If you spend any time on Instagram, you’ve likely seen at least one influencer promoting a product of some sort. If the glowing recommendation and branded tags and hashtags didn’t give it away, the “#ad” or “#spon” likely did. In fact, it sometimes seems that the entirety of “Bachelor Nation” live off of their influencer incomes. Is that really possible, though? How much can someone really make off an Instagram post about Flat Tummy Tea?
Influencers can have several revenue streams
Perhaps the most visible way that influencers make money is through sponsored posts; but while that may be the most common revenue source, it’s not the only one. Ashley Hajjar, director of influencer marketing at Rakuten Marketing said influencers also make money through affiliate partnerships (in which they’ll link to products in their posts or stories — like those “Swipe Up” links on Instagram — and earn a commission when followers click through and make a purchase), traditional banner advertising on blogs and potentially even in-person appearances. “Larger, high-tier influencers do have opportunities for speaking engagements and in-store appearances,” she said.
Mathew Micheli, co-founder and managing partner of Viral Nation, said influencers can also make money off of YouTube and Facebook ad revenue, as well as selling their own merchandise.
And, Hajjar added, they can take their talents to another medium. “Some influencers will start their own podcasts and utilize sponsors of the podcast to drive additional revenue as well as familiarize their readers with themselves,” she said. “The more engaged an audience is, the better the results for the influencer.”
The pay range is vast and determined by many factors
“The range of payments is so wide these days,” Micheli said. “I’ve personally done deals for hundreds of dollars and hundreds of thousands.” Hajjar noted the rates for a single sponsored post can run from $50 to more than $50,000, “depending on the level of influencer.” Indeed, according to Hopper HQ’s 2018 Instagram Rich List, mega-stars like Selena Gomez and Kylie Jenner pull in $800,000 and $1,000,000 per post, respectively (they both have more than 100 million followers), while those with the smallest following on the list (a mere one million) charge $1,300 to $3,000 per post.
In general, experts estimate the average is $1,000 per 100,000 followers, or one cent per follower, according to Later; but the cost an influencer can command depends on a variety of factors. “The variables for rates to consider for an influencer include quality of content from the influencer, an influencer’s following on their blog and social channels, an influencer’s engagement metrics, the number of deliverables, the allotted time frame and the agreed upon usage rights,” Hajjar said. For example, an influencer may be able to negotiate an increased rate if they agree to exclusivity (not working with a brand’s competitors) or a deal that allows the brand to use their images and content in other avenues, like TV commercials or billboards, Hajjar noted.
Follower count isn’t everything
While standard rates are typically discussed in terms of follower count, a massive following isn’t necessarily the holy grail for brands. Metrics like engagement — getting followers to take actions like commenting and clicking links or making purchases — are also extremely valuable to brands; as is an authentic voice. “An influencer must understand their audience and put out content that is interesting and engaging,” Hajjar said. “[They] must be excited about their content and their posts must be real, authentic and honest. They need to have their own voice [and post] consistently because with such a large number of influencers on social media, they will need to find something that sets them apart.”
And they don’t need to wait until they have 50,000 followers to start monetizing. “An influencer can begin monetizing from the moment they have one follower,” Hajjar said, explaining that many advertisers have public affiliate programs that allow anyone to partner with them and drive affiliate sales. And when it comes to brand sponsorships, both Hajjar and Micheli said micro-influencers — who could have anywhere from 1,000 to 10,000 followers, according to influencer marketing platform IZEA — can also be very attractive to brands. “Internally, we always look at how many people does this person actually influence, not how many followers they have,” Micheli said. “A lot of influencers have tons of followers [but] produce minimum results and low engagement.”
Meanwhile, “an influencer with 500 followers could be more successful in driving sales than an influencer with 10,000 followers,” Hajjar said. And “a smaller following does not necessarily equal smaller performance. In fact, often the opposite is true. When micro-influencers are extremely engaged with their audiences, they tend to be able to drive significant performance for advertisers.”
It’s not necessarily easy money
Being a social media influencer can certainly seem like a charmed life, but there’s almost always a lot more going on behind the scenes than what we see on an Instagram feed. As USA Today reported, many influencers work longer hours than they did in their previous full-time jobs, and spend huge portions of their days interacting with followers and building engagement on social media.
And then there are the legal requirements. The influencer career is relatively new, so the rules may not always have been very cut and dry — but in recent years, the Federal Trade Commission (FTC) has been cracking down on influencers who don’t properly disclose paid partnerships. “Influencers must be transparent about their relationship with the advertiser and include in their posts the proper disclosures as required by law,” Hajjar said, referring to the FTC’s Endorsement Guides. The guides are extensive and include a variety of requirements based on endorsement type. And if influencers don’t properly abide by the rules, it can cost them big-time in the form of fines (per the FTC, a single violation could lead to a penalty of up to $40,654) and lawsuits (like the one celebrities like Kendall Jenner and Bella Hadid are embroiled in relating to the infamous Fyre Festival).
Ultimately, influencers may have the ability to rake in the dough — but it’s not exactly the “get rich quick” path so many are often looking for.