Instagram is developing Creator Shops, tools targeting 'creator middle class'
In a recent Instagram Live session with Instagram boss Adam Mosseri, Mark Zuckerberg announced a suite of new tools which would help Instagram influencers monetize their online presence. In addition to Instagram's existing shopping features, Zuckerberg mentioned Creator Shops, an affiliate recommendation marketplace, and a "branded content marketplace". The new tools aren't yet available, but they could centralize and simplify revenue generation for influencers.
Last year, the company had announced Facebook Shops and Instagram Shops so businesses could sell to customers directly. However, only business accounts have access to this channel. The new Creator Shops would offer similar functionality to influencers on Instagram. Zuckerberg said that this could offer a "more personalized and convenient experience" since physical stores close during lockdowns but online stores stay open.
Discussing a separate affiliate marketplace, the Facebook CEO said that creators should get paid for recommending products. While such deals happen even today, they mostly do between brands and influencers directly while Instagram doesn't get a piece of the pie. What might initially come across as Zuckerberg's newfound compassion for creators and influencers could just become another way for Facebook to earn money.
The third tool that Zuckerberg touched upon was a "branded content marketplace" that would match influencers with sponsors. This tool would be aimed at budding influencers and creators that he believes constitute a "creator middle class". Zuckerberg added that Instagram intends to offer "very favorable terms" to creators and that the feature isn't being built from the perspective to make a lot of money.
However, we believe the bigger play for Facebook here is to reduce its dependency on cross-platform advertisements after Apple dealt that revenue stream a major blow earlier this week by rolling out App Tracking Transparency. Facebook and its subsidiaries would probably keep commerce activities on their own platforms to track activity, thereby personalizing ads for users and relaying effective analytics to advertisers.
We believe that bypassing Apple curbs could be one of the reasons why it makes sense for Facebook and its subsidiaries to proceed with this approach. Apple has mandated seeking user permission for cross-platform ad tracking. However, there doesn't seem to be any restrictions on tracking user activity and supplying the collected data to advertisers on the same app.
On one hand, the new tools could integrate retail revenue, marketing, and community interaction under one roof for influencers while on the other hand, it could impact how much influencers earn through sale proceeds since Instagram would charge creators for the convenience and the tools. Since these tools are still in development, it isn't yet clear how Instagram will manage them when they debut.
