Whether you are a big marketing agency or a social media influencer with limited followers, you both need to appreciate the power of the ability to make money with influencer marketing in 2020 and beyond.
Among marketing agencies and brands, influencer marketing remains one of the most effective forms of marketing. Usually, they run marketing campaigns for creating brand names and generating sales. Engagement or clicks is the most important criteria for evaluating influencers.
In this article, you are going to learn how influencer marketing is shaping the world of online marketing and how agencies & influencers can leverage this particular form of marketing to their advantage in order to make money with influencer marketing.
So without further ado let us get started.
What is Influencer Marketing?
Who is an Influencer? An influencer is a person who is very popular on various social media platforms like Instagram, YouTube, TikTok, Facebook, Twitter, etc and has a devoted following of people who adhere to their opinions.
They have established an authority in a particular niche and people are willing to trust them for what they say.
So influencer marketing occurs when an influencer works for a company or a brand to promote their products online. Brands leverage the power of an influencer to sell their products.
Influencers are able to influence their follower’s purchasing decisions and hence called influencer marketing.
Influencer Marketing Trends in 2020
Before you learn how to make money with influencer marketing you need to learn how important influencer marketing is for agencies and brands.
- Influencer marketing Industry is going to get even bigger in 2020 with a market share of $10 billion. In 2016, it was just less than $2 billion. In the last three years it has grown 3 times.
- Each year, more than 400 influencer marketing agencies and platforms are established in the USA alone.
- The reason for this sudden growth is obvious, profits earned through influencer marketing are 6 times more what an agency invested for. In simpler words, for every $1 invested they earn $6.
- Moreover there has been a 3-fold increase in micro-influencers used by large marketing firms since 2016. It is because Nano & Micro-influencers deliver better engagement rates than superstar influencers on social media.
- Nano influencers with less than 1000 followers have 7 times more engagement rate than a mega influencer with 100,000+ followers. In 2016 there were 3 micro-influencers hired for one mega influencer, but by the end of 2019, there were 10 micro-influencers for one mega influencer. The ratio rose from 1:3 to 1:10 in just 3 years. This shift from mega influencers to micro-influencers simply means that micro-influencers have laser-focused supporters.
- Although there are myriads of social media platforms like Facebook, Instagram, YouTube, TikTok, etc for implementing influencer marketing, 90% of agencies prefer to use Instagram for launching a marketing campaign. Their second choice is usually TikTok or YouTube.
- Companies find it really difficult to make headway with Facebook and Twitter when it comes to influencer marketing.
- Another trend worth noticing is the number of creators hired by each company has being doubled. In 2018 over 300+ creators were hired per organization, in 2019 the number rose to 600+.
- An agency requires a standalone budget for running an influencer marketing campaign. On average, they are willing to spend 10% – 20% of their whole marketing budget on influencer marketing. In the USA, brands are spending anything between $50,000 and $500,000 on influencer marketing.
- Agencies feel the quality of customers gained from influencer marketing campaigns is better than other forms of online marketing.
- Finally, finding great influencers could be the greatest challenge for running a campaign. Brands in the USA struggle to find suitable influencers to run their campaigns.
Role of Influencers in Influencer Marketing
In influencer marketing, the importance of influencers is way more than the marketing agency which hires them. You can say most of the marketing role is played by the influencer himself/herself rather than the agency.
Influencers are solely responsible for selling products to their followers. They build a personal relationship with their fans online and persuade them to buy merchandise.
People love influencers because they can relate to their lives, unlike big celebrities who are always out of reach.
In simpler words, influencers are the ones who are going to bridge the gap between their fans and themselves. Marketing agencies just take the back seat.
A Few Examples of Influencers & Influencer Marketing
Broadly influencers can be divided into three categories– mega, macro and micro. Let us take a real-world example of each one of them to illustrate how they make money with influencer marketing.
- 168 Million followers
- 6,358 posts
- How she is selling facial sunscreen.
- 100,000+ followers.
- 1,941 posts
- Selling a Winter Outfit on her post.
- less than 40,000 followers – 36.7k followers
- 837 posts
- Promoting a Home Appliance Deluxe Pressure Cooker Partnered with Ninjakitchen.
Influencer Marketing by the Companies
In the following three examples, you will see how companies and influencers collaborate to make money with influencer marketing.
1. Zara collaborating with Tylynn Nguyen
2. Sperry with Cody Andrew
3. Loeffler Randall with Samantha Wennerstorm
Best Influencer Marketing Techniques
Influencer marketing can be done in different ways by influencers to sell products to their audience. However, there are 4 most effective methods to do it and make money with influencer marketing.
Sponsored Post/Content is one of the most common ways to sell products by influencer marketing. Sponsored content includes a post containing an advertisement for a product.
The post is basically a call-to-action sales page that invites followers to buy products and services. This post is published on the influencer’s social media accounts.
In the post, influencers will concisely narrate a story (to sound credible) telling how the product has changed their life and hence it is going to work for you as well.
In the previous section, Kylie Jenner’s or Christine Kong’s Instagram post was an example of Sponsored content.
2. Discounts/Affiliate Links
Influencer specific discounts are a very potent marketing technique to get more buyers. People love discounts offered by the influencer. These discounts are tracked using affiliate and referral links. Discounts are always blended with the sponsored content.
3. Brand Ambassador
A brand ambassador works with a company’s brand for a longer period of time. To become a brand ambassador the influencer must have a huge following.
4. Contests and Giveaways
Followers also love free stuff and giveaways. Hence influencers organize contests to draw lots of attention and reach thousands of people through their channels.
There are many other methods to promote products depending upon the social media platform you are using, but these 4 are the most popular methods used to make money with influencer marketing.
Implementing Influencer Marketing through Instagram
Now let us learn how marketing agencies and influencers can make money with influencer marketing in 2020.
Popularity of Instagram
As I said earlier in this article, Instagram is the most preferred social media platform for influencer marketing around the world. Almost 80% of agencies and brands love to use Instagram.
According to Business Instagram, 60% of people discover products through Instagram, 80% of them follow at least one brand and around 200 million accounts check out a Business Profile each day.
Just like YouTube viral videos Instagram photos can also go viral and get millions of views in just a couple of days.
So you can imagine why Instagram is a goldmine for agencies and influencers who want to make money with Influencer marketing.
Hence in this article, we are going to use Instagram for running influencer marketing campaigns.
Start with Sponsored Posts
People are more likely to trust content shared by ordinary folk rather big brands. 80% of customers want to buy a product which is recommended by their friends and family members. They really don’t trust big corporate and brand names anymore.
Hence, companies are forced to sell their merchandise through micro or macro influencers on Instagram. It is because they already have an established community of Instagrammers.
Most popular brands like H&M and Zara want to work with micro-influencers with less than 10,000 followers.
While choosing an influencer, agencies pay close attention to their engagement rate.
Promote Affiliate Links
High-quality affiliate programs that offer recurring commissions are really great to promote on Instagram.
You can insert clickable Affiliate links in your Instagram bio. You can also include links in your posts by using captions to grab attention.
Become a Brand Ambassador
If you are a macro influencer with over 100,000 followers then you can become a brand ambassador for a company or a brand.
You collaborate with a company and promote their products on a regular basis within your community.
Lifestyle bloggers who love to travel and create breathtaking photos and videos are more likely to become a brand ambassador for a particular brand name.
These 3 are the most popular ways to make money on Instagram.
There are other platforms also like YouTube, Facebook, TikTok where influencers are very active. But in this article, we just focused on Instagram.
Conclusion: How Much Money Can You Make?
So how much you can make being an Influencer?
To give you an idea Kylie Jenner charges $1.2 million for posting a single post on Instagram. Similarly, other celebrities whether they belong to entertainment or sports industry charge in millions because they are mega influencers.
Macro and Micro-influencers can earn anything between $5000 – $50,000 depending upon their followers and reputation.
Engagement rate (Like and Comments) is one of the most important parameters that determine how much an Influencer is going to earn.
The formula is Engagement Rate = [(Likes + Comments)/Number of Followers] * 100
Hence more the engagement rate more the money you make.
I will conclude by saying earning $8000 – $10,000 per month for an influencer is no big deal provided he/she creates great content and has a loyal followers with high engagement rates.
Choose the right social media platform now and get started!
This article was written by Mitali Roy