Social media platforms earn their revenues from selling advertising space. For this business model to succeed, platforms require plenty of eyeballs. Enter the $1 Billion Creator Fund. 

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Two-and-a-half centuries ago Adam Smith, father of capitalism wrote “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest”.

Mark Zuckerberg reminds us of this sentiment with his pledge of $1 billion investment in the creator community: “By the end of 2022, we plan to invest over $1 billion in programs that give you new ways to earn money for the content you create on Facebook and Instagram” runs the announcement. Big on gesture though scant on detail. And even the size of gesture is diminished when set against the $84 billion in advertising revenues generated by the group of companies in 2020. 

So if it is self interest rather than altruism-driven largesse what are the drivers prompting the creator windful? As is often the case the drivers are both push and pull. Zuckerberg stands as a Canutian figure striving to fend off TikTok’s tide of competition. Don’t forget TikTok’s creator fund has been in place for some time - though the short-form video app continues to tinker with eligibility

On the flip side many Instagram influencers feel as though the move is too little; too late. They argue that the $1 billion investment weighs heavily in favour of new talent rather than the Instagram influencer stalwarts who’ve helped make the platform so attractive to users and advertisers alike. 

Social media platforms earn their revenues from selling advertising space. For this business model to succeed, platforms require plenty of eyeballs. 

The longer these platforms can cajoul users to spend on their sites and the higher the frequency of return visits, the more advertising slots these platform owners can serve up to their users.

How do social media platforms build stronger bonds with users turning them into loyal customers? Tap into the content they're already enjoying. Their favourite creators they are already following. 

Scott Guthrie is a professional adviser within the influencer marketing industry. He is an event speaker, university guest lecturer, media commentator on influencer marketing and active blogger. He works with brands, agencies and platforms to achieve meaningful results from influencer marketing. That tells you something about him but it's not giving you a lot of detail, is it? So, read more here.

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