Marketers are racing to work with creators this year, with US ad spending in the category estimated to hit $37 billion by year's end, according to a new report from the Interactive Advertising Bureau.
That's up 26% year-over-year.
The vertical is growing four times as fast as the overall media industry, per IAB's analysis.
For context, the largest digital ad segment tracked by the IAB last year was search, at $102.9 billion.
The 2025 spending estimate on creators is nearly triple the amount from 2021, when social-media consumption was booming amid the pandemic lockdown.
There are three things driving the spike in interest in creators among brands, said Zoe Soon, an IAB VP who focuses on emerging advertising channels like the creator economy and gaming.
First, influencers have a "built-in distribution" network to serve ads across social channels. Second, they have proven cultural relevance among young people. And third, they have the ability to connect with "ad-avoidant" Gen Z consumers at a time when there are "diminishing places that you can reach them," Soon said.
Creators are now considered more of a "must-buy" than other emerging ad categories like connected TV and commerce media among the roughly 450 US ad spending decision-makers who responded to the IAB's survey between July and August.
IAB earlier projected connected TV ad spending would hit $26.6 billion in 2025.
"Creator content is outperforming brand-led content across almost all metrics," Dontae Mears, an SVP of influencer marketing at Weber Shandwick, told Business Insider.
Here are three key takeaways from IAB's report:
1. The creator ads business is eating up spending from legacy channels
A few years ago, it was tough to get a brand advertiser to put more than an experimental budget behind influencer campaigns. That's not true today. Marketers know they have to invest in creator content if they want to reach some audiences, even if it's harder to scale than a campaign run on Facebook or Google.
As legacy formats like linear TV lose audience share each year, marketers have to adapt.
If creators are "driving the cultural zeitgeist," and you have other channels that advertisers are not seeing as effective anymore, "it makes sense that they start moving those dollars over," said Chris Bruderle, IAB's VP of industry insights and content strategy.
2. Mid-tier creators reign supreme
Mid-tier influencers with between 50,000 and 500,000 followers were the most commonly hired by respondents to IAB's survey.
Sixty-one percent of respondents said they hired mid-tier influencers, followed by 55% who said they worked with either macro influencers (500,000 to 1 million followers) or micro creators (10,000 to 50,000 followers).
VIPs and celebrities were the least popular, with 30% of respondents saying they worked with the cohort.
The IAB's Soon attributed the popularity of mid-tier creators to their ability to drive sales for brands while also having enough scale to generate some broad brand awareness.
3. AI is top of mind for marketers
While creators can offer authenticity to marketers, AI is still very much in play among those who responded to the IAB's survey.
According to the IAB, about three in four brands are either already using or planning to use AI tools. A bulk of that use is going toward tasks like editing content, writing creator partnership briefs, and A/B testing. Lower on the list: working with "synthetic creators" — otherwise referred to as virtual or AI influencers.
"AI is really helping us develop the right strategy," Mears said. "Being able to analyze a lot more of that initial input data of who's the consumer that we're going after, what are the kind of messages that resonate with them, what are the trending topics, what are the cultural sparks?"
That work then helps guide partnership briefs and planning, he said.
