Influencers and digital creators: one of the hottest topics in the marketing world over the last year, and it's pretty apparent to see why. With the industry expected to be worth $13.8 billion in 2021, the digital creator space is one of the fastest growing marketing channels and shows no signs of slowing down soon.
With the momentum of scaling digital creator programs building by the day, many brands struggle to keep pace with the rapid growth and the growing pains that come with it. From building an influencer program to sourcing creators, brands have to think quickly and strategically about the best ways to optimize their team's time and resources to achieve the best return on investment.
However, a major challenge brands face as they scale their digital creator programs is actually paying creators for their work. Brands need to collect creator W9s, issue 1099s, walk vendors through a complicated onboarding process, collect creator PII.. the list goes on. And the more creators a brand works with, the more difficult it is for a brand's accounting and marketing team to manage creator payments.
In a survey conducted by Lumanu and Collectively, more than 50% of creators said that invoicing, chasing down payments, taxes, and getting paid on time is one of the most challenging and frustrating parts of running their businesses. Complicated payment processes distract digital creators from creating content and are a significant time suck for a brand's accounting and marketing team.
*Survey was completed by 400 creators in an annual survey conducted by Lumanu and Collectively, Inc.
Many brands are hesitant to change their current patchwork payment process, no matter how complicated and time-consuming it may be for the brand and the vendors with whom they work. They've put a lot of work into putting together a payments process that works for them, and it would be too much work to change now. Many brands take an "it's a mess, but it's our mess" attitude. But what happens when a brand grows and needs to pay dozens or hundreds of creators and vendors? Something has to change to spare employee time and headcount.
Streamlining Your Payment Process
For those brands that are hesitant to change and optimize their payments process, or those that are getting ready to scale their partnerships with digital creators, let's dive into why it's important for brands to automate their payment processes.
Many brands choose to pay creators manually, but manual processes are tedious and prone to errors both on the creator and the brand side of the equation.
Before a creator can get paid, intricate vendor onboarding processes require things like online payable account creation, collecting PII, tax form filing, and an unknown timeline for procurement approval. Repeating this process for dozens to hundreds of new creator partnerships monthly adds immense stress to the already bogged down workload of any accounting department.
In addition, digital creators may not always be privy to the business management knowledge for creating and sending invoices. Missing PO numbers, incorrect payment amounts, or mismatched due dates only further complicates the payment process- and can add days or weeks to the process of getting creators paid.
By choosing a payments solution with a single vendor set up and automated workflows for creators, finance departments can spend their time focusing on more impactful work and strategy that increases the company's bottom line. Using a payments platform that is structured as a Third Party Settlement Organization (TPSO) also eliminates the need for accounting teams to manage tax paperwork for their vendors, saving countless hours or days of work and headaches for any accounting team.
Improved relationships with creators
As was mentioned earlier, one of the biggest challenges many creators face during their collaborations is regarding getting paid. Inefficient payment processes that leave the creators waiting for their money or jumping through hoops stand to damage what could be a prosperous relationship. Creators may even opt to work with brands who tailor the payment processes to address their unique challenges.
Brands invested in working with digital creators must recognize all of the areas where they can improve and implement scalable and simple processes that will lead to success. As a brand scales its digital creator partnership program, it's important to recognize the time and money saved when moving over to an automated payment process.
Lumanu builds technology that makes doing business in the Creator Economy easy, collaborative, and fun. With Lumanu, creators can easily manage, protect, and grow their business, send/receive money instantly while collaborating with brands and other creators, and benefit from a community that's built to support them in every step of their journey. Lumanu takes care of business, so creators have the freedom to create, entertain, and inspire.