As per a Goldman Sachs Report, the Creator Economy could reach half a trillion dollars by 2027.

As of 2023, the Total Addressable Market (TAM) of the Creator Economy is worth $250 billion, with 303 million creators present in the Creator Economy already.

(Note: A report by Adobe states that there are 303 million creators in nine markets comprising the United States, Australia, United Kingdom, Japan, Germany, France, Spain, South Korea and Brazil. You can only imagine how this number extrapolates to the entire world!)

The Goldman Sachs Report goes on to say:

The analysts expect spending on influencer marketing and platform payouts fuelled by the monetisation of short-form video platforms via advertising to be the primary growth drivers of the Creator Economy.

Global marketer and bestselling author Gary Vaynerchuk puts it this way:

If you are not crushing it and focusing on the content that you put out on the most important social platforms, you’re going to become mute and obsolete in the modern day of doing business.

That’s why organic reach (through a creator or an influencer) is so important because the impression you get when someone comes directly to your page is a much more qualified lead and potentially a more valuable customer than someone you got through an ad buy.

The how of creator and influencer marketing

I know what you are thinking. Facts are good. What would be helpful to you is to understand how it happens.

Let’s take a deep dive:

The fundamental rule of marketing states that every customer, before becoming a customer, needs to be aware of the product and made familiar with it at least seven times before they become a customer.

We will understand this further by the Attention Interest Desire Action (AIDA) model and the 95:5 rule, and what they mean for creators, collaborators and customers.

In 1898, E St Elmo Lewis developed something called the purchase funnel, which describes the customer’s journey from the time they are made aware of the product till the time they eventually make a purchase.

The purchase funnel10 is very valid in modern day marketing as well, and is often referred to as the AIDA model, which stands for:

A: Attention or Awareness I: Interest

D: Desire A: Action

A customer needs to go from capturing attention, sparking interest and invoking desire to have the product in their journey, that will finally lead them to taking action or making a purchase decision.

As per the 95:5 Rule, Professor John Dawes of Ehrenberg- Bass Institute argues that at any point of time only 5 per cent of buyers in the market are ready to buy in the market, while 95 per cent will either buy it later or still need to be convinced over a period of time.

Combine both these models, and here is what it means for the Creator Economy.

Every collaborator (brand) needs to leverage the power of creators, to take care of infusing attention, interest and desire in their 95 per cent customers and new prospects, so that the influencers can provoke “action” from the 5 per cent.

It is also important that collaborators leverage both creators and influencers, and not only influencers. Like we spoke before, creators and influencers are merely the same person living in the same house, just walking across different rooms (from influencer to creator or creator to influencer), based on what the situation demands.

As per a study by Harvard Business Review:

“It may be tempting to turn to influencers when promoting a new product launch…(however the) ROI for influencer posts announcing new products was 30.5 per cent lower than for equivalent posts that were not about new product launches… While short-term ROI can guide short-term decisions, brands should also consider the potential long-term effects of associating with a particular influencer (read: creator). These effects (whether positive or negative) may take time to materialize but can have a substantial impact on a brand’s identity.”

The best part is that there’s no friction between any of these. A creator can effortlessly choose to become an influencer. An influencer can choose to be a creator. It is fluid. A brand can choose to work with the same person, in a different capacity, either as a creator or an influencer.

Everyone works together to serve the consumer, which is how the Creator Economy functions at its best – keeping all its moving parts together, where everyone wins.

Key takeaways:

  • The Creator Economy is going to be worth half a trillion dollars by 2027.

  • The Attention, Interest, Desire, Action (AIDA) purchase funnel describes the customer’s journey from the time they are aware of the product till the time they eventually make a purchase. A customer needs to go from capturing attention, sparking interest, invoking desire to have the product in their journey, that will finally lead them to taking action.

  • As per the 95:5 Rule, at any point in time, only 5 per cent of buyers in the market are ready to buy in the market, while 95 per cent will either buy it later, or still need to be convinced over a period of time.

  • Combining both these models, every collaborator (brand) needs to leverage the power of creators to take care of infusing attention, interest and desire in their 95 per cent customers and new prospects, so that the influencers can provoke “action” from the 5 per cent.

  • The best part is: A brand can choose to work with the same person in a different capacity, either as a creator or an influencer.

Excerpted with permission from Pixels to Profits: A Systematic Deep Dive Into the Creator Economy, Ankur Mehra, Penguin Business.