In our last post, we looked at the history of emoticons, stickers, gifs, and avatars, and learned how they’ve become a form of nonverbal sign in digital conversations. In a new post, we’ll dive into what’s driving the sticker economy today and how companies are monetizing it.
How Big Is the Economy of Stickers, Emoji, and gifs?
- 92% of Internet users use emoji in their communications, according to Unicode, a consortium that provides global standards for text and emoji.
- One of the largest “conversational search” engines for gifs, Giphy, claims to have 700 million daily users and 10 billion pieces of content served to them.
- Line, popular in Asian regions, has revealed that it has sold 8.55 million sticker sets since the launch of the personalized stickers feature in March 2020, with users sending an average of 433 million stickers daily as of April 2019.
It seems that these little emotional icons, cute cats and dogs, memes, and movie quotes in GIF form really do appeal to people, don’t they? When it comes to the attention economy, there is no better way to monetize the time people spend in a messaging app than with stickers. They pay a lot of attention to these small but mighty pictures and companies pay a lot of money to buy that attention. This industry is highly lucrative, both for messenger apps, brands, and celebrities, as well as for content creators.
Estimating the revenue generated is not so easy, because big companies are reluctant to disclose where their income comes from. We asked the ubiquitous ChatGPT to give us information about the market valuation. Here’s what it said:
“According to a report by Grand View Research, the global market for stickers and emoticons was valued at $394.6 million in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 19.8% from 2020 to 2027. Another report by Technavio estimated that the global market for GIFs was valued at $474.3 million in 2019 and is expected to grow at a CAGR of 7% from 2020 to 2024.”
Well, it sounds plausible, but we couldn’t find any evidence of whether or not these estimates are accurate, nor any citations of these reports anywhere on the web.
Furthermore, in 2016, Line revealed that it had earned more than $270 million from stickers alone. Despite the fact that this happened three years earlier than in the reports mentioned above, it’s pretty unlikely that one app alone would contribute such an enormous portion of the global market, even if it does have a fairly large share. Then, what about Facebook, WhatsApp, Path, Snapchat, Apple, and others who are in the business, but you can tell how big the contribution of stickers to their revenue is? In 2016, when Apple introduced the App Store in iMessage, it has grown up to 1.650 applications in just one week after launch, which was more than the original Apple App Store in 2008. Most of these 1.650 applications, 1.251, to be exact, were sticker packs, and only 307 of them were free, while the rest were paid.
All in all, ChatGPT’s estimates seem to have marked down the sticker economy. In fact, it’s probably much more than the ~$400 million mentioned above. Moreover, companies like Meta and Snapchat are investing heavily in avatars, which can be considered as the upgraded version of stickers. They have a higher rate of personalization than stickers have, and when it comes to personalization, people are addicted. So this industry looks incredibly beneficial for them.
Now let’s take a look at the situation with gifs, which seem to be less sophisticated. According to Growjo, one of the largest GIF search engines, GIPHY, has an estimated annual revenue of $27.5 million. Its closest competitor, Tenor, reportedly makes $5.1 million annually, and Gfycat makes $9.5 million annually. These companies are the most profitable and well-known, although there are dozens of GIF keyboards that rely on their search technology.
The gif economy looks quite smaller than the sticker until you notice other applications that aren’t specifically focused on gifs but have tried to bring AI capabilities to personalize conservative GIF animation. The buzz around them came during the COVID-19 lockdown, in 2020-2021, as a way to entertain people and improve their online experience. Among other AI-powered features, these apps allow users to upload their own content and bring it to life by applying facial expressions and emotions to a given photo or video, or by animating static images. Reface, Avatarify, Pantomime.it, Deep Nostalgia have done a good job of bringing GIFs into the latest generation of technology, even if some have called gifs outdated and cringe.
How Companies Make Money with Stickers and Avatars
Stickers Store
There are many ways for companies to earn money from stickers and avatars. The first thing that comes to mind is selling stickers to users. Many apps offer them for free (WhatsApp) or for free in a limited period of time, while some messengers offer paid sticker packs (Line, Apple) along with free ones. On average, the cost can vary between $0.99 and $4.99. On Reddit, which introduced its own NFT avatar store last year, prices range from $9.99 up to $99.99.
In fact, Line is arguably the company that pioneered the sticker economy more than a decade ago. When stickers were first introduced to its users, they were designed in-house. In 2014, Line opened up the space for users to create their own stickers and make money from them. Since then, they have built a solid community of sticker creators whose dream is to become digital sticker millionaires, although today the sticker creation business may seem a bit saturated and currently too difficult for artists to enter and succeed. According to Rest of World, citing Line’s figures, the top 10 sticker creators earn $10 million on the platform, with a total number of 4 million designers creating stickers for Line.
Branded sticker packs are another way for messengers to monetize stickers. Messengers charge brands to integrate their content into a messaging ecosystem — the strategy that Line has used to implement in its sales to businesses. Being integrated right into users’ keyboards is a powerful PR tactic for brands that make people spread the word about them in a peer-to-peer way. L’Oreal has its Beaumoji to promote the brand and fashion trends, Dove launched its branded emoji to talk about stigmatized curly hair.
What’s more, brands do not necessarily have to spend a lot of money to push their branded sticker packs. In fact, some of them can make a fortune with branded emoji keyboards. That is if your brand is Kim Kardashian, who reportedly made $2.8 million selling her Kimoji branded stickers, or NBA star Stephen Curry, whose StephMoji beat out one of Kim’s to become the most popular paid app on the App Store in less than 24 hours.
Avatars and Virtual Goods
While the sticker business is primarily in the hands of the big companies, with independent studios and creators struggling to get their small piece of the pie, the avatar creation field seems to be more friendly for newcomers to boost their business. There are few startups with relatively high valuations that allow users to build their digital selves and help developers to integrate avatar tools into their platforms. Some of them are attractive property for tech giants — Alter, for example, which was acquired by Google for $100 million, while another, Genie, which got a $1 billion valuation during its $150 million round, remains independent (so far).
When an individual duplicates themselves to represent in the digital world, they need to transfer some of their must-have things from reality to feel comfortable. And this is also a good way for companies to make money. They basically offer virtual items through stickers and avatars stores.
In fact, the sticker and avatar industry has become a big driver of digital fashion. It has started to evolve with improving AR technology and NFT auctions — laying the foundation for the so-called “direct-to-avatar” economy, which also reflects the currently popular sustainability and responsible consumption trends.
These services help designers and fashion brands promote themselves. At the same time, users can customize their virtual doppelgangers to be as close to their physical identities as possible — copying not only their hairstyles and skin tones, but also the sneaker brands they like to wear, T-shirts, accessories, makeup, and even tattoos that can be placed on the avatar’s body are under discussion.
Bitmoji, the sticker app acquired by Snapchat, offered an exclusive virtual clothing deal in partnership with Adidas. For 250 Snap Tokens, users could purchase an Adidas track jacket. There are many other brands featured on the Bitmoji app that offer their looks for free — you can dress your avatar in Ralph Lauren, The North Face, Adidas, American Eagle, and whatever else you can find in the Bitmoji Fashion section.
Another company founded in 2020, DressX, is a startup that partners with both digital and physical designers and fashion brands to provide digital clothing. They build digital closet options for the game development platform Roblox, Meta Avatars Store, and soon — Snapchat. The company has just raised $15 million and has more than 3.500 items available on its platform.
This segment has become a whole new ball game for thousands of brands, designers, creators — and startups that are eager to bring them all together and help them to settle into the metaverse.
Merchandising Sales
Thanks to Line too, stickers became a cult. Stickers characters, inspired by anime, cartoons, comics, or uniquely created for the platform, moved from the messenger to the real world. There, they continue to produce profit for the companies that spread them. Line Friends, official stores of merchandise Line’s sticker characters, had a revenue of $180 million (19.9 billion Japanese yen) in 2020, according to Statista. Snap also makes money selling a line of merchandise through Zazzle on the Bitmoji app.
The most important steps in the sticker economy seem to have happened in the past. From the launch of Line stickers, which drove the clockwork, to the introduction of the iMessage App Store, — most of the events mentioned here took place in the 2010s. Since we don’t know exactly how much money is rolling around in this business, we can’t say for sure whether it’s growing or plateaued. However, it appears that the industry is waiting for metaverses to blossom. There won’t be a better time for digital fashion and other aspects of our physical lives to enter the digital world to enrich our avatars with all the things that we love in reality.
Bonus. Map of The Economics of Emoji, Stickers, GIFs, and Avatars
We’ve mapped over 100 organizations, apps, brands, and individuals that are driving “stickernomics” today: from the nonprofits Unicode and Emojipedia, tech giants like Meta, Apple, and Snap, to bold startups like Genies and Hologram. Download the map via the link.
