Performance-Only UGC Pay Isn't Creator Empowerment

Performance-based UGC sounds creator-friendly: no upfront pay, a cut of sales or ad spend, real upside. Run performance-only, though, it's how brands get creative made for free. The creator pays to shoot, the brand decides whether to spend, and if it doesn't, the creator gets nothing. Upside is good. Calling that arrangement empowerment is the problem.

Why "invest in your creators" became DTC's favorite line

"Invest in your creators" has become the best marketing line in DTC. It's also how brands get their creative made for free.

Comfrt is the case study everyone copies. It's heading toward a $1B year, with 600,000+ affiliates and a core group of about 500 creators. Most of them get no upfront pay. They earn a percentage of sales or a percentage of the ad spend behind their videos. Hudson Leogrande says his best creators could make $2M a year.

It's a great story. Platforms like Trybe offer software for what they call "performance-based UGC." What I want to look at is what happens when a brand runs that model performance-only, with no guaranteed pay at all.

How performance-only creator pay works

1. The creator pays to shoot the video.
2. The brand approves it.
3. The brand decides whether to spend on it.
4. If it doesn't, the creator gets nothing.

Read that again from the creator's side. You don't get paid for your performance. You get paid if someone else decides to spend money on you.

A media buyer you'll never talk to controls your income. They might pause your video because the budget moved to a new product, because a different hook tested better that week, or because they never got to it. None of that is about the quality of your work, and all of it decides whether you get paid.

Every approved video is a free option for the brand

In finance terms, every approved video is a free option the brand never has to exercise. The brand holds the right to use the creative. It carries none of the cost of making it.

Scale that up. Hundreds of creators shoot unpaid test creative so the brand can find its three winners. The winners get the podcast shoutouts. Everyone else is unpaid R&D.

For the brand, the math is excellent. Creative testing is one of the most expensive parts of running creators as paid social, and this model moves that cost onto the people with the least leverage to push back.

The language doesn't match the deal

Then the same people get on stage and say:

• "Develop your creators."
• "Give them the most ways to make money."
• "It's all about the relationship."

In most jobs, the relationship starts with a paycheck.

That's my issue. I'm not against performance pay. Upside for great creators is good, and flat UGC rates were already collapsing before any of this. What I don't love is performance-only pay dressed up as creator empowerment.

What a fair creator pay model looks like

If the relationship is real, it should start the way other working relationships do. Here's what I'd want to see from a brand that says it invests in creators:

• Pay for approved work. If you approved the video, you decided it was good enough to use. That decision should come with something guaranteed, even if it's modest.
• Keep the upside on top. A percentage of sales or of the spend behind a video is a great way to reward the small group of creators who drive results. It works best as a bonus, not the whole paycheck.
• Be clear about who decides spend. Tell creators how videos get picked for spend and what happens to the ones that don't.
• Say what it is. If a program is performance-only, call it that. Creators can make an informed choice. The problem starts when it's sold as empowerment.

None of this kills the upside story. The creator who could make $2M a year can still make it. The difference is that the hundreds of people who help the brand find its winners aren't doing it for free.

Does performance-only creator pay last?

The bigger question is whether this lasts.

Right now brands have plenty of creators willing to shoot on spec. Flat rates were falling anyway, and a shot at a big percentage looks better than a shrinking fee. So the supply is there today.

But every model that relies on unpaid R&D depends on people continuing to volunteer for it. The open question is what happens when creators run the numbers on how many of their approved videos ever got spend. Do the good ones keep shooting unpaid tests, or do they start picking brands that pay for the work?

I don't know how it plays out. I do know where I land. Upside for great creators is good. Performance-only pay isn't empowerment.