology issues—siloed data, redundant systems and processes, fragmented reporting, high-touch creator support, lack of scalability and agility, and highly manual processes, to name just a few—present hurdles to maximizing creator lifetime value. To accomplish their growth goals, creators need:

• A holistic view of data across functions
• Ongoing visibility into performance and revenue analytics
• Back-end, cross-functional process automation
• Self-service tools
• Personalized support and seamless creator-platform experiences
• Increased creator monetization

Social platforms can increase creator loyalty and grow creator lifetime value

Social platforms have an opportunity to lead and accelerate the creator economy by meeting creators’ evolving needs and focusing on opportunities to increase creator monetization, creator platform engagement, and ultimately loyalty. To do this, platforms require a strategic process and robust technology to support creators across their entire life cycle; to help them find a voice and grow their audience.

Social platforms that treat creators as business partners—for example, facilitating brand partnerships, enabling campaign-trend matching, monitoring KPIs, developing audience insights, providing artificial intelligence (AI)-enabled support and educational resources—can help creators bridge from their current-state challenges to their future-state vision. A solution architecture centered on creator lifetime value can help drive engagement, acquisition, retention, and increased lifetime value by leveraging real-time data and modeling and providing personalized creator engagement and seamless cross-channel engagement management. Furthermore, any solution architecture should be oriented around an organization’s own definition of value. The identification of the right set of KPIs to measure that value is also critical to relaying the value delivered to brands and understanding return on investment.

Seize the opportunity to maximize creator lifetime value

The creator economy is a $100 billion opportunity.¹⁰ Given creators’ importance to social platforms—helping increase site traffic, strengthening consumer engagement, and driving advertising revenue—it’s imperative that platforms step up their creator support efforts. Developing resonant value propositions can help increase creator loyalty to unlock the next level of growth and maximize creator lifetime value to the platform.

Endnotes

¹ Werner Geyser, “The state of influencer marketing 2022: Benchmark report,” Influencer Marketing Hub, February 7, 2023.
² Amy Gilbert, “Micro-creators are ready for their close-up, and brand marketers are noticing,” Social Media Monthly, December 21, 2021.
³ Ibid.
⁴ BENlabs, “What does a successful micro-creator strategy look like?,” December 15, 2022.
⁵ Kevin Westcott et al., “2022 Digital media trends, 16th edition: Toward the metaverse,” Deloitte Insights, March 28, 2022.
⁶ Deloitte, “The creator economy,” accessed March 15, 2023.
⁷ Ibid.
⁸ Ibid.
⁹ Brian Adam, “Why many influencers are leaving Instagram,” Voonze.com, February 9, 2022; Mike Donoghue, “Creators are seeking alternatives as big platforms vie for talent,” Fortune, February 7, 2022.
¹⁰ Andy Karuza, “Make the most of the creator economy,” Forbes, July 18, 2022.

Get in touch

Dennis Ortiz Principal Deloitte Consulting LLP deortiz@deloitte.com +1 212 313 2955	Noor Chawla Principal Deloitte Consulting LLP nochawla@deloitte.com +1 206 716 6818	Kris Tzankov Managing Director Deloitte Consulting LLP tzankov@deloitte.com + 1 404 631 2813	Marisa Bloom Senior Manager Deloitte Consulting LLP mabloom@deloitte.com +1 312 486 2441	Jimmy Zheng Senior Manager Deloitte Consulting LLP jimzheng@deloitte.com +1 571 218 8563