- That's so Meta
- Meta vs TikTok: The Creator Economy
Meta vs TikTok: The Creator Economy
Attracting influencers,TikTok Shortcomings, Chinese platform comparisons
Ahoy Metamates! 🚢 🏴☠️
And welcome to That’s So Meta. This newsletter looks at hard data, Wall Street analyst opinions, interviews with employees and leadership and industry competitive data.
No hype, just facts.
🆕 The TLDR This Week
What The EU Privacy Ruling Means For Meta
In case you haven’t been following, Meta got fined $275M by Irish data regulators - bringing the grand total of fines in Europe to $900M in the last year alone. It’s becoming expensive to do business in EU.
This caused a short term panic in the markets over speculation Meta could be banned from using EU user data for advertising without explicit permission. Thankfully, Deutsche Bank came in clutch with a last minute report telling everyone to chill.
They go on to offer some interesting stats:
Average user opt-in rates for data share in Europe are only 25-30%
If Meta loses an appeal, it could lose up to $5B in incremental revenue
Non-compliance can lead to a fine of 4% of global revenues
TLDR: Doing business in the EU = subsidizing a whole continent through fines.
Deep Dive: Meta & the Creator Economy (Part 1)
Meta’s secret weapon has always been the social graph and for a long time it was enough. But as engagement on Blue is mainly your aunt sharing news articles and semi-dank dad joke memes -
Is it finally time for Meta to reconsider its creator strategy? No.
Meta in 2022 runs more like Microsoft than Facebook.
It’s a fast follower on all but its metaverse bet. Let other companies blow the capital cost to create new consumer products and behaviors. Meta will wait for it to work, then build + monetize super quick. Data shows this strategy is working insanely well.
Remember when people said Snapchat will kill Meta?
We’ll be having the same conversation about TikTok in about 5 years, mark your calendar.
Free subscribers will read:
How Mark's anger led to a winning business strategy
Instagram ignored creators
❤️ Paid subscribers get the most interesting data and product info:
How much $$$ creators really make
What can Meta copy from the Chinese creator ecosystem
TikTok's less badass than you think
Key money making features at OnlyFans, Patreon, Linktree, Cameo and Chinese apps HUYA and Xiaohongshu
Reels metrics and financial projections for monetization
Chinese influencer monetization models
Will Meta be able to tame TikTok?
Most people are skeptical. A Meta PM I spoke with when writing this told me:
Quick definition: creators make a product and influencers sell it. They can be mutually inclusive.
Online Creators Had a Lackluster Start
The first creators online were bloggers in the early ‘90s. Then came vloggers. Really, it all started with a man carrying a car into an elevator. The first ever vlog:
YouTube came on the scene in 2005 and changed everything.
It helped regular people build massive audiences and it gave us Justin Beiber. Google bought YT in ‘06 and just a year later it incorporated ads and started paying creators through its YouTube Partner Program. ( this was back when people at Google were productive)
Some interesting bits:
One of the initial big YT creators to make it big in 2006 was Geriatric1927, a British YouTuber who discussed his time in the military during WW2.
The highest viewed video in 2007 was a video of two otters holding hands - 1M views
By 2010 the top YouTube creators were making between $100k-$200k / year
The original creators were really no different than reality stars - they weren’t selling products, they were competing for views to monetize themselves.
It got HOT super fast
By the time the Instagram acquisition rolled around, there was an all out war for capturing eyeballs. It was DAU or die.
In that sense, Facebook only valued Instagram as an extension of Blue.
Not surprisingly, this led to tension.
Instagram ran hostile politics internally, frequently competing against other teams. It found its footing as the startup within the company that would quickly ship features when a new competitor emerged.
Snapchat: The First Big Rodeo
TLDR: Mark's pure rage after the SNAP rejection will inform how he acts with TikTok.
When a new creator model appeared with SNAP, Mark's money wasn't good with Evan.
What followed was the most savage copy-paste in tech history. Famously, Mark held an all hands where he even told leadership to not be to proud to copy.
In the beginning, it was probably pure rage on Mark’s part. Which he's recently been able to channel into more creative pursuits, like subduing professional MMA fighters with his bare hands for recreation.
And it was coming from every direction, making it hard for Snap to compete against a decentralized enemy.
Mark even went on acquiring TBH for no other reason but to prevent Snap from doing it - now the only vestige of that company are Nikita Bier’s Twitter rants, which, if I’m being honest, make me feel the whole NPE team was just passing go and collecting $200. (just imho)
Two very unexpected things came out of this whole craziness:
Snap became Meta’s free R&D Lab. Meta was so aggressive that Snap went into overdrive - it started pumping out products and innovating at an insane velocity, previously unseen in consumer tech. But it could never monetize them fully. It kept trying to outrun Meta.
Meta cherry picked the most compelling bets and took its time to attract advertisers, moving just fast enough to keep Snap on the run.
Legend has it, Evan Spiegel is wandering the California desert with his new video drone seeking enlightenment as the stock cratered under $10 this year. Should have sold.
Let’s look at some growth metrics for reference:
Instagram Stories scaled to 100M DAU within 3 months of launching
It took Snapchat 5 years to reach that
6 months in, Stories vastly surpassed Snap’s entire DAU base
2 years in, 3M advertisers were using Stories (out of a total of 7M)
Facebook Didn't Get Influencers Initially
Instagram saw the influencer trend early but focused on celebrities, brand endorsements and attracting key hires, like Eva Chen, to build industry relationships.
That DAU push was always a source of tension with creators. They didn't get paid directly for the audience they brought on.
So instead, they'd go around that charging brands directly for posts and bill via Paypal. Until eventually , they started leaving Insta.
Today, Instagram is rapidly losing its grip on folks with > 50k followers.
Meta's only saving grace is that advertisers like to stick with what they know:
74% of advertisers say they use influencer marketing
Influencer marketing spend hit $4.4B in '22 (eMarketer)
87% say their ad platform of choice is Facebook ( vs 28% YT, 26% TikTok, 7% Snap)
But when it comes to reaching influencers, TikTok is too close for comfort even if budgets diverted to it are small still.
The Influencer Migration
It's an over-simplification to say "they got paid more elsewhere". They outgrew Instagram.
Creators and influencers want to do all these things:
Own their audience
Engage in different formats they can monetize
Have back office tools
Have easy access to brands
Have clear metrics
At a baseline, Instagram's engagement model pre-Reels was incredibly stale compared to TikTok dynamically suggesting easy to copy content ideas based on trends.
At it's core though, TikTok's not perfect either. Influencers still use one or more of these tools to manage their business:
Plus, TikTok on the commerce side still looks like a land grab:
Shopify makes 2.9% + $0.30 per transaction
Stripe makes 2.9% for tips on Live
AliPay 0.55% transaction fee
Amazon is paying creator $9k/ month to move to Amazon Live
TLDR: Both Instagram and TikTok are top of funnel platforms influencers use to acquire users and monetize them elsewhere.
How much an influencer makes
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