Facebook, Instagram to Invest US$1 Billion in Content CreatorsBy Andrea Villar | Wed, 07/14/2021 - 14:27
Facebook's bid to attract users who create content is getting stronger as competing platforms, such as TikTok and YouTube, close in. The social media giant plans to pay out US$1 billion through the end of 2022 to content creators for Facebook and Instagram, CEO Mark Zuckerberg announced on Wednesday. “We want to build the best platforms for millions of creators to make a living,” Zuckerberg wrote in a Facebook post. “Investing in creators is not new for us, but I am excited to expand this work over time.”
The California-based company will distribute funds to content creators through shared advertising revenue and bonuses for time spent on Facebook and Instagram. Additionally, Facebook will, in some cases, offer seed funding to some creators who want to establish a presence on these sites. The ‘Summer Reel Bonus’ is among the upcoming bonus programs that will launch in the coming weeks and will pay US users who create high-quality Reel content for Instagram, a feature released last year in an effort to compete with TikTok.
For Facebook and its competitors, keeping content creators on their platforms is important to attract more users, wrote Forbes Senior Editor Abram Brown. “And without those users logging on, Facebook cannot sell the advertisements that do represent the company’s lifeblood,” he added. The company's booming advertising business drove revenues up sharply in 1Q2021, a result it said was driven by the ongoing 2020 trend of people spending more time and money online, causing advertisers to redirect their resources to seize on that behavioral shift.
The platform's advertising revenue rose 46 percent in 1Q2021 year-on-year to US$25.4 billion, while the company's profit nearly doubled to US$9.5 billion. Earlier this year, Facebook shared it has 8 million advertisers, of which the highest-spending 100 brands accounted for US$4.2 billion in the company’s advertising in 2020, revealed data from marketing research firm Pathmatics.
In late June, Facebook announced it was going to start testing in-head virtual reality advertising with its Oculus Quest 2 headset to eventually make that business self-sufficient. But it did not turn out as expected. After receiving a wave of negative feedback from its users, the popular Blaston game where the first trial was conducted said it would no longer be part of the test. “After listening to player feedback, we realize that Blaston is not the best fit for this type of advertising test,” Blaton’s Developer Resolution Games said on Twitter.