Scribe, November 2021
I’ve written recently about how so-called “influencer culture” should be seen as a microcosm of wider trends and treated by consumers, politicians, and business accordingly, rather than concentrating on its negative aspects or treating it as a fad. In this piece for Tortoise, I argued that the creator economy is the perfect example of a self-regulated marketplace and that any teething problems it will face – and is rapidly facing – will be subject to market correction.
Most books on the topic in the last 10 years have been relentlessly negative, reactionary and have missed the bigger picture so, along with Chris Stokel-Walker’s TikTok Boom, also published in the last six months, it was liberating to read Olivia Yallop’s Break the Internet.
As Yallop points out, the influencer industry is one of the fastest growing sectors of the digital economy, worth $10bn today and rising to $15bn in 2022, “fuelled by a perfect storm of generational precarity, the rapidly increasing role of platforms, and the creeping monetisation of every aspect of our identities.”
Much has been written about the increasing power of the individual, which I have previously put down to the ability to scale word-of-mouth for the first time in the history of media, and which Yallop also identifies. Word-of-mouth has always been the most effective mechanism of influence but before social media, there was no way of deploying it at scale (Tupperware parties were a good early attempt).
There’s also the issue of the increasing value of human creativity and individual expression in an automated age, as identified by several commentators, notably economists Roger Bootle and Douglas McWilliams in their books The AI Economy and The Flat White Economy respectively, and also here by Yallop.
The beginnings of the power-shift to the “ordinary” individual began with TV shows such as Big Brother, Pop Idol, The Weakest Link, Who Wants to be a Millionaire? and Britain’s Got Talent. The medium of TV went so far in democratising fame and fostering the necessary community to support it.
But Yallop goes further, arguing that the influencer economy has kick-started power-shifts elsewhere in society. She cites a 2018 study by Edelman which confirmed that for the first time, over half of the world’s population believed that brands could do more to solve social ills than the government – and, crucially, believed that it was easier to compel brands to act on issues of social change than governments.
For proponents of a free market, this is exciting. It truly embodies the concept of a market economy.
Yallop points to recent evidence that governments are increasingly on board with the shift to individual influence. In Indonesia social media stars were amongst first to receive coronavirus vaccines; the UK government spent £63k paying social media stars to promote Track & Trace; and in some states of US, some federal governments paid social media stars to wear masks.
Rightly keying in on evolving measures of value, Yallop draws parallels with the stock market, arguing that “social metrics function like risk ratings provided by credit rating agencies: AAA or 100k followers are both a solid indicator of market value.”
She’s also the first commentator I’ve read to point out the blurring boundaries between venture capital and creators, a trend embodied on the west coast of the US, led by Andreessen Horowitz, and accelerated by ex-Andreessen Li Jin, who coined the phrase “the passion economy” with her new fund, Ateiler Ventures (strapline: “We envision a future in which the value of unique skills and knowledge can be unlocked, augmented, and surfaced to consumers.”)
Like other types of celebrity before them, successful influencers often turn to angel investing (and are well qualified to identify trends), whilst VCs are madly blogging, posting and podcasting. Yallop cites that the value of global VC deals for DTC companies in the fashion and beauty space exploded from $1.2 billion in 2008 to $10.2 billion in 2015. She calls this the “creator stack” or “enterprisation of the consumer”. It’s certainly something we’re looking closely at at Northbank, with ventures an obvious extension of talent monetisation.
The unlocking of new forms of value is a natural – and exciting – consequence of the power shift (see also NFTs and meme stocks); as is a shift in the labour market, with enormous value being created by individuals who are essentially monetising their lives. And it’s not just about celebrity influencers: lower-level creators are making a living from their content, increasingly expert-led: a trend which we identified when we launched Northbank Creators a few months ago, now the fastest growing area of our business.
As with all marketplaces, ancillary industries have sprung up. “Pods” create fake traffic by mutual agreement; hype houses accelerate the creation of content; tea channels generate news stories around influencers; anti-capitalist BreadTube (otherwise known as LeftTube) has developed in response to market sentiment; snarking meet-ups extend into “real life”; and sites such as Tattle Life purport to do important work in holding influencers to account.
Via a hands-on journey through influencer parties with entry dependent on follower count, snarking meet-ups, tea channels, junklord content, BreadTube, and lots of her own personal examples, Yallop demonstrates convincingly that “… the rise of influence is a story of platforms, power, algorithms, atomisation, attention, decentralisation, and networks, the championing of the individual over the institution and the market over everything … A fundamental restructuring of the way that information is disseminated, power is accumulated, and culture is produced.”
The key take-away, which needs to be more widely understood, is that so-called influencer culture is the twenty-first century marketplace.
As Yallop says, focus on the platforms themselves is misleading. It’s the opportunity to scale the fundamental human concept of word-of-mouth which they create which has changed everything.
It means that everything about our lives is potential content, and therefore potentially monetisable, which has profound implications for the way we shop, socialise, campaign, run businesses and run countries; in short, the way we live our lives.
Yallop concludes by saying that the “creator economy” will soon just be “the economy”. In Break the Internet, she shows that it could just be the basis of the most sophisticated marketplace we’ve ever seen.