How Do Influencers Make Money from Social Media?

How Do Influencers Make Money from Social Media?

Make no mistake: the days of social media being nothing but a fun environment to hang out in are over.

While many of us can still have lots of fun on social media, it has still become highly commercialized. Scrolling through a few posts in our news feed inevitably introduces us to a new ad by a company trying to get our attention. More recently, with the growth of recommended media in Instagram Reels and TikTok, we are increasingly seeing engaging posts from micro influencers and nano influencers who we end up following and engaging with.

In this way, social media platforms have now become a place where influencers make money, often in ways you don’t realize. In fact, the influencer marketing industry is now estimated to be worth more than $20 billion, highlighting its significant value.

So how do influencers make money? Let’s take a look at all of their options for monetizing their influence.

How Do Influencers Make Money?

As with many parts of the mass media and internet space, influencers have several options for making money. They generally choose based on niche, individual talents, opportunities presented, and more. Besides this, there are options that require larger levels of commitment that an influencer might not be interested in.

Affiliate Marketing in Influencer Marketing

Affiliate marketing is one of the oldest answers to the question, “how do influencers make money?”

With affiliate marketing, influencers and website owners place special links or coupon codes into their posts. When people click on the links or use the codes at checkout, then the influencer gets a small fee. One of the most famous affiliate marketing programs is Amazon Associates. There’s also a specialized influencer program.

Display Advertising for the Social Media Influencer

Display Advertising

Another option is display advertising.

Most of us think in terms of programs like Google AdSense, but this one mostly works on blogs or other websites. People with Podcasts can easily add sound bites into the program. In this situation, the ad is similar to radio commercials because it interrupts the program. YouTube also has options for display advertising, such as the inclusion of a merch shelf.  

Sponsored Posts

Nowadays, sponsored posts published on various social media channels are a major income source for influencers. In this case, sponsored posts can be any type of content creation on a commissioned basis.

So, an Instagram star might create a single post, series of posts, or Story. YouTube and TikTok influencers can make videos, and Twitter people send out Tweets. The product being promoted is usually incorporated into the content somehow. In addition, an FTC disclosure should be added for compliance reasons.

Photo and Video Sales

Photo and Video Sales

Instagram is known for its awesome photos. To that end, travel influencers and others who create frame-worthy pictures may be able to sell them. In this case, photo sales are typically prints that you can buy through their website. Sometimes you can buy the rights to them, as well. Videos are often licensed.

Digital Courses, Subscriptions, Ebooks

Social media is full of people with specialized expertise, and many of them have become influencers within their industries. For this subset of social media influencers, selling digital products is a great way to make money.

You will see a lot of this with fitness, food, and finance influencers. For the fitness set, selling different training options is quite effective, as is offering a subscription. Food bloggers can sell an ebook of recipes, and financial gurus often market subscription-based services.

Promote Your Own Products

Promote Your Own Products

Naturally, some influencers have their own products. Professionals in particular often have written books or work as consultants offline. For them, making money is simply part of their marketing routine. Other influencers end up creating products after gaining influence.

Co-Create Product Lines

Also referred to as an “influencer collab(oration),” co-creating product lines is very lucrative for some influencers.

This technique involves an influencer helping an existing brand to design or develop new products.

For instance, many sporting goods companies will collaborate with athletes to improve a product, then slap their name on it. Influencers in the beauty space might design an eyeshadow palette or beautiful lipstick cases. Typically, an influencer will get a portion of the proceeds.

How Much Do Influencers Make Per Post?

How Much Do Influencers Make Per Post?

When we ask how do influencers make money, it’s natural to wonder how much money they make. Prices for more advanced monetization techniques like subscriptions vary widely, so that needs to stay outside of the scope of our discussion. However, there is some information available on prices paid for sponsored content. Brands pay influencers to feature products and services on their social media pages through sponsored posts and brand sponsorships.

Price per Blog Post

According to Nomad With A Laptop, your price per post should be based on unique monthly visitors and domain authority.

If you remember, domain authority essentially refers to how seriously Google and other search engines take your website. Anyhow, the rates listed range from a bare minimum of $75 for someone with low DA and few visitors, all the way to $5,500 for large blogs with high DA. Another suggestion is to pay a flat $60 for each 1,000 monthly unique visitors.

Price per Instagram Post

Pricing Instagram posts is relatively difficult.

A while back, I did a post on Instagram rate calculators. The same information yielded wildly varying results.

Fortunately, there’s a rule of thumb which is slowly gaining acceptance. For each 1,000 followers an influencer has, you should pay $10 for each post. Keep in mind, if you’re doing a Story or series of posts, the numbers should be increased to reflect this.

Further Reading: How Much Do Instagram Influencers Actually Make? It’s Complicated. Let Me Explain.

Price per YouTube Video

On YouTube, influencers frequently must do a lot of work to put out a video. Scripting, shooting, and editing take a lot of time. For that reason, my suggestion is a minimum of $20 per 1,000 subscribers. However, with exclusivity agreements and other factors considered you might need to pay more.

Further Reading: How Much Do YouTubers Make in 2024?

Price per TikTok Video

TikTok an emerging arena for influencer marketing. However, that’s not to say getting a post sponsored is cheap. Right now, the suggested rate is $25 per 1,000 followers. Some of this may be due to the smaller supply of influencers up against other networks.

Further Reading: 8 Easiest Ways How To Make Money on TikTok in 2023

Price per Podcast Episode

According to longtime podcaster and friend John Lee Dumas from Entrepreneurs on Fire (JLD from EOF), the podcast industry has a well-defined pricing structure for sponsorships. In a nutshell, the rate is set per thousand listens (CPM), how long the spot is, and where it is placed into the episode.

  • For a 15 second preroll, expect to pay $18 per 1,000 listens. These are placed before the main content.
  • 60-second midroll costs $25 per 1,000 listens. Midrolls are in the middle of the episode.
  • Finally, a 30-second postroll sets you back $10 per 1,000. A quick call to action at the end.

How Does an Influencer Get Paid?

The answer to this depends to some extent on the way that they’re making money. In some cases, they get paid directly by people who purchase their subscriptions. These subscriptions are paid on a regular basis. However, for other methods of making money the payment schedule works differently.

Influencers can also do some of the above work on a regular basis as a brand ambassador. Brand ambassadors promote a company’s products or services on a long-term basis and integrate the brand into their lifestyle and content. Brand ambassadors play a crucial role in promoting products or services over a long-term period, maintaining trust and credibility with their audience. For this method they might get paid on a monthly basis as if they were receiving a monthly salary.

How Brands Pay Influencers for Services

In the case of sponsored content a brand will typically send them the money after publication of the content. They’ll also verify the content is up to their standards.

Influencers with some sort of commission-based agreement, like affiliate marketing or collabs, will likely get paid at intervals. This allows for brands to ensure that services are rendered before paying. Commissions also need accurate calculations before payment.

Finally, product promotion or display ads pay out a bit differently. Ad services like Google AdWords send checks or electronic payments at predetermined intervals. Payment resulting from an influencer’s own products is often governed by third-party agreements. These are quite a bit more complicated, however.

Paying Taxes

Most influencers are considered independent contractors or suppliers. If they are based in the United States, they typically get sent a 1099 form each year. These forms come from every brand that pays them a total of $600 annually. Then, the income is reported on their tax forms. Other countries have different procedures.

Using Intermediaries

Finally, keep in mind that some people use influencer marketing agencies and platforms.

In these situations, the agency sources influencers on behalf of brands. Or, the platforms accept payments and forward them to the influencer. These arrangements mean that the brand doesn’t pay an influencer directly. At the same time, the influencer might be getting the 1099 from that agency.

Further Reading: How Much Do TikTokers Make in 2024? Here are the Deets.

Is Being an Influencer a Real Job?

Well, probably not, except for the fortunate few who, through a combination of skill, hard work, timing, and luck generate enough brand sponsorships and social media sponsored posts and monetize a large enough community that they can grow a sizable and stable income over time.

Most influencers consider this “job” to be a side hustle. Remember, many of them grew into their niche as a hobby. Crafting influencers, for instance, typically just love to pass on their know-how and share their latest project. Making a little money at the same time is icing on the cake.

Obviously, there is a way to make a real job out of ones social media influence by leaning into one’s social media prowess. Influencers can generate income by managing social media accounts, which involves responsibilities such as content creation, post-scheduling, community engagement, and audience growth strategies. The benefits include job flexibility and high earnings potential.

Alternatively, professional influencers such as consultants and company executives explicitly intend to have a day job. If they quit, then they’d lose their edge. Part of the draw for these professionals is feeling like you “know” them or benefit from their wisdom.

Another thing to consider is that sponsored content doesn’t pay a lot of money unless the influencer can get a large number of impressions or video views.

Some influencers, such as celebrity chefs or major makeup artists, become hugely influential. Hiring these people can get very expensive. But it’s a bit like trying to become a professional musician or athlete: many people try, but few succeed in being famous. Getting a lot of subscribers or web traffic is too competitive.

Generally speaking, those who can make ends meet in this industry have a thorough understanding on how to monetize their influence.

Typically, they start small then go on to greater things. Developing a product personally, then selling it, is one of the few ways to rake in a lot of cash. One example of this is in the beauty industry: many of the most popular Instagram influencers, such as Kylie Jenner, have developed their own cosmetics lines.

Similarly, some influencers make a lot of money by using their products creatively.

Chefs might sell their set of cookware, which makes a lot of money. But in addition, they might use those products to work with another one, such as a gourmet food item. They’re selling both the food and the cookware at the same time. Or else they are showing cookware customers some new tricks. That might bring these customers back for more. Over time, the money can really add up.

In conclusion, the answer to “how do influencers make money” is, “several different ways.” While monetization options come in limited categories, there are many variations of each option. You could even argue that the need to be creative makes options nearly unlimited.

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Neal Schaffer
Neal Schaffer

Neal Schaffer is a leading authority on helping businesses through their digital transformation of sales and marketing through consulting, training, and helping enterprises large and small develop and execute on social media marketing strategy, influencer marketing, and social selling initiatives. President of the social media agency PDCA Social, Neal also teaches digital media to executives at Rutgers University, the Irish Management Institute (Ireland), and the University of Jyvaskyla (Finland). Fluent in Japanese and Mandarin Chinese, Neal is a popular keynote speaker and has been invited to speak about digital media on four continents in a dozen countries. He is also the author of 3 books on social media, including Maximize Your Social (Wiley), and in late 2019 will publish his 4th book, The Business of Influence (HarperCollins), on educating the market on the why and how every business should leverage the potential of influencer marketing. Neal resides in Irvine, California but also frequently travels to Japan.

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