Creators report extremely low earnings from TikTok’s ad revenue sharing initiative – Fortune
When TikTok approached Azure MacCannell in September she was ecstatic.
MacCannell had sold her Warwick, Rhode Island dog kennel business a few years earlier and relocated to Deerfield, New Hampshire to enroll her four kids in top public schools. With the idea of starting a home organizing business at some point, MacCannell began posting her organizational and cleaning hacks to social media. The videos, which features things like gutter scrubbing and fridge cleansing, went totally viral. Today MacCannell’s home hacks TikTok, @livecomposed, has over 713,000 followers and attracted 11 million views last month.
After relying on brand partnerships and her organizational consultancy to support her family, TikTok told MacCannell they’d begin to pay her for LiveComposed content. All she had to do was join Pulse, the company’s new program to share advertising revenue with top creators.
In the five months since then, MacCannell says she has earned $1.85 from TikTok Pulse.
“It’s grossly underpaid,” says MacCannell. “It would be great to get compensated.”
MacCannell is not alone in her experience with TikTok Pulse. In interviews Fortune conducted with seven TikTok influencers, all of whom had followings of at least 100,000, all shared confusion about their enrollment in the program and none reported earnings exceeding $5.
The company announced TikTok Pulse in May 2022 as its first ever advertising revenue share program with creators, public figures and publishers. Pulse competes with historically lucrative advertising revenue share programs that YouTube and Facebook have long used to lure creators with compensation.
Creators with at least 100,000 followers are eligible to opt-in to Pulse as part of the platform’s desire to make “creators feel valued and rewarded on TikTok,” the company said in its announcement. TikTok says that it splits ad revenue with Pulse creators down the middle, making it competitive with YouTube, which pays creators between 45% and 55% and Facebook at 55%.
By most accounts, TikTok has a lot of wealth to be shared. While TikTok-parent company ByteDance does not disclose TikTok’s finances, eMarketer reported in 2022 that the social media app generated over $11 billion in 2022 from its advertising business.
None of that money appears to be trickling down to creators yet, though.
“I have not seen any positive benefit or real difference in my life from Pulse,” says food creator Alexa Santos, who runs TikTok account @alexawhatsfordinner, which has 125,400 followers. Santos has not been in the Pulse program very long — she joined TikTok’s ad revenue program in December of 2022 — but so far she says she’s got little to show for it. “I don’t even know where to find out if I’m making money from it,” Santos says.
It’s not clear why the creators with whom Fortune spoke have received such paltry payouts, especially given that TikTok has positioned the videos in the Pulse program as its hottest content. The company has said that Pulse places ads next to the top 4% of the platform’s most engaging content across 12 categories, including food and fashion.
The videos which TikTok uses with its Pulse program are “definitely” the platform’s most premium ad option, says Nicole Penn, president of EGC Group, which runs social and marketing for brands like the Mayo Clinic and Canon. It’s “where a lot of people live; it’s where you get the magic algorithm that’s showing you the things you want to see,” Penn said.
For brands to get effective results from videos with such high engagement rates, budgets for a campaign should start at $500,000, Penn said.
Hilary Lemonick, who runs influencer marketing for Super Coffee, said she too was under the impression that Pulse is best suited for big brand campaigns. “When I did inquire about the programming and who may or may not be participating, TikTok said, to their knowledge, it’s mostly big industry leaders, like Pepsi,” Lemonick said.
Adding to the confusion, according to ECG Group’s Penn, is the fact that in December TikTok lowered the spend minimum for advertisers to participate in Pulse, allowing marketers to jump in with budgets of as low as $500.
That could suggest that TikTok wants more advertisers to participate in the Pulse program. But as Lemonick notes, a $500 budget will not go very far when paired with videos that rack up millions of views.
“I don’t know what the $500 minimum gets you,” Lemonick said. “It does seem confusing that the big guys are participating, but the barrier to entry is so low.”
A TikTok spokesperson declined to share additional details about the program, and said they could not confirm any pricing information, which they said “varies depending on the clients campaign and goals.”
The lackluster results of TikTok’s revenue share program are a marked, and surprising, contrast to the app’s position at the center of the social media universe. According to MMGuardian, TikTok is the number one app used by teens and preteens in the U.S. And with an estimated 834.2 million monthly users, the app has cut into the audiences of established social media hubs like Instagram and Snapchat.
But to maintain its momentum TikTok needs expert influencers to keep posting content on its platform. So far, it has struggled to give its creator class the kinds of direct payouts offered by its rivals. TikTok’s previous effort to sustain creators, the $1 billion Creator Fund launched in the summer of 2020, has been disappointing, some industry insiders say. Creators as big as MrBeast have reported mere cents for thousands of view counts.
Creators with whom Fortune spoke for this article reported a maximum of $1,000 monthly from the Creator Fund and a minimum of pennies. “I don’t even check it because I assume it’s going to be basically nothing,” says Santos.
Because Santos, MacCannell and the others Fortune interviewed can’t rely on payments from platforms like TikTok they rely on brand partnerships, consulting and cottage businesses that capitalize on their TikTok fandoms and creator expertises.
Other platforms are upping their game in the battle for creators. Beginning in February, YouTube will share ad revenue to creators on its Shorts content, mobile-first snackable video that looks just like TikTok. Creators, who have been traditionally well-compensated by YouTube, have met this announcement with excitement and skepticism. Facebook has also cut large checks to video creators (MacCannell says she made $75,000 from Facebook Video alone last year). Instagram is testing ad revenue sharing to creators this year, after it paid top Reels creators for the first time this year.
TikTok is also under pressure from regulators. Amid rising concerns about surveillance by the company’s Chinese ownership, this month the University of Texas and Auburn University banned students from using the app on campus wifi, following bans from government devices by New Jersey Gov. Phil Murphy (D), Texas Gov. Greg Abbott (R), and Utah Gov. Spencer Cox (R ). As this is happening, TikTok parent ByteDance reportedly cut hundreds of jobs from its Chinese operation.
As long as TikTok remains popular with young users, it may be able to weather the various challenges. For now, many creators remain hopeful that TikTok will compensate them for their contributions to the platform and help support their content-based careers. Sal Farzin started his creator career sharing “Amazon must-have” products, and uploading the videos to TikTok in July of 2020 under the handle @simplysalfinds. Now, with 2.8 million TikTok followers, just this month he decided to quit his advertising tech job and become a full-time creator. As a professional creator, he makes a majority of his money from affiliate marketing, but would love to share a more mutual relationship with the platform responsible for his livelihood.
So far, he’s made “merely a few bucks” from TikTok Pulse. “I haven’t seen a lot of traction as of yet, but I’m super pumped about it,” he says. “It’s been pretty underwhelming.”
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