2023 Tipalti Report: Understanding Creative Challenges to Unlock a Superior Brand-Creator Relationship
The creator economy has witnessed exponential growth in recent years, with creators spanning various platforms amassing vast followings and influencing consumer behavior. According to Goldman Sachs, the creator economy is expected to grow substantially, reaching a staggering $480 billion by 2027. This growth signifies a seismic shift in how consumers engage with content and presents a unique opportunity for brands to harness the power of authentic storytelling. As brands increasingly rely on creators to engage their audiences effectively, building lasting relationships is more important than ever before.
To understand the components that make a best-in-class relationship between brands and creators, Tipalti surveyed over 1,200 creators across the U.S. and U.K. who earn part or all of their income creating content. The report delves into these shifting dynamics, revealing a nuanced picture of the challenges, aspirations, and preferences shaping these partnerships and invaluable insights for brands aiming to thrive in this dynamic ecosystem.
The Shifting Dynamics of Brand-Creator Relationships
The surge in the creator economy has compelled brands to reevaluate their marketing strategies, no longer making collaborations with creators a trend but a strategic imperative. In fact, creators express a resounding desire for long-term partnerships with brands. Astonishingly, 83% express a desire for enduring bonds, yet 57% of those face challenges in establishing these connections.
Aspirations among creators vary across generations, with nearly one-third (31%) of part-time creators aiming for a full-time shift by 2025. Gen Z (25%), Millennials (33%), and Gen X (23%) exhibit different goals, emphasizing the importance of tailor-made strategies to nurture their ambitions effectively.
In the past year, 71% of creators have become increasingly selective in choosing brand partners. The criteria for collaborations are multifaceted, with 51% considering brand reputation, 49% seeking alignment with values and aesthetics, and 47% prioritizing creative freedom. However, fair compensation stands tall as the non-negotiable factor, as 61% of creators prioritize it above all else. Understanding what creators seek and value is paramount in fostering meaningful and long-lasting collaborations.
The Cost of Negative Experiences
Reputations are everything, especially when it comes to business. Among respondents, 96% said the type of experience they have when collaborating with a brand significantly influences their likelihood of working with them again, and 76% have recommended brands to work with their peers based on their own positive experiences. Despite these statistics, negative experiences are still common, and the cost of these negative experiences are terminated partnerships and diminished creativity, with 59% of creators ending partnerships due to bad experiences.
What contributes to a negative experience? Creators say feeling undervalued, late payments, and a lack of automation are the key drivers. Over half (56%) of creators report feeling undervalued by a brand for their work due to unfair compensation (50%), unrealistic project expectations (42%), and late payments (34%). Receiving late payments can be more impactful than you’d think and even result in diminished creativity. Of the 56% of creators who have faced late payments, 48% report a negative impact on their motivation to focus on creative work, while 46% report financial strain. Ultimately, 74% of creators who felt undervalued by a brand for their work have stopped working with that brand.
Not to be overlooked is the value of addressing creators’ administrative needs with automation. 43% of creators who have seen an increase in automation from brands go as far as to say that they have stopped working with them due to the administrative hassle caused by a lack of automation. Close to one-third (31%) of creators spend over 11 hours per month on administrative tasks; valuable time that could be spent on their creative endeavors.
The Impact of AI on the Creator Economy
AI tools are increasingly integrated into the creative process—39% of creators actively incorporate AI—aiding creators in generating better content (81%) and working more efficiently (90%). However, there is a delicate balance to maintain, as 61% of creators express concerns about AI’s mixed or negative effects. This sentiment spans across generations, with Gen Z being the most skeptical (71%), followed by Gen X (70%) and Millennials (69%).
With the rise in AI also comes a shift in expectations of creators from brands. Creators report experiencing changed expectations for speed of work (55%) and content quality (44%), as well as a reduction of compensation potential (41%). Brands should acknowledge these concerns and mindfully adopt technology to reassure creators of their unique value.
Brands can enhance collaborations by investing in automated payment systems and providing essential support services such as tax compliance assistance, invoicing, payment calculation, and payment processing. In fact, 95% of creators state they are more inclined to repeat doing business with brands using automated payments. Due to macroeconomic factors like inflation and a volatile market, 88% of creators agree that seamless transactions are more important now than they were five years ago. By focusing on consistent and trusted payments, brands inherently build and maintain long-term bonds.
Building and maintaining mutually beneficial relationships requires consistent efforts. And in the dynamic world of brand and creator relationships, understanding what makes for a best-in-class experience is crucial. For creators, they prioritize brands that have the potential for long-term collaborations, offer fair and fast pay, make them feel valued, provide administrative support, and embrace new technology mindfully.
As the creator economy continues to flourish, brands that invest in these relationships stand to forge authentic, enduring partnerships that captivate audiences, enhance brand credibility, and drive meaningful engagement. To learn more about how finance automation can uplevel your relationships with creators, visit our Mass Payments page.
The Creative Challenges: Unlocking a Superior Brand-Creator Relationship survey was conducted between July 26 and August 16, 2023. Tipalti surveyed a total of 1,231 respondents in the United States and the United Kingdom who earn their income either full- or part-time by creating or producing content. The study was conducted at 95% confidence with a +/- 3% margin of error.
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