Instagram launches new creator monetization tools amid platform e-commerce wars
Facebook-owned Instagram is making a bigger play for creators as platforms compete over e-commerce superstars. On the first day of Instagram’s first Creator Week today, Facebook CEO and co-founder Mark Zuckerberg appeared during the live event to announce a series of new tools creators can use on Instagram to make more money from the purchases they’re driving for brands.
The news comes as the social platforms—TikTok, Pinterest, Snapchat, YouTube and Twitter—are increasingly leaning into e-commerce and using creators to drive those tools as they become an important as part of brands’ marketing strategies.
“Our goal is to be the best platform for creators like you to make a living,” said Zuckerberg during the three-day livestreamed event addressing the approximately 5,000 influencers invited to Creator Week. “And if you have an idea that you want to share with the world, you should be able to create it and get it out there easily and simply—across Facebook and Instagram—and then earn money for your work.”
The first is a native affiliate tool Instagram is testing in the next few weeks that will allow creators to earn commissions on purchases made from their posts. Affiliate posts on Instagram will be labeled “Eligible for Commission” so platform users know when their purchases will directly support creators. Brands, rather than the platform, will be the ones to set commission rates for the posts.
An Instagram spokesperson says the platform is already working with several beauty brands ahead of the launch of the new affiliate tool, including Sephora, Benefit Cosmetics, Kopari Beauty, Mac Cosmetics and Pat McGrath Labs. Beauty brands like these have seen a massive lift in e-commerce sales through the use of Instagram creators; the new tool will put a little more power in the hands of creators to take a larger percentage of direct sales. However, it could change how brands approach influencer contracts and fees.
Creators that have launched their own product lines—a popular approach for many influencers as an additional revenue stream—will also have new opportunities in leveraging their Instagram profiles. Rolling out globally today, creators will be able to link their Instagram shops to their personal Instagram profiles as well as to the business profiles. This will allow creators to sell their products directly to fans.
Creators can also choose to link their account with one of the platform’s four merchandise partners: Bravado/ Universal Music Group, Fanjoy, Represent and Spring, with a tool that will be available to eligible creators in the U.S. by the end of the year.
Finally, Facebook is adding additional ways for creators to earn money from badges on Instagram Live and Stars on Facebook, which creators use to make more money from their fans watching their programming, similar to TikTok and Twitch’s “tip” feature. Instagram says creators will be able to earn more when they meet milestones including going Live with another account. Facebook will also launch “Star Challenges” with which creators can earn free Stars if they meet milestones such as broadcasting a certain number of hours or if they earn a certain number of Stars within a certain amount of time.
Facebook faces more competition than ever when it comes to embracing creators and the value they add to marketers, especially in light of TikTok’s growth in the area. An April 2021 report from influencer marketing platform Linqia found that 93% of U.S. marketers plan to use Instagram for influencer marketing, down from 97% from February 2020. When it comes to TikTok, 68% of marketers are planning to use influencers on the platform and that a 16% increase from the year before. Last week, L’Oréal announced a partnership with TikTok to test e-commerce tools, with creator content taking center stage.
Adding more options for influencers is one way to help Instagram fuel its e-commerce ambitions. Social commerce grew to 38% of sales in the U.S. in 2020 and is expected to bring $37 billion this year, according to eMarketer data. At the end of May, Instagram added a new “Drops” tab for viral products on the platform, livestream shopping is becoming popular and digital storefronts called Shops were launched last year on Instagram and Facebook.
Instagram’s Creator Week offers sessions with Instagram superstars like JoJo Siwa (10.8 million followers), 50 Cent (26.8 million followers) and Elsa Majimbo (2.3 million followers). Instagram execs like Alex Cook, strategic partnerships, shopping and Besidone Amoruwa, part of the content and creator partnerships team, are leading panels around algorithm myth-busting, how to manage the press and how to get branded content deals.