Creator Economy
By Isabelle Sarraf Hello!
So much for the burst of good tidings about the ad market from Meta Platforms' first quarter results. Snap results, out Thursday, took up the baton that YouTube's drooping ad sales left off. Snap told investors that the advertising slump that hammered first-quarter results would extend into the second quarter. Pinterest, meanwhile, forecast a second quarter gain in revenue—but not at the double-digit rate that larger Meta expects.
Here's what stood out from both companies:
Snap's first-quarter revenue fell 7% year-over-year to $989 million, as it continued to reel from a sluggish economy and Apple's mobile operating-system changes, which forced Snap and other consumer internet companies to develop new ways to track how well ads perform. Snap forecast second quarter revenue would drop 6%.
"The changes we made to our ad platform were disruptive," CEO Evan Spiegel said on a call with investors. "There are a small amount of our top advertisers that have not recovered."
Snap also said some of the annualized $84 million in savings it's made over the last two quarters from shutting down its Snap Originals and other fixed content costs, like games, has been offsetting costs from its program to share advertising revenue with creators. That revenue sharing could start to pressure margins in the second half, Spiegel said.
Snap executives were keen to highlight non-ad revenues. Snapchat+, the company's $3.99 a month subscription service, now has 3 million paid subscribers—one million more than it had just three months ago. Nonetheless, Snap stock dove 18% after hours.
Pinterest's first quarter revenue, at $603 million, rose 5% compared to the same period a year ago, in line with the company's forecast it would increase in the "low single digits." The digital scrapbooking site forecast it would maintain about the same growth rate in the second quarter. That's a contrast with Meta, which predicted revenue could increase as much as 11% in the June quarter. Pinterest's stock fell 14% after hours.
Pinterest coupled that disappointment with a partnership, however. The company's new deal with Amazon, which will roll out later this year, will allow brands advertising via Amazon's ad network to host their ads on Pinterest. Pinterest users will be able to click links in the app that directs them to the e-commerce site to finish their purchase.
Here's what else is going on…
See The Information's Creator Economy Database for an exclusive list of private companies and their investors.
Meta Platforms is phasing out purchases on Facebook and Instagram that aren't completed directly in-app, meaning digital storefronts that direct users to an e-commerce site to complete their purchase will no longer be accessible, the company announced on Thursday.
YouTube contract staff in Texas who work on content operations for YouTube Music unanimously voted in favor of unionizing on Wednesday, joining the Alphabet Workers Union. The move could force YouTube parent company Alphabet to collectively bargain with its U.S. workers for the first time.
Separately, YouTube is sending more than a dozen creators to the 2023 NFL Draft this weekend in Kansas City, Mo., including five-member group Dude Perfect and YouTuber Ryan Trahan, according to Variety. The company recently inked a deal to offer NFL Sunday Ticket on YouTube TV and its Primetime Channels hub starting this fall.
Clubhouse is laying off more than 50% of its employees, hitting the reset button after over-hiring during the pandemic, founders Paul Davison and Rohan Seth said in a memo to staff. "We arrived at this conclusion reluctantly, as we have years of runway remaining and do not feel immediate pressure to reduce costs," Davison and Seth said. "But we believe that a smaller team will give us focus and speed, and help us launch the next evolution of the product."
Buzzfeed is increasing the amount of content it produces from independent content creators, launching a residency as part of its broader creator program to cross-post content on its channels, according to Axios. The company last week announced organizational changes, including the shuttering of Buzzfeed News, which included plans to outsource more of its content to creators and artificial intelligence.
LTK is investing $2 million into brands that use its influencer marketing platform, LTK Connect, for creator-guided shopping ahead of Small Business Week, the company announced on Thursday.
Fireside, the Mark Cuban-backed streaming app for creators to host virtual live shows, raised a $25 million Series A round led by investors that include Paris Hilton. The company is now valued at $138 million, according to TechCrunch.
Posh, a New York-based event management and ticketing platform, raised $5 million in seed funding led by Companyon Ventures and Epic Ventures.
Rtro, a new social group chat app created by executives from marketing firm TH Experiential, is expected to launch in the Apple App Store this week, according to Glossy. The app, which targets Gen Z users, aims to avoid the type of feed popularized by TikTok, which surfaces recommendations based on users' past activity. Brands and influencers can create public channels in the app, where they send out content to followers in the format of a direct message.
Viral Nation, a talent representation and influencer marketing firm, announced a partnership deal on Wednesday with Sunny Skye Productions, the production company led by "Jackass" producer Trip Taylor. The deal includes the production and development of original content headlined by Viral Nation's slate of digital creators and athletes.
Walter Gilbert is now leading Twitter's people team, he told employees Thursday morning. Previously, Gilbert spent five years at Reddit, along with a two-year stint at another Elon Musk-owned company, SpaceX, according to his LinkedIn. Gilbert told employees that he hopes to be a "more consistent presence" on the people team, which has cycled through directors since Musk's takeover last October. —Erin Woo
Jim Squires is joining Reddit as an executive vice president for business marketing and growth, he announced in a Wednesday LinkedIn post. He previously worked at Meta Platforms, where he most recently served as vice president for product marketing on Instagram and Facebook.
Mina Lefevre was laid off from Meta Platforms, where she served as head of development and programming, as the parent company ends original content produced for Facebook Watch, the social network's video on-demand service, Deadline first reported.
• With Its U.S. Future in Doubt, TikTok Shop is Thriving in Indonesia (Rest of World)
• Why Are People Reading Obituaries on YouTube? (Marketing Brew)
• Too Twee or Not Too Twee: Meet the People Behind the Wes Anderson TikTok Trend (Rolling Stone)
• Podcast: Gen Z's Dream Job in the Influencer Industry (NPR's Planet Money)
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Kaya Yurieff brings you everything you need to know about the booming creator economy, from the platforms to the people to the deals.
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Isabelle Sarraf is an editorial fellow at The Information based in New York City. Contact her at isabelle@theinformation.com or follow her on Twitter at @isabellesarraf.
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