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Influencer Business Model | How Do They Earn Money?

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business model Influencer

In this article, you will learn what the business model of influencers is and how they make money.

Did you know? An average Influencer with 100k followers on Instagram earns more than 14k per post.

In 2022, They are the only ones who can influence people and make any brand into unicorns. But, not everyone knows how social media influencers work with brands and earn money from their interest and passion. As a career opportunity, many people question whether becoming a social media influencer is good or not.

There are various ways in which an influencer can make money. But before we get to that, it’s important to understand “what an influencer or content creator is”.

What is an Influencer Exactly?

Influencers are people like us, they follow their passion and share on social media platforms, influence people with their lifestyle and earn money by collaborating with brands. How much money or fees they charge for a post will be decided by their followers and engagement rate.

They can range from celebrities, athletes, and social media personalities to everyday people who have a huge number of followers on their social channels.

These are the highest-paid top ten social media influencers in the world.

Name Followers Earrings
1. Cristiano Ronaldo445M$880,259 – $1M
2. Kylie Jenner340M$673,528 – $1M
3. Leo Messi329M$651,957 – $1M
4. Selena Gomez321M$636,320 – $1M
5. Dwayne Johnson317M$628,429 – $1M
6. Kim Kardashian313M$619,846 – $1M
7. Ariana Grande312M$619,030 – $1M
8. Beyonce Knowles258M$510,900 – $851,500
9. Khloe Kardashian245M$484,589 – $807,648
10. Kendall Jenner238M$473,001 – $788,335

How do influencers work?

Firstly, the way content creators work is not tough, it is simple enough that even a 12-year-old can understand it.

  1. They select a niche and platform that they are familiar with.
  2. An influencer creates content that grabs the attention of their target audience and followers.
  3. They follow through by engaging their audience and providing them with useful content such as entertainment, knowledge and fun.
  4. Once they have a large number of followers and a good engagement rate, they look for brands that want to market their products and services through social media.

This is how the majority of influencers’ business model works. However, there are other key partners who become a part of an influential business model as the company progresses.

How Do Influencers Earn Money?

While brands are the most common source of income for most influencers, there are other ways for influencers to make money. These are some examples:

1. Affiliate Marketing

Affiliate marketing is a commission-based model in which the influencer is compensated for each sale or lead generated for the partner brand.

Influencers promote a partner brand’s product or service on their social media channels or blogs and contain a link to purchase it.

If someone clicks on the link and makes a purchase or fills out a contact form, the influencers receive a commission.

The Brands benefit from having access to a huge number of influencers who are ready to promote their product in exchange for a commission.

This is the most used way for influencers to make money as they can sell the offering in their unique way and get a commission for it.

2. Brand Sponsored Content

Brand sponsored content is a type of content where the influencer earns money from the brand by creating and publishing content about them for example product unboxing and reviews.

The way it works is that the brand provides creative content like a story, video, photo or sometimes a product and tells them what they want to say or do in the content.

The influencer then creates content and publishes it on their social media channels or blogs.

The advantage for brands is that they can control the direct messaging and gain access to a large number of influencers.

This is a popular way for brands to make money because they can control the content and messaging.

The disadvantage for influencers is that they don’t have much control over the content and may not be able to publish it elsewhere.

3. Creating a Product Line

Many influencers have a large number of followers to market their products. Creating a product line is an increasingly popular way for social media influencers to make money.

For example, a fitness blogger can develop her own nutrition product line. Other social media influencers market a variety of personally branded products from places such as Facebook, TikTok, Instagram and YouTube.

Real-Life Example:

Chris Bumstead is a fitness influencer, and also Mr Olympia. He launched his own manufacturing Raw Nutrition Supplements brand called Get Raw Nutrition.

4. Ad-Revenue Sharing

Typically, influencers using ad-driven channels like YouTube, Facebook, etc. sign up for ad-revenue sharing with these platforms, where the platform accounts for 45% (Facebook) to 55% (YouTube) of ad revenue. charges. Videos and gives them the remainder.

The model works like this –

A brand comes to the platform to publish a campaign to a specific audience having a particular interest, browsing history, age-range and location.

The platform then selects the relevant influencers and runs advertisements on their channel.

The platform share advertising revenue with them based on the amount of traffic or engagement their video content receives.

Lastly, the advantage for brands is that they can target influencers directly without any third parties and also get a clear idea of what is performing well and what is not.

5. Donations

Some influencers monetize their followers by soliciting donations from their fans.

While this model is not as popular as others, it is used by some content creators to supplement their income.

In this model, the influencer either asks their followers to donate money to them in exchange for exclusive content or simply to show their support.

The Influencer Business Model

The influencer business model is like any other digital business. Influencers target customer segments based on the channel they use: YouTube, Instagram or Blogs.

In short, intent-driven audiences if they use pull-marketing channels like YouTube. People who are already looking for something in detailed content like product unboxing, reviews, guides, etc., form this segment.

Basically, an audience-driven by micro-moments using social engagement channels like Tik Tok, Instagram and Twitter. People using these channels during their idle time form this segment.

At the same time, they provide value in good quality content that entertains, guides, and helps their followers solve problems, get the most of their free time, learn new things, and keep trending. Stays updated.

Meanwhile, key activities include creating, curating and distributing content in blog posts, videos, photos or video broadcasts that resonate with their target audience.

After that, once the influencer has a noticeable following and engagement, they start signing contracts with brands that become their key partners.

These key partnerships can be with:

  • Content monetization platforms like YouTube share revenue in exchange for giving the influencer a wider reach.
  • Talent agencies that help them connect with brands and manage their endorsement deals.
  • Companies and web apps to help with content creation, scheduling and reporting on social media.

Also, they need to continue their following by entertaining their audience and maintaining profitable customer relations with them as well as partner brands.

Once everything is settled, the influencers build their revenue model where they can earn money in various ways which we have mentioned above.

In Conclusion

This is a huge opportunity from an influencer perspective as Influencer marketing is growing rapidly and is already a $16.4 billion industry by 2022.

Have we forgotten something? Please let us know what you think about our article on How Influencers Make Money, in the comments section.

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