Facebook is investing $1B to attract creators

The battle for creators continues to intensify as Facebook recently announced its plans spend $1 billion on creator programs through 2022.

What’s happening: Facebook is spending big bucks to attract creators with features like its (Clubhouse copy) Live Audio Rooms and newsletter tool Bulletin. It also offers monetization products like Stars, which lets creators earn money by connecting with fans during live videos, and affiliate, a tool that lets creators earn a commission from tagging sponsored products. Its investment includes new programs that pay eligible creators for hitting milestones when they use Facebook’s creator and monetization tools.

What’s unclear: Facebook’s announcement says “we plan to invest over $1 billion in programs that give creators new ways to earn money ...” While media coverage has broadly reported the $1B effort as “paying creators,” it’s unclear how much of that budget will actually be paid to creators or simply used to build Facebook’s programs for creators. Probably some of both. Ultimately, Facebook's goal is to foster a creator ecosystem that competes with YouTube. Alphabet's video platform recently surpassed Facebook in popularity in the U.S., according to the PEW Research Center.

What it means: Social media and other tech companies are waging war to court creators. TikTok, Spotify, Snapchat, Pinterest, Clubhouse, and others are all deploying significant funds (more detail below) to pay creators. It illustrates how seriously companies are taking the risk of creators moving their fans off of social networks to monetize them and how threatened companies feel by YouTube's popularity.

The Zuck: “Creator” has become a favorite word of Facebook CEO Mark Zuckerberg in 2021. And it seems to be part of a broader effort to reshape Facebook’s image away from vitriolic politics and misinformation and toward the “empowerment” of users and entrepreneurs. It’ll be a steep hill to climb as PEW Research reports that about 3 out of 5 Americans distrust Facebook.

“We want to build the best platforms for millions of creators to make a living, so we're creating new programs to invest over $1 billion to reward creators for great content they create on Facebook and Instagram through 2022. Investing in creators isn't new for us, but I'm excited to expand this work over time. More details soon.” —Facebook CEO Mark Zuckerberg

Bonuses: Facebook said its new, invite-only bonus programs will “reward” a variety of creators for sharing content that people enjoy. Presumably, its reward is cash and not just a thumbs up. One program that will offer cash is Instagram’s Reels Summer Bonus, which pays U.S.-based creators to make engaging content on Reels. It's clear Facebook wants to encourage content that is beyond users' vacation updates to compete with YouTube's diverse creator ecosystem.

Warchests grow: Companies are pouring billions into their efforts to serve creators and compete for the eyeballs their content attracts.

  • TikTok plans to pay creators $1 billion in the U.S. over the next three years, and more than double that investment globally.

  • Spotify launched a fund in June to pay creators for building content and community on its new Clubhouse competitor, Greenroom.

  • Snapchat is paying creators at least $1 million per day. The company claims it’s created several millionaires as a result, including high school Katie Feeney and 19-year-old star Cam Casey.

  • YouTube created a $100 million shorts fund that will be dished out through 2022. The company says it’s “the first step in our journey to build a monetization model for Shorts on YouTube.”

  • Pinterest launched a $500,000 fund in which creator-participants can earn $25,000, as well as hands-on training to help them succeed on Pinterest.

  • Clubhouse offers the Creator Grant Program that aims to support and grow its “emerging Clubhouse creators.” Clubhouse also unveiled features that allow for tipping, tickers, and subscriptions.

Marketers want influencers: A new report from eMarketer/Insider Intelligence projects that advertisers will spend $3.7 billion this year on influencer marketing — an increase of 34 percent from 2020. The firm anticipates that advertisers will dish $4.6 billion to influencers on TikTok, Instagram, and YouTube.

Stil peanuts: The Information’s Kaya Yurieff notes that while the increase of influencer advertising is big news for the creator economy, it’s still a small component of social media advertising. Yurieff reports that advertisers are expected to spend $59 billion this year on social media ads, and by 2023, that’ll reach $80 billion.

  1. 2

    A lot of insight, thanks for sharing! "Creators" became the new strategy to bring consumers on board.

  2. 2

    FB becomes the second MySpace - too much of everything. Zuck needs to slow down and focus on something alone.

    1. 1

      Or, just get the fuck out of the company and ease off on the God complex... He has money for 10 lifetimes, but he's still in love with power...

  3. 2

    Timely share, Thanks for the breakdown Bobby.

  4. 1

    Well compiled!

    I think influencers and creators are becoming the go-to for many, many businesses. I'm still not sure about the time it takes to create an impact in terms of sales or if some companies are even targeting the right creators. But definitely a strategy one should look to incorporate going forward, assuming it fits in the business model.

  5. 1

    Nice share, thanks!

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