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Getting to grips with TikTok and the creator economy

October 7, 2021, 9:55 AM UTC

Good morning.

Facebook’s troubles have been driving the news this week, but Facebook is so, well, yesterday. Sorry boomers, but if you want to know where money is moving these days, you need to get on TikTok. 

As Jeffrey O’Brien explains in a story released this morning, this brain candy buffet of brief homemade videos has been the most downloaded app for two years running now, claiming more than 1 billion active global users. And brands are taking notice. TikTok says the number of companies advertising on its platform jumped 500% last year during the pandemic. Top creators can earn tens of thousands of dollars for a single sponsored post, and brands see a quick payoff in sales. Seth Kean, CEO of ROI Influencer, told O’Brien that TikTok drives $7.2 million in sales over 90 days for every million dollars spent, outperforming the next best performer, Instagram, with $6.6 million in sales, as well as Facebook, Twitter and YouTube.

How does it work? O’Brien details some of the success stories—like #fetapasta, a series of feta cheese recipes launched by a Finnish chef; or #BamaRush, featuring University of Alabama sorority sisters detailing their party outfits; or Carly Joy’s profanity-laden how-to video on grooming her lady parts with her preferred shaving cream. This may not be your thing. But it is a thing—and an increasingly big one.

You can read O’Brien’s smart and entertaining piece this morning, here. Then when you are done, spend some time exploring Fortune’s newest list, The Creator 25, which celebrates the most successful TikTokers, Instagram Influencers, independent newsletter writers and podcasters that you need to know about. (Sadly, Leadership Next didn’t make the cut.) The list ranges from the cerebral—Ben Thompson, who writes the clever Stratechery Daily—to the physical—Yoga with Adriene, which has 10.3 million subscribers on YouTube—to the profitable—Humphrey Yang, who has managed to snag 23 million followers with snappy and savvy financial tips. If you don’t really understand what the creator economy is all about, it’s time to learn. Go here this morning for a delightful education. I promise, you won’t regret it.

More news below.

Alan Murray
@alansmurray

alan.murray@fortune.com

TOP NEWS

Malaria vaccine

The first malaria vaccine, developed by GlaxoSmithKline and its partners, is going to be rolled out to children in sub-Saharan Africa and other at-risk regions. The WHO has given its approval, so now comes the funding stage and national strategic decisions. The vaccine only prevents around four in 10 cases, but given how widespread and deadly malaria infections are, it will still probably save hundreds of thousands of lives. Fortune

Facebook fallout

Facebook whistleblower Frances Haugen has been chatting with European legislators, and there's every sign that her testimony will bolster new bills that already represent a big crackdown on Big Tech. Meanwhile, given the storm it's in, Facebook has decided to delay the rollout of new products so it can conduct "reputational reviews" of their potential impact and reception. New York Times

IAC and Meredith

Barry Diller's IAC/InterActiveCorp is shelling out $2.7 billion for Meredith's magazine operations, which boast titles such as People and Better Homes & Gardens. IAC is bulking up again after slimming down for a couple years. Meredith was briefly Fortune's owner in 2018. Fortune

Macy's suggestion

Activist investors have suggested spinning off Macy's e-commerce business from its stores. Jana Partners reckons the online business is worth around twice as much ($14 billion) as the combined operation. But, as Fortune's Phil Wahba points out, "Macy's e-commerce success is very much fueled by its stores, which provide it with a network of additional points of distribution and customer service, not to mention serving as a key instrument for brand building." Fortune

AROUND THE WATER COOLER

Bitcoin decoupling

Bitcoin is no longer moving alongside stocks; while the S&P 500 is down around 5% from recent highs, the leading cryptocurrency is up 10%. This will be a boost to those who see Bitcoin as a hedge against equities, but let no-one forget how volatile and unpredictable the coin is. Fortune

Vaccine incentives

Bank of America is giving $200 to Merrill Lynch Wealth Management branch employees who get the jab and come back to work. Other approaches to vaccine incentivization include $200 surcharges on health insurance (Delta) and straight vaccine mandates (Microsoft, United Airlines). Fortune

Debt ceiling

Here's Fortune's Nicole Goodkind explains the debt-ceiling conundrum, and the deal being offered to the Democrats by Senate Minority Leader Mitch McConnell: "The plan would allow Democrats to forego the arduous and timely reconciliation process to raise the debt ceiling without Republican help, but may also spark controversy within a Democratic party already divided on Biden’s proposed $3.5 trillion infrastructure package. Progressive and centrist Democrats will need to come together to approve a very specific amount, which will certainly take some negotiation." Fortune

Riveting Rivian

Here's an interesting piece about electric-vehicle maker Rivian, which is trying to target consumers while currently leaning extremely heavily on its business making delivery vans for Amazon: "On Friday, Rivian shared new details of the Amazon deal in a filing with the U.S. Securities and Exchange Commission, revealing how closely its fate is tied to one of its biggest benefactors. The e-commerce giant will have exclusive rights to Rivian’s delivery vehicles for four years after receiving its first one, and it gets right of first refusal to buy the vans for two years after that." Fortune

This edition of CEO Daily was edited by David Meyer.

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