Description

Being a creator these days is costly.

In this episode of Campaign Chemistry, Hannah Campbell, founder and managing director of U.K.-based One Twelve Agency, and Campaign reporters Cecilia Garzella and Julia Walker join in to discuss the late payment crisis in the creator economy impacting all key stakeholders. 

Campaign recently published Inside the creator economy’s late payment crisis, an in-depth look at the $250 billion creator economy, exposing flaws in a financial system that touches every corner of the industry. The group discusses the ripple effect of Net 30- 60-, 90-day payment terms when it comes to creators, identifying the ways it impacts their livelihoods, in addition to the toll it takes on the smaller shops representing them. They also take a look at the complexities within the ad agency payment system that lead to the late payment systems and possible solutions for the future.

The sound bite

"What can we do to solve this?"

The takeaways

1. The creator pay system typically involves long payment terms, affecting creators' cash flow.
2. Delayed payments can lead to significant financial strain on creators and agencies. Creators have reported the long payment terms impact their livelihoods, from providing for families to paying for bills, etc.
3. The creator economy is a “Wild West,” as the lack of legislation and regulation allows brands to exploit creators' vulnerabilities. The U.K. has implemented legislation and in the U.S., SAG-AFTRA introduced an influencer agreement in its contracts in 2021.
4. Many creators lack the financial literacy to negotiate fair payment terms.
5. There is a growing awareness and willingness to discuss payment issues in the industry, as opposed to merely a year ago when it was difficult to get stakeholders to go on record for fear of retribution on brand deals.
6. Smaller agencies struggle more with delayed payments compared to larger firms.
7. The conversation around creator pay is evolving, with more voices advocating for change and services popping up to aid in the payment crisis.
8. Proposed solutions include upfront payments, escrow accounts for creators and regular audits of agency fees.

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