Snap offers influencers a share of ad revenue for the first time, as competition for creators intensifies
A new chapter for Snapchat ….Snap has had a wild start to the year: its shares plummeted 24% in a single day after Meta’s disastrous earnings earlier this month, before spiking 60% the next day after reporting its first profitable quarter.This week Snap introduced feature that gives creators a slice of ad revenue — something YouTube and Instagram have been doing for years. The deets:
- Snap is dropping ads in the middle of Stories (videos that disappear after 24 hours) and giving creators a cut of the revenue. For now the feature’s available only to verified influencers (Snap calls them “stars ”), but it will soon roll out widely.
- Previously stars could make $$$ by receiving tips from fans, teaming up with brands, or winning prizes from the little ghost.
Cash for content… As new users become harder to find — Meta (fka FB) just saw its first drop in daily users — social platforms are focusing less on growth and more on creators who bring their followings with them. Last year Snap doled out $1M a day to top creators to promote its TikTok competitor, Spotlight. Some creators made $1M in two months (Snap ended that promo but still pays out millions monthly). Other social companies have showered creators with cash:
- TikTok launched a $200M creator fund in 2020. The following year YouTube started a $100M fund and Insta a $1B fund
The Creator Cash Boom is just beginning…Now that creators are seen as crucial to social companies’ success, those companies are racing to build new monetization models to attract them. Beyond generic “creator funds,” Snap, Twitter, TikTok, and Insta aim to help creators sell merch and attract sponsors. In January Insta and TikTok started testing paid subscriptions that let creators charge fans for access to exclusive content. As the $100B+ creator economy grows, we’ll likely see social apps get more creative with creator tools.