Statistics on the Power of the Social Media Influencer Marketing Industry
Social media influencer marketing has some impressive numbers to back it up:
There were over 1.5 million influencer posts on Instagram in 2017.
Worth of influencer marketing industry in 2017, and is expected to be worth $10 billion over the next couple of years.
18 - 34
Almost three-quarters of influencers on Instagram are in the 18-to-34 age range.
How Social Media Influencer Marketing Works on Instagram, YouTube and Other Networks
Here’s how brands, influencers, social networks and end customers interact in influencer marketing.
Brand Identifies a Product or Service
Brands have certain products or services that they want to promote to audiences that are hard to reach via other means. For example, they may
have a new clothing line targeted at women between the ages of 18 and 22. The brand decides which products they want to promote and defines an
audience for each one, typically including age, gender, location, interests and similar demographics.
Brand or Marketing Agency Finds an Influencer With the Right Audience
Once they understand audience demographics, a brand will look for influencers who have that audience. They will explore areas like follower
counts, the influencer’s interests, the type of posts they create and various other factors. They will narrow influencers down to a short list
and identify those most likely to connect with their desired target market.
Approach the Influencer and Arrange Terms for Sharing the Product
This is where it gets interesting. Typically, a brand or marketing agency will approach individual influencers and discuss terms for promoting
their products. This will include areas like:
- How the brand, product or service will be represented
- Social networks where the influencer will share their posts
- Payment amounts for promoting the brand, product or service (on a per post, per purchase, campaign or other basis)
- How often the influencer is expected to post on their social media accounts
- Any hashtags and language that needs to be included in posts
- How the results of the campaign will be tracked
Social Media Influencer Posts About the Brand, Product or Service
After terms have been agreed to, the influencer will create posts to promote the brand, product or service. They might use predesigned imagery,
photograph a product themselves or work with a brand or marketing agency on other types of content. Once the posts have been created, they are
then shared with the audience, typically on a predefined timetable.
Audience Interacts and Buys the Product
The post is shared with the audience and they purchase the offering based on the influencer’s endorsement. The brand or marketing agency will
track the success of their social media influencer marketing campaigns based on the revenue they generate. This helps the brand understand their
return on investment and which influencers are most effective.
What It Means to Be a Social Media Influencer on Instagram, YouTube and Other Networks
If this sounds like something you want to be involved with, it’s important to understand what brands and marketing agencies are looking
for. This could include:
- A large follower count (preferably 100,000 followers or more)
- An active presence across one or more social media networks, especially Instagram, Facebook and YouTube
- A niche for yourself, whether that’s sharing makeup and fashion tips, reviewing the latest technology or having a strong opinion and viewpoint
- Plenty of interactions from your followers, including onward sharing, likes and favorites
- An audience that is difficult to reach through traditional marketing channels, like teens and young women
- A deep, personal connection with your fans and followers
How You Will Spend Your Days as a Social Media Influencer
The main area you’ll be focusing on is creating original content. Your followers will spot when you’re just sharing generic marketing messages, so you need
to personalize all of your posts. This could involve taking videos of you using or wearing the product, staging beautiful photography or creating engaging
descriptions and copy.
You’ll need to post regularly as well — not just for the offerings you’re being paid to promote, but about other aspects of your interests and life. This
helps to keep your followers engaged and encourages more people to become fans.
You will also be reporting and sharing from others in your social network and interacting with your followers to build personal connections. You may also be
seeking out marketing deals yourself and contacting agencies and brands to offer your services.
How Instagram and Other Social Media Influencers Make Money
Influencers make money because brands and agencies pay them to promote their products or services. You may get paid in several ways
based on multiple metrics:
- One time for a single post
- Multiple times, for each post you make in a particular influencer marketing campaign
- A set amount, based on the number of interactions, likes, shares and other metrics on your posts
- A percentage, based on the revenue generated as a result of your audience buying products and services
You should work with the brand or marketing agency to agree on payment terms that fairly represent the effort you’re putting in and the results they expect
In terms of how much you can make, Instagram broke down the average of what influencers were charging by follower count and category. Here’s what they
Average Pricing Based on Follower Count
- Fewer than 1,000 followers: $83 per post
- Between 1,000 and 9,999 followers: $107 per post
- Between 10,000 and 99,999 followers: $240 per post
- More than 100,000 followers: $763 per post
Average Pricing Based on Niche
- Modeling: $434 per post
- Photography: $385 per post
- Food: $326 per post
- Pets: $320 per post
- Fitness: $306 per post
- Beauty: $205 per post
- Fashion and design: $217 per post
The Best Platforms for Influencers — Instagram and YouTube
The best platform for influencers, by far, is Instagram. It’s designed around beautiful images and easy sharing, so it’s one of the
best ways for brands to showcase their products through you. YouTube is also becoming increasingly popular, as more of us are choosing to consume content
Tips on Instagram Businesses and Making Money on Instagram
Here’s a selection of advice on building and making money from an Instagram business.
- You probably don’t need as many followers as you think to make money on Instagram. Some influencers in specific niches made an average of $83 a
post with fewer than 1,000 followers.
- Finding the right niche is essential. Choose an area that you’re passionate about and where you can develop a strong voice and personal brand.
- Invest in a good camera and find the strengths in your personal style and appearance. A visual style is vital to success on Instagram.
- Share posts from other influencers, the latest news, and areas trending in your niche. Become an expert Instagram curator your followers can
- Do your research and find the right brands and marketing agencies to work with. Approach them with a compelling pitch on why they might want to
work with you.
Tips on YouTube Businesses and Creators
Although most YouTube creators make money from ads posted on their videos, there’s a growing market for YouTube influencer
- YouTube success is all about being incredibly relevant to your audience. Find a niche that balances your individual viewpoints and opinions with
a specialist subject matter.
- Teach yourself videography, editing, lighting, framing and other video skills. It’s vital that your videos look good so you can stand out from
- Find your voice. The nature of YouTube videos means you have a little longer to build a connection with your followers. Focus on unique
interactions and give your audience a reason to subscribe and follow you.
- Get a deep understanding of your audience and who is interacting with you. Experiment with different kinds of videos to see what gets the most
engagement; read your comments and tailor your approach.
- Use search engine optimization on your videos and take advantage of the title and description for keywords, so you stand out in searches.
Your Social Media Influencer Business Needs a Plan
You need to define how you’re going to run your influencer business, market yourself, get sales, make a profit and grow. This can only come
about through creating a watertight business plan. It will help you get your thinking in order and show your commitment to your influencer marketing
Business plans do vary slightly, but they should cover the following areas:
- 1 An executive summary with the most important points from your business plan
- 2 Your goals and what you hope to achieve with your online business
- 3 A description of your online business, background information and context
- 4 A market analysis and likely demand
- 5 An overview of how your online business is structured
- 6 Your online business model
- 7 How you will market and sell your offerings
- 8 Financial projections, revenue and profitability
- 9 Appendices
We’ve got the perfect guide to writing your business plan.
Choose the Right Business Structure and Register Your Influencer Marketing Business
Now that you have all the background information for your influencer business, it’s time to make it into a reality. That starts by choosing the right structure or “legal entity” for your business. In the U.S., there are five main business structures. They are:
This is the "default" business structure and is what your influencer business will be if you decide not to create a more formal structure. We don't recommend this type of business as it doesn't give you the legal protections you need.
Similar to a sole proprietorship, if you go into business with someone else without forming a legal business entity, you will be treated as a partnership. This doesn\’t give you limited liability protections, so we don't recommend it for your social media business.
Limited Liability Company or LLC
The Limited Liability Company (LLC) is ideal for most marketing businesses. An LLC is easy and inexpensive to set up, and it has the least administrative requirements of any formal business entity.
This is a more complex type of business and isn't generally recommended for smaller organizations, like an influencer business.
These are the largest and most complex types of businesses and are typically far more than the average entrepreneur or business owner will need.
Rules, Regulations and Taxes for Your Influencer Marketing Business
Even though you’re running a virtual business, you can’t escape real-world licenses, permits and regulations. You will need to explore local, state and federal licenses and permits, and
we can also help out with researching your business licensing needs.
In most cases, you will want to keep your personal and business finances separate. We recommend a business bank account for your side business. You might also want to consider a business credit card. Additionally, you will also need to keep careful bookkeeping records and file business and personal taxes.
Taxes are a fact of life if you’re in business, and there are various ways you will need to file and pay them. This can include self-employment tax, state income tax and federal income tax. Depending on where and how you’re selling products and services, you may also be liable for sales and use tax.
As a rule of thumb, we recommend holding back around a third of your earnings to pay your taxes. We can also prepare and file your tax returns for you.