Creators like Kristen Bousquet are very frustrated. Bousquet, who has 24,000 Instagram followers, usually charges a minimum of $300 to create a single UGC video for a brand.
In January, she received an email from a brand offering her a deal to create UGC. She would get paid $500 for 30 short-form videos, or just under $17 per video.
"As a creator who has created high-quality content for brands for over five years, it's a slap in the face to get an offer that barely even covers the cost of lunch," she told Insider.
But it's a situation that veteran UGC creators have increasingly faced, as the space has surged in popularity thanks to the rise of short-form video on TikTok — with marketers investing in this type of advertising because of its authentic feel.
Because it's so easy to start pitching yourself as a UGC creator to brands, inexperienced new entrants have flooded the market, with some of them accepting very low fees.
A lack of education and experience in UGC is causing confusion
This steep growth has left brands and creators without a blueprint for payment structures, and generated a "free-for-all" on both sides, according to content marketer and creator Jayde Powell.
Chloë Gibbions, director of influencer-marketing agency Ours, said that much like in the early days of influencer marketing, brands are often just unaware. When they offer low rates, they underestimate the time and skill required to create content, and assume that high fees are only justified when creators have big audiences. On the creator's part, accepting low rates can depress the market.
As the UGC space grows, creators need present themselves as professionals and not be afraid to negotiate
The key for creators to build valuable relationships with brands is to rethink their role as freelance marketing professionals, rather than influencers.
When pitching their services to brands for the first time, creators should already have a portfolio of content to showcase, and ideally be able to prove that they can drive good ROI for brands.