Instagram plays catch-up by finally paying its creators. Will they stay?

Instagram announced Wednesday it will start paying influencers a share of advertising revenue, joining competitors YouTube and TikTok in paying its creators. But the move begs the question: Why has it taken Instagram so long to join its peers — and is the move enough to keep creators on the platform?

It may be surprising to learn that Instagram wasn’t already taking measures to ensure creators stuck with the platform instead of jumping ship to another that actually pays them for the engagement and users they bring.

Before, creators who primarily used the platform had to gain considerable followings and, in some cases, team up with digital talent agents in order to score coveted brand deals to see any inkling of cash. 

Now, with Instagram’s latest features, creators will be able to monetize through ads on IGTV videos, digital badges on Instagram Live, sales of merchandise by way of Instagram Shop, and be matched with companies for sponsored campaigns via the Brand Collabs Manager tool. 

Users will begin to see ads on IGTV starting next week, and badges will roll out within the next month to a select number of creators.

Instagram creators
Instagram

“It’s a good sign Instagram is testing these new features and frankly, it seems a little delayed,” said Mae Karwowski, founder and CEO of Obviously, a marketing agency focused on connecting influencers with brand deals. “Other platforms have made it clear that creators are an important part of their ecosystem and built ad sharing features, like tips on TikTok and AdSense revenue on YouTube.”

YouTube’s business model has long included its reliance on its creators. In 2019, YouTube doled out $7.5 billion to its creators of the $15 billion in ad revenue YouTube took in. Creators on TikTok can earn thousands of dollars in donations, or gifts, during livestreams. 

“Instagram is responding to that, and this is a smart move to keep the best influencers invested in growing on their platform rather than focusing on other platforms,” Karwowski said. 

In a statement to Digital Trends, Instagram said it saw a 70% increase in Instagram Live views from February to March following many shelter-in-place mandates. The feature is no doubt growing in popularity due to the coronavirus, and with the introduction of badges, Instagram is hoping to replicate its competitors’ features by letting users give influencers cash gifts (up to $5) during a livestream. 

For Karwowski, Instagram’s move to help creators monetize their presence on the app is a strong signal that live content is quickly becoming the best way to engage with an audience, and something “that’s not likely to change in the future.” 

But creating live and long-form content is time-intensive, and creators want to be paid for their efforts. Instagram is now incentivizing influencers to use IGTV by showing ads before their content and giving them a cut of 55%, while also aiming to make up for the stand-alone app’s dismal downloads at the beginning of the year.

“Providing a variety of monetization tools is crucial in order to support all creators on Instagram, from emerging digital stars to established entertainers and everything in between,” Instagram Chief Operating Officer Justin Osofsky said in a statement to Digital Trends. 

Melissa DeMarco, a digital talent agent at A3 Artists Agency, said Instagram’s move to foster influencers as entrepreneurs, not just as content creators, will bring about higher-quality video on the platform, maybe even a handful of successful IGTV series that could be cross-promoted across social media platforms.

And for those YouTubers who are already on Instagram but may not dedicate much time to it, Instagram offers them a chance to “diversify their content, test shorter formats that may not perform on other platforms and expand their revenue streams,” DeMarco told Digital Trends.

“It’s great to see Instagram building a program to forge stronger relationships with the creators that have leaned into the platform,” she said. “I think this will further equalize the playing field for creators who aren’t currently active on YouTube and solely creating on Instagram.”

Will Instagram influencers stick around following the introduction of these monetary features? We will have to wait and see. But cash will likely be enough of a draw to pull in even wanna-be influencers, or those who have recently abandoned the app for another.

“I’m sure while the concept is simple, it’s a major responsibility for Instagram to take on,” DeMarco said. “It’s a big decision to take a social platform and use it also as a marketing tool.”

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