How do influencers make money?

While we are living in an increasingly digital world dominated by social media, influencers have become celebrities in their own right. Given that being an influencer can also be a full-time job, I think that it is interesting to understand how this works and what the process of becoming an influencer is like.

When it comes to influencers, the most common question is “How can you make enough money to make it your full-time job?” To be honest, I’ve frequently wondered the same thing, and after conducting some research, I now have a clear picture of how it all works, which I’d like to share with you. But before we go into how influencers earn money, let me give you a quick overview of what it means to be an influencer.

It is important not to confuse influence with popularity. One of the biggest misconceptions about influencers is that they are people with a lot of social media followers. In reality an influencer is someone who has the power to influence the perception of others or gets them to take action whether it is buying a product, paying for a service, or any other action. In other words, if we apply this definition in the world of marketing, an influencer is someone who helps companies gain more visibility and eventually new customers through content creation. This can be very effective as influencer-related content comes across more naturally and people trust it more than advertisements.

But how do influencers make actual money on social media? While there are many different ways influencers can earn money, we would like to walk you through 5 of the most common ones:

1. Social media sponsored posts

One of the most popular ways for influencers to make money on social media is through sponsored social media posts. Sponsored posts are posts that promote a certain brand or product. In exchange for publishing the post, the influencer gets compensated for it by the brand in question. Some of the most popular social media channels to publish sponsored posts on are Instagram and TikTok.

2. Brand ambassadors

A brand ambassadorship is comparable to sponsored postings in some aspects, but differs in others. While sponsored postings might be one-time events, brand ambassadors have a long-term engagement with their clients. If an influencer signs a 6-month contract as a brand ambassador, they not only promote the brand on their social media channels, but they also frequently get featured as a model or spokesperson for the product on the brand’s social media channels or website.

3. Affiliate marketing

Affiliate marketing has become one of the top ways for influencers to make money. Through affiliate marketing, influencers simply need to share a link to a product or service on their channel and then receive a percentage of the sale if a follower buys an item through that link. This type of marketing strategy is especially popular in the fashion industry. Fashion influencers share links to the clothes they wear in their daily posts through social media. By doing so, their followers buy the items and this creates a revenue stream. As this is a sales-based revenue, the more followers buy their product the bigger their revenue stream will be.

4. Product creation

Product creation is very common in the influencer world. Since influencers get a lot of media attention and trust from people all over the world, it makes sense for them to launch their own product line. While this can be any product, the most recurring products tend to be clothing or cosmetics. When influencers launch their own product, they have the great advantage of not having to spend money on advertising because they can promote the product themself through their channels. On top of that, the revenue stream is also bigger as the influencer does not only get a small percentage of each sale. While more effort goes into creating and selling their own products compared to creating content for other brands it can definitely be worth it.

5. Vlogs

Another way influencers can earn money is through vlogs. These are videos posted on YouTube in which influencers share anything personal such as their daily lives, their opinion on certain topics, product reviews, trips, and other types of content. Before anyone watches their video, YouTube usually shows viewers an advertisement. For each viewer that watches the advertisement before the influencer’s video, the influencer gets paid a few cents. This might not seem like a lot but if you have a big audience watching your videos and you publish videos on a regular basis, this can become a great revenue stream. The great thing about this is that if you create content that remains relevant and the number of views keeps increasing, your advertisement revenue can continue to grow for that video without having to put in any additional effort.

Average income of an influencer

While it is easy to write down a list of all the ways influencers can earn money, it is a bit more complicated to know how much an influencer earns on average as it depends on many different factors. Firstly, the income of an influencer is dependent on the followers. The more followers an influencer has, the higher their compensation will be. If the followers come from all around the world this can also be an added value because their content will reach a worldwide audience. The engagement rate is another important factor to take into account. The higher the engagement rate is the more the influencer can ask per piece of content. Depending on the type of product they promote, influencers can also expect higher compensation. Promoting a piece of clothes for example is much simpler than promoting an investment app where you need to go into much more detail to earn people’s trust and get them to invest on the app. Influencers in the US and UK tend to get higher compensation than in other countries. To give you an idea of what an influencer can earn on average: an influencer in the US with 41,000 followers can earn on average between $500 and $1,000 per sponsored post while an influencer with 500,000 followers can even earn $5,000 per post.