Online influencer marketing is a relatively new creation, but it has fundamentally changed how brands communicate with consumers. People with targeted audiences are now the focus of advertising efforts. Influencers can tap from small to larger audiences thus, giving companies another way to promote their products. Indeed, influencers make money by selling digital products via sponsorships and affiliations, brand ambassadors programs, and physical products.
Digital products are profitable for influencers because they are cheap to produce. They usually take the form of e-books, travel guides, workout programs, meal plans, checklists, and organizational templates.
Ultimately, digital products allow influencers to leverage their expertise on a given product. Consumers are also more than happy to pay for information that is neatly arranged and synthesized for easy consumption.
Many social media influencers have also jumped on the podcasting bandwagon as a way to solidify the connection with their audience and share free content.
Here, revenue can be collected from advertisements played at various intervals during the recording. Some may also choose to speak with industry experts and promote their products in exchange for taking a commission on sales generated. Lastly, some influencers make money by charging users a small subscription fee to listen.
With sponsored posts, brands work with influencers to promote their products in exchange for money. This practice is common in the travel industry, where hotels, destinations, or airlines hire influencers to promote specific locations.
How much money each influencer makes depends on their niche, reach, and the product or service involved. Most will stipulate so-called deliverables including social media posts, blog posts, and videos.
This is generally more lucrative for the influencer because of the time and effort involved in promoting the brand to their audience. Brands typically pay influencers on a retainer basis to secure their services for months or even years.
Influencers may also receive an additional fee for every piece of content created or receive a fixed percentage of every sale they facilitate.
A somewhat unique means of making money for influencers is by creating physical products.
This type of influencer monetization is most prevalent in the food, fitness, travel, health, and cosmetics industries. Brands work with influencers to co-create a physical product, collection, or range. Once released, they can earn money through commissions or via a flat fee depending on the contractual arrangement.
One notable example is Quay Australia, a company that has worked with various influencers over the years to co-design a range of sunglasses. It then promotes them on Instagram using branded hashtags unique to each influencer.
Influencers can also earn money via affiliate marketing. When they recommend a product or service, they are financially compensated when a follower makes a purchase.
Affiliate programs are most commonly associated with large eCommerce sites such as Amazon. But in truth, they can be implemented by businesses of any size, shape, or form.
Influencers can also make money by establishing an affiliate program for their own products. With an army of affiliates promoting products on their behalf, the influencer can increase sales revenue by doing very little.
- Influencer marketing has fundamentally changed how brands communicate with consumers. Targeted, people-focused advertising is seen as better use of company funds than traditional forms of less targeted promotion.
- Influencers make money by selling digital products to leverage their expertise in a specific niche. Selling advertising and promoting products via podcasts is also effective.
- Influencers work with brands to promote affiliated products via sponsored posts. More lucrative returns can be had by longer-term relationships, otherwise known as brand ambassadorships.
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