Is the creator economy really recession-proof?

by Samuel Pordengerg Jan 30, 2023 News
Is the creator economy really recession-proof?

Everyone is concerned about a possible recession. You are all aware of the chaotic state of things if you have tried to buy eggs recently. The World Economic Forum conducted a survey of economists and business leaders and found that almost two-thirds of them believed there would be a recession in 2023. In December, the Federal Reserve raised interest rates in the most aggressive fashion since the early 1980s, meaning that if it's more expensive to borrow money, we'll spend less. What will happen next?

According to NPR, even if we do end up in a recession, it won't be a repeat of 2008 and will be a recession with a small r. If you are part of the creator economy, which consists of two million full-time creators and 46 million amateurs, you might not be worried.

These creators make money by using a variety of methods, including sponsored posts, selling merchandise or their own goods, using affiliate links, or by making money off of the platforms themselves. According to Glassdoor, content creators make an average of $48,800 a year. The creator economy is often considered to be recession-proof because it is driven by direct financial support from audiences and creators' ability to connect with fans.

Is it time to make changes to your channel? Everything has to do with the economy.

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Ads might not slow for creators as much as they slow for others.

People's buying habits change during a recession. They may be less likely to click on an ad if they are less willing to pay more for products. According to Ali Fazal, vice president of marketing at the creator management platform GRIN, people aren't going to follow creators and they aren't going to stop trusting them.

"That's why we think of the creator economy as a very recession-proof channel, because in tough economic times, people lean on the relationships that they form, the para social relationships with the creators, more than ever."

According to data from Retail TouchPoints, companies in the U.S. are expected to spend $4.7 billion on influencer marketing in the next five years. Sixty five percent of brands expect to increase their budget for influencer marketing. The founder of a marketing technology platform predicts a shift toward more effective marketing that is based on individual consumer needs. Consumers respond better to influencer marketers than they do to brands. 92 percent of consumers trust influencer marketing over traditional advertising, according to a report. A new study shows that people are more likely to buy a product if it's recommended to them by a member of a community they belong to. According to Forbes, influencer marketing content has a better return on investment than traditional marketing methods.

According to Steinberg, brands will begin to view more personalized consumer experiences as content and increase investment in creative after years of focus on media in the future. He writes that the new-age, immersive content will lead to more direct conversions for brands.

Ryan Detert, the founder and CEO of Influential, says that during an economic downturn brands are very careful with their money. They might spend more on influencer marketing as it is cheaper and has been proven to work.

The audience is savvy enough to know that the creators of the high production value videos are in a financial relationship with the sponsors. He said that viewers helped pay the creator by buying the products they were sponsoring. If you get a subscription to Better Help or makeup, you're also supporting a creator who makes you happy.

Creators can't depend on ads and sponsorships completely, though.

Ad revenue on YouTube is $18 per 1,000 ad views, which isn't enough for anyone to live on If they want to make enough to buy eggs in 2023, they have to add in sponsorships, but they don't always come in consistently. During a potential economic downturn, people need to change their revenue sources. The creators of membership programs, merchandise sales, and digital products may be more resistant to a recession.

Sarah Renae Clark, a YouTuber and content creator, has diversified the ways in which she brings in money by making revenue from ads and sponsored content, as well as selling coloring books, planners, and other art supplies. She isn't too concerned about a potential recession. She and her husband make money from sponsors as well as creating products that sell to hundreds of units per day.

There are products that our audience requires. If there is a recession, Clark is not going to panic. People aren't like, "Oh, I won't spend that money because it's a t-shirt and it's about supporting your channel." They are buying it because they want it.

People will still buy what they want even in a recession.

No one is completely safe from a potential economic downturn.

The creator economy is not immune to economic downturns. Audiences may not have as much disposable income during a recession. More people are turning to online content creation as a source of income at the same time they are forced to work for less or spend more on what they need in order to create.

The potential recession in the U.S. doesn't mean that creators in other countries won't be affected. There are strong financial ties between the U.S. and the rest of the globe, and many creators have subscribers, fans, and clients in the U.S.

Many subscription-based content revenue streams have the potential to slow during a recession because of the broader economic environment, according to the Nieman Lab. According to the data from the Dealroom reported by the Financial Times, a third of people who pay for media subscriptions are planning to cut back in the next five years.

One in four Americans say they want to work as an influencer when they grow up, which is good news for the creator economy. 86 percent of young Americans are willing to try out influencing, 12 percent of young people said they already were, and 20 percent of young people said they personally know an influence.

The creator economy is still in its early stages. Since 2004, Facebook has been around. It remains to be seen how the economy will play out in the long run since it hasn't experienced a recession yet. scrolling doesn't stay free until then