OnlyFunds Investment Adviser Staff
How Influencers Make Money and How to Get Started
Updated: Jul 10, 2022
If you’ve seen those sponsored posts with #paidad, the thought has probably crossed your mind – what would it take to start earning some money from my accounts? In this article, we will take a closer look at how much Instagram and TikTok influencers make, and what it takes to get there.
Who's paying all these content creators?
According to influencer management platform Traackr, 72 percent of major brands say they are paying a huge chunk of their marketing budgets to influencers — people with a strong relationship to an audience who can heavily sway decisions like purchasing habits. Fashion bloggers and gym instructors - Tik Tok dance creators and sketch artists - and everything in between, they believe, are the best way to reach out with advertising. They have a more personal connection with their audience than a magazine page ever could, and so will be able to sway customers more easily.
The influencer space, which used to be a hobby or side hustle for some YouTubers, has turned into a real career path. The industry has changed a ton over the years, whether it was from the huge shock of legal requirements that influencers must now explicitly say when they’re being paid, or the rise of buying fake followers.
Global Instagram influencer marketing spend, currently $7 billion, reached $8.080 billion in 2020. The number of brand-sponsored influencer posts on Instagram, currently 4.95 million, is expected to reach 6.12 million by 2020. It may feel like its too late to get in the game, but According to forecasts, 67.9% of US marketers from companies with 100 or more employees will use influencer marketing in 2021, up from 62.3% last year. In 2022, that figure will rise to 72.5%. The market just keeps growing.
In addition to sponsored posts from brands looking to get their name out there, you can get paid for affiliate marketing: selling someone else's product and taking a cut. Affiliates make money through a trackable link or a promo code to make sure that you know exactly which sales came directly from your posts.
So... how much can they get paid?
The amount that social media content creators earn depends on the number of followers, type of post, specific niche and the sponsoring company’s budget. Tools like this influencer survey can show you how much you can expect to be paid on different platforms and follower counts.
For example, with 100-150k followers on Instagram, the average influencer charges between $500 and $1,000 per sponsored post. Sometimes the cost of the post also comes with receiving something else in return, like a free press trip. Making 120 sponsored posts each year could net you $100,000 - better than a desk job!
According to similar research, it's kind of an unspoken rule that influencers can expect to be paid $10.00 for every 1,000 followers they have, once they hit the 100,000. Charging for posts before hitting this may result in getting paid less, or settling before the account has fully bloomed.
On the affiliate marketing front, influencers get paid a percentage of the sales. This rate can vary depending on the individual brand, but typically ranges between 10%-20%. In some cases, the marketer can get up to a 40% cut!
How to Get Started
If you’re interested in building a business on Instagram or TikTok, there are a few key principles you should follow. Here are some tips:
Treat it Like a Business
Treat your social media hustle like a real job, even if you’re only making a small amount of money each month. Respond to companies in a timely manner, deliver what they ask for and be professional. Read through contracts so that you understand what is expected of you. Even though you’re doing business on social media, always communicate like you’re writing an email to a boss. It can go a long way towards having the sponsors trust you.
Be Proactive - Don't Expect Companies to Come To You
Seasoned influencers say once you have 1,000 followers on Instagram, you can start reaching out to companies directly. She recommends asking for a free product to promote on your profile. Once you have a few sponsored posts under your belt, you can use them as your portfolio when pitching companies for paid sponsorships. You can't always rely on sponsors coming to you!
Keep at It
Influencers who grow their followings from 0 often credit their rapid social media growth to consistency. If you want the same growth, aim to post at least five days a week. Personal finance influencer Allison Baggerly said in an interview:
“For years I would post inspiring and educational content consistently and then engage with my followers,” she said. “Engagement looked like responding to messages and comments every day.”
She also recommends setting aside time once a week to brainstorm ideas for content. Do a brain dump and write down every idea you have. Don’t erase any ideas, just get them all out. You can often find yourself coming back to ideas, workshopping them, and improving them to be some of your best content.
Understand Your Audience
Having your audience’s trust is more important for long-term success than making a quick buck. It may be tempting to reach for any opportunity to make money, but it’s important to be selective about which brands you work with. Only promote products and services you believe in. Your followers will be more likely to consistently look to you for advice and recommendations.
Try Out One Platform at a Time
It can be tempting to feel like you need to start several social media accounts at once. She recommends building a steady following on one platform before you move to another. Once you have a few thousand followers, you can launch a new profile and ask your current followers to join you. Make sure to post consistently on all your accounts and don’t be shy about reusing content.
Learn From People Who Have Done This Before
There are thousands of successful social media influencers - it can't hurt to ask around! From what knowing what rates to charge, supporting each other, and giving helpful tips and tricks, other creators can definitely be a wealth of knowledge. Like any job, find some people whose skills you admire, and figure out how they did it!