It’s hard not to get nervous about the future of the economy when there is news of new layoffs each week. Even the tech sector is facing tough times with companies like Facebook, Microsoft, Google, and Amazon laying off thousands of employees. While content creators have likely felt the effects of the current economic downturn it’s not time to worry yet. Experts don’t expect a 2008-style crash and there are encouraging signs that the impact on content creators might be limited.
There’s debate among experts as to whether America’s already in a recession. One side argues the U.S. entered a recession last summer because it fit the definition of two consecutive quarters of negative gross domestic product. The other side, including the National Bureau of Economic Research, which defines U.S. business cycles, disagrees the U.S. already is in a recession because of the strong labor market. Regardless of what the situation is being called, inflation is up. And people are seeing higher prices for just about everything. Meaning consumers have less discretionary income.
With less money in people’s pockets after paying for the necessities, consumers have to make choices about what “extras” they continue to pay for. One option content creators have is to temporarily lower the price of their courses and digital products. While content creators might be making less than before, dropping prices could help build brand awareness. And keep the loyal following creators have already built.
Another option is to throw in an added freebie for your courses if it’s possible. During an economic downturn, consumers want to feel they’re getting a deal. Try creating a short lesson that students can take advantage of at a significantly lower or at no additional cost. You can create a bundle to offer this to your students.
For example, if your specialty is yoga, try offering a short meditation video at a super low rate or even at no additional cost. This gives your consumers an extra incentive to take your course and encourages them to engage with more of your content, thereby helping to build brand loyalty.
Fortunately, data from Retail TouchPoints shows U.S. companies are expected to spend $4.6 billion on influencer marketing this year. That’s double what the expected rate was just five years ago. And research from Nielsen shows people trust influencers more than they trust brands. This gived companies a reason to continue advertising with content creators even in a recession.
Ali Fazal, Vice President of Marketing at the creator management platform GRIN, told Mashable that he doesn’t expect the economic downturn to upend the content creator world. Content creators have worked hard to build a relationship with the people who follow them. Those who have built strong communities aren’t likely to lose followers. That’s because a bad economy doesn’t change that consumers trust the content creators they follow.
“That’s why we think of the creator economy as being a very recession-proof channel, because in tough economic times, people lean on the relationships that they form, the parasocial relationships with the creators, more than ever,” Fazal said.
While it’s expected that brands will continue to maintain their advertising with content creators, now is the time to take the age-old adage to not put all your eggs in one basket seriously. Diversifying income streams is the best way to recession-proof any business. So content creators should be looking to offer courses, digital products, and coaching where possible. Plus they should build their sponsorships, ad revenue opportunities and, if they can, try to add in their own merch.
Most importantly, it’s vital content creators stay true to their brand and lean into what makes people tune into their content. During a time when money can be tight for people, it’s important followers feel a connection to content creators and continue to see value in the content that’s being provided.
Your weekly dose of creative chat and Teachable updates. Get our weekly newsletter.