Influencers have become an integral part of marketing for brands. But how exactly do these social media superstars make money? This comprehensive guide reveals the various monetization strategies influencers use to fund their lifestyles.
Monetization Strategy #1: Sponsorships
Sponsored content, also known as sponsorships, involve brands paying influencers to promote their products or services. According to an Influencer Marketing Hub survey, 89% of marketers say ROI from influencer marketing is comparable to or better than other marketing channels.
The average cost of a sponsored Instagram post is:
- Nano influencer (1k to 10k followers): $50 – $250
- Micro influencer (10k to 50k followers): $250 – $1,000
- Mid-tier influencer (50k to 500k followers): $1,000 – $5,000
- Macro influencer (500k to 1 million followers):$5,000 – $15,000
- Mega influencer (1M+ followers): $15,000+
But sponsored content isn‘t just about follower count. Engagement rates matter more. Micro influencers often have higher engagement.
According to SocialPubli, average engagement rates are:
- Nano influencers: 7.2%
- Micro influencers: 5.7%
- Mid-tier influencers: 3.6%
- Macro influencers: 3.4%
- Mega influencers: 1.7%
So how much will a 100k follower influencer with a 5% engagement rate earn? Around $2,500 per sponsored post.
Getting Sponsorships
The first step is…
Monetization Strategy #2: Affiliate Marketing
Affiliate marketing allows influencers to earn commissions by promoting products they truly love. Affiliate earnings can provide a consistent revenue stream versus one-off sponsorships.
According to Goat Affiliates, influencers earn on average $7.19 per click and $135.26 per sale. Actual commissions vary greatly depending on vertical and affiliate program. For example, influencers promoting products in the personal finance niche tend to earn higher commissions.
We‘ll cover the step-by-step process for becoming an affiliate marketer shortly.
Monetization Strategy #3: Ad Revenue
Platforms like YouTube, Facebook and Twitch allow creators to monetize their content through advertisements. However, to access these programs, you‘ll need to meet the eligibility requirements.
For example, to join the YouTube Partner Program you‘ll need:
- 1,000 subscribers
- 4,000 watch hours in the past 12 months
Once accepted, how much can you earn? While rates vary, display ads pay between $0.10 to $0.30 per view. YouTube takes 45% and pays creators 55% of ad revenue.
Increasing YouTube Ad Earnings
Posting consistently, creating mid-roll ads, and making longer videos can help maximize your YouTube ad revenue.
Let‘s move onto the next money-making strategy for influencers.
Monetization Strategy #4: Subscriptions
37% of YouTube channels with over 1 million subscribers have channel memberships activated. Memberships allow loyal fans to pay a monthly fee for exclusive content and perks.
YouTube pays creators 70% of membership revenue after fees. At the $4.99/month tier, that equates to about $3.50 per member.
Twitch subscriptions work similarly, with creators earning 50% of the $5 monthly fee. So around $2.50 per sub.
Now let‘s go over how to set up subscriptions…
Monetization Strategy #5: Merchandise
Creating and selling branded merchandise is a popular way influencers monetize their audience.
The type of merchandise sold depends greatly on the niche. For example:
- Gaming influencers: apparel, mouse pads, phone cases
- Craft influencers: printable art, pattern books, crafting tools
- Beauty influencers: makeup, skincare products, apparel
Profit margins vary based on product type and production costs. But generally merchandise nets influencers 35-50% profit.
Now let‘s explore the options for creating, selling and fulfilling orders.
Additional Money-Making Strategies
While less common, influencers supplement their income through avenues like:
Crowdfunding: Platforms like Patreon, Kickstarter and Indiegogo allow influencers to raise funds directly from their audience. Fans donate or pledge money in exchange for rewards.
Donations: Loyal followers occasionally donate money to their favorite influencer just to show support. Streamers on Twitch often receive donations during livestreams.
Own Products/Services: YouTube gamer Sean "JackSepticEye" McLoughlin earns big from his Top of the Morning Coffee brand. Selling your own physical or digital products can be extremely lucrative.
Getting Started with Influencer Monetization
Follow this 7-step checklist to start earning money as an influencer:
- Determine your niche & ideal audience
- Choose monetization strategies that align with your audience
- Produce quality content consistently
- Engage and build community with your followers
- Partner with brands that resonate with your followers
- Diversify income through multiple monetization avenues
- Track analytics to identify money-making content
Wrapping Up
As you can see, there are plenty of ways for influencers to leverage their audience and make big money. Combining various streams creates a diversified income strategy.
I hope this guide gave you clarity on how influencers get paid. Now grab your camera and start creating! Let me know in the comments if you have any other questions.
