Less BS, More Facts, Some Opinions
Change – even change that restricts data collection or use – doesn’t have to be a negative for digital advertisers, writes Leigh Freund, president and CEO of the Network Advertising Initiative.
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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. 230 Unhurty? The US Supreme Court held oral arguments on Tuesday in the case of Gonzalez v. Google,
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The arrival of generative AI chatbots brings with it a unique threat to publishers that produce online content to answer the simple questions readers enter into search engines, like what time the Super Bowl is airing and how long it takes to cook pasta noodles.
These chatbots — such as OpenAI’s ChatGPT and Microsoft’s ChatGPT-powered Bing — have the potential to take away a portion of publishers’ search-driven traffic, with their ability to generate answers to prompts without requiring a user to click through to an article.
As a result, lifestyle publishers like Bustle Digital Group and Leaf Group are moving resources away from SEO-driven content and into original stories and personal takes. BDG’s editorial shift will also prioritize original visual content, especially “relatable, humorous, shared experiences [and] advice” stories, said Wes Bonner, head of social and audience development at BDG. At Leaf Group’s home design site Hunker, the focus will be on content that shows writers’ “taste, opinion, expertise and point of view,” said Eve Epstein, Hunker’s svp and gm.
But this shift is no small undertaking. While BDG, Leaf Group and fellow lifestyle publisher Trusted Media Brands have yet to see a notable change in the share of traffic coming from search since ChatGPT’s launch in November, referral traffic from search makes up 25-30% of BDG’s traffic and 80% of Trusted Media Brands’ traffic. Leaf Group declined to share how much of their traffic comes from search.
If AI chatbots take over the role that Google search currently has, it will be a “bigger issue for us to solve,” said Beth Tomkiw, Trusted Media Brand’s chief content officer. “My hope is that there will still be a place — even if it’s a smaller place — for the quality of work that comes from a real human,” she added. While Tomkiw is having conversations about what this would mean for TMB’s editorial strategy, no changes are taking place yet.
Deemphasizing search-driven content isn’t necessarily a new move for publishers — it’s just picking up speed. History tells us the scale model in which publishers chase clicks to build an audience doesn’t usually work to drive a successful business. It’s part of the reason why publishers have worked to build direct relationships with their audiences over the past few years — from subscriptions to newsletters — to rely less on referral traffic coming from platforms.
“For publishers who are still very focused on the page views as a primary metric, that’s going to be a bit of a problem,” said Jim Robinson, the founder of Clickseed, an SEO and audience development consultancy that works with publishers. “If that’s been your strategy, you might be a little behind the curve anyway.”
Aware of the impact AI chatbots will likely have on the way people use search, BDG is doubling down on moving away from its reliance on SEO-based stories and short news hits to drive traffic, said Emma Rosenblum, chief content officer at Bustle Digital Group.
Many digital media companies “were built on just the base level traffic of those service stories that now I do think in the next five years will not be necessary … because these technologies will be doing it way better, way faster and way cheaper than a human being who’s paid to write these search-based stories can do it,” Rosenblum said.
“We don’t want to be doing those stories,” she added. “That utility that we provide is going to disappear so quickly. And I’m glad because we hate doing stuff like that. … All the things that a computer could not replicate is where we’re going to put our money.”
BDG is investing in more original visual content, interviews, profiles and feature stories, Rosenblum said. While this means BDG will be producing less content overall, the company will produce more short-form videos for social media distribution. A chatbot can’t “try on jeans” and produce images of a pair of jeans on different body types, Bonner said.
Lifestyle publishers’ “most valuable assets are their photography and visuals that they may bring to a piece of content” now that ChatGPT is in the picture, said Melissa Chowning, founder and CEO of audience development and marketing firm Twenty-First Digital.
When asked how BDG plans to make up for a potential loss in traffic with these changes, Rosenblum said in an email that the company is “not planning to scramble to make up for some potential traffic loss… If traffic dips a bit, it dips. Chasing Google is a losing war for digital media companies, which is why we’re building up areas of our business like events and newsletters, neither of which are dependent on outside platforms.” The company’s newsletter business has grown to over 5 million subscribers, a 32% growth year over year, for example.
Less traffic means less eyeballs to serve ads to, which could take a toll on BDG’s business. But Ronsemblum said programmatic revenue will continue to be a “small” part of their business going forward, with the “lion’s share” of revenue coming from direct advertising. “In this new world we’re expecting our revenue from events and newsletters to grow enormously, offsetting any potential programmatic loss,” she said.
Leaf Group’s Epstein believes ChatGPT’s launch is simply a “continuation” of the evolution of Google search and is not “altogether new or surprising.” Publishers already had to reckon with “featured snippets,” a feature launched in 2014 (with a significant update in 2020) that pulls a section from a publishers’ page to answer a user’s prompt right on the Google search page.
However, the adoption of chatbots remains to be seen, and for this reason it would be “premature” for a publisher to “actually put a really significant strategy change into action” at this point, Robinson said. For now, publishers should be watching their referral traffic analytics to see if a real shift in user behavior is taking place, he said.
“I think there is an immediate need to be having these discussions,” Clickseed’s Robinson said. “That plan is a good one anyway, even if you take ChatGPT out of the picture. Who wants to give all that power to Google?”
This week’s Future of TV Briefing looks at how ad buyers plan to parlay programmatic into pushing for more streaming ad flexibility in this year’s upfront market.
The key hits:
The tenor of this year’s upfront negotiations will likely sound like a broken record: Flexibility will be the chorus ad buyers sing. But the tune may take on a new, programmatic-inflected pitch in 2023.
The flexibility conversation over the past few years has largely concentrated on traditional TV’s cancelation options. This year it seems set to shift to the streaming side.
In their upfront planning conversations, some advertisers and their agencies are discussing making a stronger push in 2023 for TV networks to adopt looser cancelation options for the streaming inventory included in upfront deals rather than the more rigid traditional TV terms that have been applied to networks’ streamers in recent years, according to agency executives. Specifically, buyers plan to push sellers to agree to the Interactive Advertising Bureau’s flexibility standard that advertisers be able to cancel 100% of a guaranteed digital buy up to 14 days before the ads are slated to start running.
“The ones that are coming to the table with that level of flexibility, I think, will have greater success in these negotiations,” said one agency executive.
OK. But buyers were belting a similar tune ahead of last year’s upfront negotiations. So what’s different this time? Well, agency executives believe they have more leverage to walk away from upfront negotiating tables if sellers are unwilling to acquiesce the streaming flexibility demands.
“Clients are very comfortable in using lower-funnel media for blurring the lines into upper-funnel awareness, so [connected TV] is going to play a big part of that. And I don’t need to reserve all my CTV [ad inventory] upfront. It’s being proven out over and over again: There’s very little CTV I can’t get in the open marketplace,” said a second agency executive.
In addition to some ad buyers feeling like they have enough access to streaming inventory outside of the upfront market, there’s the rising popularity of programmatic as a means of buying and selling streaming ads. For example, Roku CEO Anthony Wood said during the company’s quarterly earnings call last week that the CTV platform owner plans to make its ad inventory available to more demand-side platforms. And earlier this month, ad tech firm Magnite unveiled a streaming-centric supply-side platform with TV network owners including AMC Networks, Disney, Fox and Warner Bros. Discovery making their inventory available through it for programmatic purchase.
In short, programmatic is the underlying lever that buyers are wrapping their hands around heading into this year’s negotiations.
Programmatic has been a growing piece of the broader streaming ad buying consideration, including as it pertains to the upfront. A hot topic has been the programmatic push-pull among buyers and sellers between the private marketplaces that buyers, including Anheuser-Busch, prefer and the programmatic guaranteed deals that sellers seek. And ad buyers appear prepared to press for more money to be spent programmatically in order to secure greater flexibility — meaning, control — in how advertisers’ money is spent.
“If people start to funnel more [ad dollars] programmatically rather than direct … that’s probably the biggest opportunity for advertisers to build in their own flexibility. And it could be the biggest opportunity to convince publishers if they see enough dollars flowing that way,” said a third agency executive.
“The dream of [supply-path optimization] is that agencies will now get to dictate what happens. But the reality is — especially in CTV where there are so many fewer partners at play — to have an agency say, ‘No, it has to be PubMatic over Magnite or SpringServe over FreeWheel,’ that kind of declaration is a new thing in this part of the industry, in CTV.”
— Ad tech executive
For all the upheaval in the TV and streaming industry at the moment, the way people spend their time watching TV seems to have stabilized. In January, streaming maintained its leadership position for share of people’s overall TV watch time in the U.S., according to Nielsen’s latest The Gauge viewership report.
The breakdown of watch time among streaming services was similarly somewhat stagnant. YouTube held its lead over Netflix, which together enjoyed a comfortable margin ahead of Hulu, Amazon Prime Video, Disney+, HBO Max, Peacock and Pluto TV, in that order.
If anything stands out about the latest Gauge report, it’s the breakout of streaming pay-TV services in Nielsen’s press release. The amount of time people spent streaming linear TV networks through either their traditional pay-TV providers’ streaming apps or through a streaming pay-TV provider like YouTube TV accounted for 5.3% of total TV watch time. That means people spent more time streaming traditional TV than any individual streaming-only service except for YouTube and Netflix.
Furthermore, YouTube TV contributed 14.9% of YouTube’s watch time for the month — or 1.3 share points — which means that Netflix would have surpassed YouTube’s watch time share — if only by 0.2 share points — were it not for YouTube having a pay-TV service. That being said, YouTube TV’s watch time in January actually matched that of HBO Max and exceeded Peacock’s and Pluto TV’s shares.
And while we’re on the topic of streaming pay-TV services, people spent more time using YouTube’s streaming pay-TV service than Hulu’s. As mentioned, YouTube TV received 1.3% of watch time in January, whereas Hulu received 0.3%. Nielsen didn’t break out what percentage of time spent watching broadcast and cable TV networks occurred through streaming pay-TV services.
5%: Year-over-year increase in Roku’s platform revenue — which includes ad revenue — for the fourth quarter of 2022.
55.9 million: Number of people who were subscribed to Paramount’s Paramount+ streaming service by the end of the fourth quarter of 2022.
$2,947: The average rate for a sponsored post on TikTok in 2022, down from $3,108 in 2021 and lower than Instagram’s $5,077 average in 2022.
20%: Percentage by which AMC Networks plans to cut its programming costs.
$11.99: Monthly price Amazon will charge for a bundled subscription to Starz and MGM Plus.
Podcast publishers are using YouTube Shorts as a way to attract new audiences:
Read more about podcasters’ YouTube Shorts strategies here.
Why content on Snapchat has become less profitable for some news publishers:
Read more about news publishers’ Snapchat businesses here.
YouTube’s CEO steps down:
Nine years after taking the helm of Google’s video platform, Susan Wojcicki is departing the platform and handing the reins to product chief and former Google advertising exec Neal Mohan, according to Vox.
Netflix likes (shows about) sports:
Netflix may not want to stream live sports on its service — for now — but the company does air a lot of sports-related programming with an emphasis on lower-profile leagues, such as the hit Formula 1 series “Drive to Survive,” according to The New York Times.
How many people actually watched the Super Bowl?:
Nielsen, iSpot.TV and Samba TV have each released viewership figures for this year’s Super Bowl, and none of the companies stats match, according to Ad Age.
Amazon Studios faces an uncertain future:
Amazon’s TV and movie arm would appear to be among the most stable studios in Hollywood at the moment, but industry executives say Amazon Studios’ creative vision is clouded and its content spending is excessive with unclear returns, according to Insider.
TV sports hit a regional snag:
A major regional sports TV network owner — Diamond Sports Group — is at risk of filing for bankruptcy, which could jeopardize broadcasts of sports leagues including MLB, NBA and NHL, according to Forbes.
The blending of creativity and technology within the agency world continues at a dizzying pace.
The latest example of this fusion comes from Stagwell, which Digiday has learned is moving its digital-and engineering-heavy YML agency into its Code and Theory network of agencies, which tend to lean toward digital creative work.
YML joins a group of agencies that all operate independently from each other but share best practices, expertise and access to clients. Those agencies include the namesake Code and Theory, which is a digital-first creative shop, along with Kettle (content production and creative), Rhythm (CRM specialists), Truelogic (near-shore capabilities, which means offshore talent in the same time zone) and Mediacurrent (experts in Drupal).
“The complexity to reach consumers from a technological lift standpoint is way greater,” said Dan Gardner, Code and Theory’s co-founder and executive chairman of the network, talking about brands’ evolving tech needs. “You have to have technical capabilities, super deep benches across multiple technologies — both back end and front end — to actually deliver on the creative visions they have. And YML being part of the expanding Code and Theory network really allows that to happen.”
“Twenty years ago, there used to be the CMO and CIO, right? Now, if you look at like how the teams are changing on their side, there’s the chief digital officer,” said Ashish Toshinwal, co-founder and CEO of YML, who noted his shop brings its mobile-centric tech skills to bear while adding offshore access to talent. “It’s kind of a combination of a little bit of power from the CIO a little bit of power from the CMO but they’re leading the product experience or the customer experience for that brand. That position is gaining lots of steam, and this network is targeting that position in a very, very big way.”
The move very much fits Stagwell’s long-term goals of matching concentric circles of expertise together to expand talent capabilities and broaden organic growth among its clients. And it comes at a time when CMOs are thinking more about technology’s impact on marketing than ever before — certainly with the rise of artificial intelligence, as well as other ad-tech innovations that require as much of an engineering degree as marketing acumen.
While neither Gardner nor Toshinwal would provide actual revenue numbers individually or combined, they explained that the Code and Theory network has generated just under 25% revenue growth each of the last three years, while YML has seen closer to 30% growth. The expectation is the expanded network, which encompasses some 2,000 staffers, will continue to hit close to 20% growth in 2023.
“It follows the Stagwell playbook to create cooperative practice groups,” noted Jay Pattisall, vp and senior agency analyst at Forrester. “This type of coordination among the holding companies’ operating agencies is becoming more common because the engineering resources (both talent and budgets) are precious commodities.”
Pattisall cited GroupM’s bundling of multiple units into Nexus as a shared tech and engineering resource for the WPP media agencies, as well as Publicis Groupe’s Epsilon acquisition combined with Sapient’s offshore engineering work, as examples elsewhere.
“The benefit of this is cost efficiency,” Pattisall added. “Clients get access to resources otherwise found in larger system integrators and digital consultancies. Stagwell does not bear the cost of building and rebuilding the same technology and engineering backbone across multiple companies. At the end of the day, a shared tech and engineering resource is not true integration. Code and Theory and YML are still separate brands, leaders and P&Ls.”
Over the past month of earnings calls, gaming and esports companies projected confidence in their long-term prospects — despite potential short-term challenges. Decreasing revenues and changing consumer habits across the industry were frequent topics of discussion.
As they reported their earnings, executives at leading gaming and esports companies stressed their preparedness for the coming recession and their belief in the gaming industry’s ability to withstand it. Here are some of the potential roadblocks faced by the gaming and esports in 2023 — and some of the opportunities that leaders in the space hope to use to surmount them.
Regulators in the United States, United Kingdom and Europe have all expressed concerns about the legality of Microsoft’s planned acquisition of Activision Blizzard, which the big tech company announced on January 18, 2022. With the deal hanging in the balance, Activision Blizzard declined to hold an earnings conference call or issue an earnings presentation providing detailed information about its financial performance in Q4 2022.
While the acquisition deal appears to be in peril, Activision Blizzard is still projecting confidence that it will be able to find a path forward with both Microsoft and the pertinent regulating bodies — at least, according to the game developer’s official messaging around its Q4 2022 results: “The two parties are continuing to engage with regulators reviewing the transaction and are working toward closing it in Microsoft’s fiscal year ending June 30 2023.”
Executives throughout the gaming industry are watching the Microsoft–Activision Blizzard deal with great interest — because if it falls through, its failure could have significant implications for other M&A deals in the gaming and esports space. As gaming companies feel increased pressure from investors and the recession heats up, M&A activity is likely to ramp up across all facets of the industry.
Sony’s Q3 2022 earnings call was the definition of a mixed bag. On one hand, the company enjoyed its biggest quarter for sales since the release of the PlayStation 5 in November 2020. On the other hand, Sony’s income before income taxes actually decreased by 63 billion yen year over year. These lopsided numbers show how Sony’s dependence on hardware sales could come around to bite the Japanese tech giant as gamers’ consumption habits continue to evolve.
These days, as free-to-play and live service games continue to increase their market share, a gaming business predicated on sales of gaming hardware or premium console games is starting to feel increasingly out of date. Executives at Sony and beyond have taken note and are beginning to stress their efforts to take advantage of these newer business models.
“We are focusing our R&D allocation towards more of our biggest IPs — and live-service types of games,” said Ubisoft CFO Frederick Duguet during his company’s Q3 2022 earnings call on February 16. “And that’s why we anticipate that, behind this strong growth in the coming years, behind the very rich lineup, we will get back to about 20 percent operating margin in the medium term.”
Despite a reported 20 percent decline in console sales, Nintendo is confident in its future — and the Japanese gaming giant isn’t afraid to show it, announcing a 10 percent pay raise for its developers during its February 7 earnings call.
It’s understandable that Nintendo is feeling good about the future. After all, the company has unlocked a brand-new revenue stream over the past couple of years: intellectual property adaptation.
“By creating opportunities for consumers to encounter Nintendo topics in areas outside of the dedicated video game platform, we aim to maintain the overall momentum of our business,” said Nintendo president Shuntaro Furukawa during the company’s February 7 earnings call.
After spending years avoiding adapting its wildly popular IPs, such as “Super Mario Bros.” and “The Legend of Zelda,” Nintendo went all-in in 2022, launching a dedicated film and television division in July. With the April 7 release of “The Super Mario Bros. Movie” growing near, Nintendo is leaning further into IP adaptation with brand tie-ins such as the new Super Nintendo World at Universal Studios Hollywood.
“Gaming companies are sitting on a tremendous amount of valuable IP,” said Tejas Dessai, a research analyst at Global X ETFs. “At the same time, we’re seeing a massive democratization in the Hollywood business model, with Netflix and a lot of buyers out there for good IP.”
Indeed, as gaming has ascended to become a significant pillar of popular culture, Netflix has taken note — and taken action. In addition to licensing popular gaming IPs such as “League of Legends” for original content, Netflix started serving games directly within its streaming platform in 2022. While Netflix executives mostly focused on other areas of the business during the company’s January 19 earnings call, the company’s growing role as a gaming platform came up several times, making it clear that games are still top-of-mind for Netflix leaders such as COO and CPO Gregory Peters.
“There’s not a lot of pivots away from a traditional legacy business model that what we have to go figure out,” Peters said during the call. “We’re planting some seeds, in terms of games and things like that, that if we execute well and we’re excited about the progress we’re seeing so far, will represent the future potential for us in terms of more profit opportunities.”
Of course, this rundown would not be complete without acknowledging the treacherous waters in which the esports industry currently finds itself. Esports organizations have always been dependent on brand partnerships for the bulk of their revenue — but as the economic situation worsens, major brands are beginning to pull out of the space, making it imperative for esports companies to forge alternative pathways to profitability. So far, few have successfully done so.
Although the next earnings call for FaZe Clan, the largest and most prominent publicly traded esports org, is not until February 27, even a cursory look at the company’s financials shows just how difficult a position it — and the entire esports industry — is in. After experiencing an all-time high share price of $20 following its SPAC merger in July 2022, FaZe Clan stock currently sits at less than a dollar, and appears to be at risk of delisting due to Nasdaq rules requiring listings to trade for at least $1 per share.
In spite of these warning signs, some investors are still bullish on the long-term viability of the esports industry.
“We believe that esports is still towards the end of its early adopter sort of phase, where business models, various models of adoption, are actively being tested,” Global X ETFs’ Dessai said. “In this environment, any industry tends to be more volatile — but what’s really important to us is the expansion of audience, and almost 500 million people enjoyed some sort of esports-related entertainment event in 2022.”
Digital ad costs are rising, the online ad marketplace is becoming more saturated and the way people look for information on the internet is changing, popularizing new ways to search beyond Google. It’s left advertisers thinking about diversifying their search spend away from Google, agency executives say.
There are many ways people can find brands and products now, and advertisers are reconsidering what the future of search could mean for advertising.
The cracks of fragmentation are starting to show across search advertising as platforms like Bing’s new AI integration and TikTok’s functionality present search ad options beyond Google. However, advertisers say they’re not ready to pony up the cash for those options — at least not until they prove their brand safe and scalable enough to work with, or in place of, Google.
“Google remains the tried-and-true method of reaching the bottom-of-the-funnel and this isn’t going to change overnight,” said David Gelt, director of paid search and YouTube at Rain the Growth Agency, in an emailed statement to Digiday, “but as users shift behavior, there will be opportunities for advertisers to spend their budgets elsewhere.”
As is true with marketing, advertisers chase audiences where they migrate to most frequently. The trick is to get into emerging spaces and platforms early enough to be a first-mover, and capitalize on developing audiences for potentially less ad spend. Betting on audiences remaining there though isn’t easy as online consumption habits frequently change.
Even so, the way people search for things is shifting. Historically, Google has been the go-to search engine. Now, search has become fragmented as TikTok and YouTube serves as a search platform for things like video tutorials. Reddit and Amazon are product information search go-tos. Meanwhile, Microsoft’s new ChatGPT and AI-powered search function makes for a more nuanced conversation as opposed to a one-way search. There are many ways people can find brands and products now, and advertisers are reconsidering what the future of search could mean for advertising.
This year, Google is expected to account for more than half of U.S. search ad revenues, according to eMarketer. At Gupta Media, e-commerce and retail clients are shelling out about 30% of their ad budgets on paid search. In some cases, that figure ranges from 10% to 30%. Still, the bulk of those dollars go to Google, said Phil Decoteau, account director at Gupta Media. Over at Tinuiti, startup, performance-driven brands are spending between 60% to 70% of budget on paid search. That figure is estimated between 10% to 15% for more mature brands, according to Aaron Levy, vp of paid search at Tinuiti. Again, the bulk of those dollars go to Google. (Neither Decoteau nor Levy provided exact spend figures nor name specific channels.)
But with rising CPCs (find a full breakdown on that here), the increasingly saturated digital ad marketplace and its crop of new entrants into the search ad space, agency executives say they’re considering these new options — and potentially moving dollars away from Google.
“The fragmentation is splitting up Google’s dominance a little bit in the mindshare, and then we’re seeing some other tools take advantage of that, which may ultimately lead to some market share degradation,” Decoteau said, without naming specific names.
Enter Microsoft and TikTok.
Earlier this month, Microsoft announced its buzzy new ChatGPT-powered Bing search engine, which could stand to become a competitor to Google Search. With the integration of AI, Bing stands to become a more conversational search engine, where users can ask questions as opposed to keyword searches.
And social media’s current golden child, TikTok, has picked up over the last few months. While its search ads are seen as mostly an experimental marketing channel to reach Gen Z consumers, media buyers and agency execs expect it to become a focal point later this year.
While the short-form video platform has started to take up a bigger wallet share of ad dollars, it’s a matter of brand marketing rather than search and performance, advertisers say. Ultimately, budgets will go to where performance is, said Decoteau. Should TikTok’s search become efficient and scale enough to challenge Google’s dominance, expect to see dollars follow, he added.
YouTube, Reddit and Amazon pose their own threats to Google. Again, if they can prove their scale and effectiveness, advertisers say.
“We’ll usually focus all of our efforts on Google just because the data set is larger, testing happens faster, we’ll learn more. We’ll take what works there and then push it over to Microsoft usually,” said Levy. “But those things are so small that they just don’t make a material impact.” (He did not disclose ad spend details.)
As more search ad options become available, more unknowns in terms of brand safety, success metrics and scale become part of the picture, rendering it all best left to experimentation, advertisers said. Or as Levy puts it in reference to the burgeoning interest in emerging search options, “I hope that it’s not a cake [advertisers] took out of the oven before it was done.”
And as economic uncertainty looms, there may be less willingness to dedicate spend to experimental channels beyond testing and learning. And the bulk of search ad spend will likely continue to flow to Google for now.
“The biggest shift is that, in this uncertain environment, advertisers are much more disciplined about making sure that their ad dollars are generating a return,” said Aaron Shapiro, chairman and founder of Product marketing agency. “If it’s not trackable, they’re not going to spend money on it.”
There’s more excitement surrounding the future of search advertising than there are ad dollars to spend on it. Advertisers say that could change when those search opportunities scale and become more sophisticated — and potentially lower costs.
For now it’s seen as a possible shift of power for search engines and search ads, said Lawrence Edmondson, chief technology officer at Barbarian digital ad agency.
“We’re all holding our breath to see what happens,” he said.
Marketers may be enthralled with TikTok, creators not so much.
As central as these people have been to the short-form video’s app’s success over the last two years, they don’t necessarily feel like they’ve been compensated for it. They’re no longer seeing the platform through the rose tinted glasses they once did.
These growing frustrations have caused creators to start questioning other elements of the app they’re unhappy with.
With that in mind, Digiday caught up with seven creators, who expressed the underlying issues they have with TikTok, including creator cash.
It’s generally understood that TikTok doesn’t pay creators very well, at least not right now.
While Digiday previously reported that TikTok splits ad revenue 50/50 with approved creators (those with 100K followers or more) through its TikTok Pulse program, which launched in May last year, the platform’s creator fund doesn’t do much to keep creators motivated.
In fact, according to ForeverSammmy, who currently has 27.7K followers on the app, creators generally get less than 50p ($0.61) for 100K views via the Creator Fund.
Similarly, Sayhopkins, who has amassed 289.5K followers on TikTok and has recently become part of Goldenset Collective’s first creator cohort, explained she’s never actually cashed out from the Creator Fund. “One video I posted back in November, for example, got around eight million views, so it’s not like I don’t have money in the pot, but it’s not enough to get excited about,” she said. “The views are there, but the amount of money I’ve received so far isn’t going to change my life or pay the bills.”
Even Danigmakeup1, who has a total of 624.4K followers on the entertainment app has had similar experiences. Sharing her revenue stats between Feb 11 – 18 with Digiday, she made an average of 92p ($1.11) per day, (£7.34 / $8.89 in total) despite receiving 17K profile views and 762K video views for the same time period.
That said, TikTok did recently announce the launch of its Creativity Program Beta, following feedback from its creators on its creator solutions, including the TikTok Creator Fund. While it’s currently available on an invite-only basis, TikTok will make the service available to all eligible U.S. creators in the coming months. So hopefully things will improve.
The industry often praises TikTok’s unique algorithm, which is believed to be well ahead of Facebook, Instagram or even Snapchat to name a few – as well as its ability to make anyone go viral on the app.
Of course, this was before it came to light that the virality can also come down to TikTok execs who manually decide who and what goes viral using the app’s heating feature. It’s just another reason, in the growing list of them, why creators aren’t necessarily sold on the algorithm overall.
ForeverSammmy explained why the algorithm means her TikTok views are so sporadic and is incredibly disheartening.
“It would be great to know how TikTok actually spreads-out content and if there is a specific format so creators can use it,” she said. “You end up feeling discouraged because one video you thought was going to do well doesn’t, so you’re constantly second-guessing your creative process and your ideas.”
Creators also lack control over their account’s existence. According to IAmBrandon’s (who has 30.1K TikTok followers), it’s easy for a creator to get banned on the app due to another user reporting your account, and it subsequently gets taken down.
For creator’s that’s potentially a key revenue stream down the drain. “Creators then have to appeal the ban, in the hope it was a false or wrong report, which is pretty hit or miss,” he said.
With this in mind, IslandStyle, who so far has 1779 followers, believes TikTok needs to be far more transparent and work with its creators to provide better insight into decisions made around their accounts, especially with bans and suspensions.
He suggested that clarified terms of use would also be helpful because the inconsistency in which creators are suspended can be linked back to ambiguous rules.
“TikTok needs to create clear usage rules and stick by those rules,” he said. “It is too easy for bigoted content and comments to be left on videos. And with TikTok now pushing live streaming, there has been a ton of false reporting of accounts, meaning creators are banned for no reason or without review. There seems to be a theme of inconsistency in how Terms of Service and punishments are determined and handed out, which leads to creator distrust in the platform.”
Aware that these ongoing issues still needed to be addressed, TikTok announced an updated account enforcement system earlier this month. This was the result of hearing from creators that the previous approach was rather confusing to navigate.
While users scroll through hours of super short videos on the app, what’s often forgotten is that each TikTok has gone through some production and editing process – no matter how raw the finished product might look. Amelia Sordell, who amassed 26K followers, said that she’d love to be able to edit videos and captions after posting.
Creators are constantly battling against burnout to ensure their mental health stays intact in this ‘always on’ industry.
While creators have previously highlighted to Digiday that boundaries are important between creators and their followers, ForeverSammmy believes that it would be great if TikTok removed post views altogether – similar to what Instagram implemented last year as a way to improve mental health on the app – as views put a lot of performance pressure on creators.
Influencers thrive within their communities and it’s their loyalty which enables creators to partner with brands and convert those views to sales. This is a key reason why Eimear Varian Barry isn’t willing to prioritize TikTok (where she has 332 followers) over her main platform, Instagram (where she has 102K followers).
“On Instagram, I have a community of people who have literally been following my account for 10 years, who totally get me and my content,” she said. “But I don’t have that on TikTok. I don’t get any sense of community there. Advertisers are preoccupied with wanting videos to go viral on the app to get more eyeballs on their products, but that’s detrimental to building a long-term, solid community.”
Responding to these creators’ issues in a statement, TikTok said: “From career creators to side hustlers, entertainers to educators, those who are building their personal brand to those who create ‘just for fun,’ creators are the beating heart of TikTok. Our platform is where they come to share their experiences, turn passions into careers, find audiences that want to be entertained, and grow a thriving community.
“We also know that there’s no one size fits all approach to success on TikTok, which is why we’ve created a variety of offerings to help creators grow their community, create an income stream at every stage of their journey, and pursue their creative dreams – no matter how big or small they may be.
“We listen to our creators to understand their different motivations and goals, and we want to ensure that we continue to provide a wide range of opportunities for them to be recognised for their creativity and hard work.”