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The influencer business is booming.
According to a Goldman Sachs estimate, the industry is worth around $250 billion and could grow to $500 billion by 2027.
However, despite its success, many smaller creators say they feel pushed out by competition from bigger brands, algorithm changes, and the highs and lows of brand deals.
"The market may be expanding, but competition is fierce," Tachat Igityan, the CFO and founder at Destream, a payment platform for content creators, told Business Insider. "And the room for smaller players feels less than ever."
Micro-influencers, who have between 10,000 and 100,000 followers, are known for their authenticity and high engagement, which has attracted brands over the past few years.
As a result, they have become more expensive. That has caused brands to start gravitating back toward creators with a proven track record or to mainstream celebrities because they are seen as safer investments.
This has created a problem for the influencer middle class. Several have shared their thoughts on TikTok about wanting to give up content creation and go back to their day jobs.
Julia Montgomery, for example, told her 428,000 followers in May that she couldn't do it full time anymore, citing her mental health.
Marisa Kay, who has 44,000 followers, said she had decided to quit influencing after a year to take a corporate job.
Ruby Tufte, a content creator, told BI she started out on YouTube five years ago and then moved to TikTok, where she makes weight loss content for her 10,000 followers.
Tufte said she's seen some progress over the past year or so, but it has been difficult. She used to want to be a full-time influencer, but she doesn't anymore. Earlier this year, she posted a TikTok explaining that was no longer her goal, saying the pursuit was "draining."
"The algorithm, it gets really frustrating," Tufte told BI. "You have to feed it at the end of the day."
Dominic Smales, the founder and former CEO of the world's first digital talent management agency, Gleam Futures, who has just cofounded the new creator marketing venture GloMotion Studios, told BI he remembers in 2016 when content creators were a new kind of talent and being offered more six-figure deals.
Now, there are "so many more mouths to feed," he said.
Kim Murray, the founder of Virality Boost, an influencer content syndication network, told BI that the cost of Instagram posts and brand deals shot up between 2015 and 2018.
Then came the management companies and affiliate networks, which took their cut. This meant individual creators saw less of the money.
"The $250 billion influencer economy might sound huge, but it doesn't mean all influencers are raking it in," Murray said. "Only a few lucky ones land those million-dollar deals, while the rest are left without much to show for it."
Many are finding it hard to justify the effort, Murray added, as "even a $5,000 deal doesn't stretch far."
Audiences are also tired of the traditional influencer model and bored of being sold to.
"Audiences are more and more cynical because they have been sold to so often on social media now by their favorite creators," Smales said. "Brands and creators need to start entertaining again and not just selling."
Tufte hopes to earn a bit more income from TikTok now that she's over the 10,000-follower threshold for the creator program. Before that, she was in "the unpaid internship" stage, she said.
Tufte has always had a regular day job to support her content, though, and thinks she always will. She said she thinks this is the way most content creators will go.
Tufte sees using her platform as more of a means of marketing herself as a fitness coach — using her community to raise awareness of her services rather than relying on view counts or brand deals.
She also recommends that aspiring influencers not put all their eggs in one basket too soon. Anyone can get canceled, and the algorithms can switch up on you overnight.
"People can go from loving you to hating you," she said. "And if you're an LA influencer who is living above their means now, in the really nice high rise, your $4,000 rent is going to be barking up your door real quick."
