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Why Instagram's Reels doesn't need to steal TikTok's creators to be successful

Why Instagram's Reels doesn't need to steal TikTok's creators to be successful

Amanda Perelli

Hi, this is Amanda Perelli and welcome back to Insider Influencers, our weekly rundown on the influencer and creator economy. Sign up for the newsletter here.

Instagram rolled out its new short-form video feature Reels this month, and both influencers and marketers have begun testing out the TikTok look-alike.

Dan Whateley, Sydney Bradley, and I spoke with creators, marketers, and brands to understand how the influencer industry is reacting to the launch.

The verdict: Even though Reels has been called a "dud" by some (including The New York Times), and many TikTok creators aren't impressed with the product, it could still be a big business opportunity for influencers who primarily use Instagram.

Some influencer industry insiders we spoke with said that thinking about Reels as a "TikTok replacement" was missing the point.

Reels doesn't necessarily need to steal TikTok creators to be successful. It just has to appeal to Instagram-first creators and become a worthwhile (and money-making) feature for them to use — similar to how the Snapchat-copying "Stories" format worked starting in 2016. Snapchat is still around, but Stories have become a central part of Instagram and surpassed Snapchat in usage.

"Brands are really comfortable with the Instagram platform," said Dave Rosner, the EVP and head of marketing at talent management and entertainment studio Collab Inc. "I think when you look at the launch of new social platforms, which is happening on a fairly regular basis it feels like these days, the fact that brands don't have to do the research and understand that this is a platform that they've already worked with is a big positive for Reels."

In general, Instagram-first creators said they found Reels to be promising. And some brands are already including the feature in their campaign asks.

Read our full Reels analysis here.

Reels could drive $2.5 billion in yearly ad revenue by 2022

Jefferies analysts estimated that Instagram Reels could add $2.5 billion in yearly incremental ad revenue for Facebook by 2022.

Sydney broke down the key takeaways from the Jefferies report for advertisers and creators.

The Jefferies analysts used survey responses from over 800 respondents (ages 13 and up) and other data to look at early trends in usage, engagement, and user feedback for Reels.

As of August, 32% of the Instagram users surveyed said they were using Reels.

One takeaway was that if Reels follows the lead of Instagram Stories, it could become a major ad driver: The Snapchat-copying Instagram Stories feature became the company's "largest driver of ad impression growth" within three years of launch, with over 3 million advertisers using the feature.

A fashion Instagram influencer says her CBD brand saved her career during the pandemic

Courtney Trop is a fashion influencer with over 340,000 followers on Instagram (@alwaysjudging) and in March she launched her first brand, Hi Stevie, which sells CBD and plans on releasing other cannabis products.

Sydney spoke with Trop about how she pivoted this year from working mostly with other brands on sponsorships to working on her own brand.

When the pandemic forced many brands to cut their influencer budgets this spring, Trop saw her fast-growing career suddenly come to a halt.

"This has been my saving grace financially," Trop said, adding that Hi Stevie is now her main focus as an entrepreneur and creative.

This new brand now makes up 50% of her income, she said.

How much money TikTok influencers are getting paid from its $1 billion Creator Fund

TikTok recently opened up applications for its Creator Fund, a new multiyear $1 billion program designed to compensate creators for posting on its app.

The company's move to pay its users directly could help TikTok better compete with platforms like YouTube and Instagram. But Dan spoke with creators who said initial payments from TikTok's fund have been underwhelming.

Three creators who qualified for the program told Business Insider that they're earning just a few dollars a day after posting videos that generated tens of thousands of views.

Between August 18 and 22, Victory Rhyder, a TikToker with about 70,000 followers, earned an average of $2.89 per day through the Creator Fund, amounting to roughly $0.04 for every 1,000 video views generated during that period, according to screenshots of the creator's analytics dashboard viewed by Business Insider.

Read the full story on TikTok influencer earnings, here.