According to Goldman Sachs the creator economy market is poised to experience significant growth in the next five years, driven by the surge in digital media consumption and the advent of new technologies. According to the financial institution, the total addressable market for the creator economy, comprising over 50 million independent social media influencers and content creators, could soar to $480 billion by 2027, a substantial increase from its current value of $250 billion.
Goldman Sachs highlights the emergence of platforms like TikTok and the evolution of legacy platforms such as Facebook and YouTube, which have introduced new formats for sharing short-form videos, live streaming channels, and user-generated content.
Influencer marketing, platform payouts, and short-form video advertising are expected to be the driving forces behind the creator economy’s growth. The estimates are that the number of global creators will experience an annual growth rate of 10% to 20% over the next five years.
Social media influencers and creators realm earn revenue through various channels, including branding deals, platform advertising revenue, and direct payments from followers, such as subscriptions and donations. Brand deals constitute around 70% of their revenue, followed by ad sharing and establishing personal brands.
Goldman Sachs suggests that digital platforms offering multiple avenues for content monetization will attract influential creators and a larger portion of spending. The report identifies factors like a diverse user base, access to capital, and robust AI recommendation engines as elements contributing to a “flywheel effect” that fuels growth over time.
In addition, the influencer marketing platform market is projected to reach $143.1 billion by 2030, with an annual growth rate of 33.4%, according to a report by Grand View Research. The demand for over-the-top (OTT) media services and their collaboration with influencers for content advertising and promotion are identified as key drivers of growth in the influencer marketing platform market.
In the context of major social media platforms, Meta, the parent company of Facebook, reported a 55% annual decrease in net profit for the fourth quarter due to rising costs and a decline in the average price per advertisement. However, advertisement impressions delivered across Meta’s family of apps increased by 23% annually in the first quarter of this year, while the average price per advertisement dropped by 22% annually.
Meanwhile, Twitter has made significant progress, with most advertisers returning and the company expecting to achieve cash-flow positivity in the upcoming quarters, according to Elon Musk. However, it is yet to see how the launch of Threads will be impacting those revenue streams of the platform.
On the other hand, TikTok’s owner, ByteDance, experienced substantial revenue growth of over 30% in 2022, surpassing $80 billion, as reported by Bloomberg.
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