The Truth About How Influencers Make Money

One of the most asked questions I get via direct messages is, “how do influencers make money?” While many are genuinely curious, I think that question stems from the fact that in 2019 I quit teaching high school resource to pursue my blog as a full-time career. There are many misconceptions about influencer marketing– some that I have talked about before! While celebrity endorsements have been around forever, influencer marketing is relatively new. Naturally, there is a lot of mystery revolving around the the growing industry.

While I refer to myself as an influencer, that is because it is an industry term given by brands and agencies to the job I fulfill while creating content and blogging. Most influencers refer to themselves as that job title, despite it having a stigma or being seen as vapid to do so. Read on as I dispel some of the myths and rumors you may have heard about how influencers make money.

Various Ways to Make Money as an Influencer

There are at least five different ways that influencers are making money in 2021. I use many of these income streams to bring in money as a freelancer, but have yet to to create my own product line (final paragraph). The information below is a combination of what I have learned in the 7 years I’ve been in this career path, as well as information I have gathered from friends in the industry.

Influencers Make Money Through Product Placement

A tried and true method of influencer marketing is product placement. Audiences became familiar with product placement in movies and through celebrity brand ambassadors. A brand asks a celeb to be the face of a product and represent their business through ad campaigns and organic talking points said to the media. Movies and shows include products in their filming, sometimes even endorsing the product through storylines.

Influencer marketing is the lovechild of social media celebs and brand backing, formed from years of proven success in Hollywood. As social media apps began to take over, many (typically) average people found it easy to grow audiences that enjoyed watching their day to day lives. Brands caught onto this and began asking social media stars, deemed influencers, to promote their product to their audiences. In exchange, the influencer receives free product as well as payment.

My Experience: I make sure to vet every company I work with before agreeing to post for them. The ideal scenario is when a brand that I have loved and used for years reaches out to me to work together with them. Although I am being paid to endorse companies and products, rest assured that I have and will say no to companies that don’t fit my moral, ethical, or quality tests. Sometimes, a newer brand reaches out that aligns with my work and ethics. In these cases, research is done to look into their background. I will often ask for long trial periods to give myself time to assess the product and figure out if it is noteworthy enough to recommend on a sponsored basis. I only work with companies that I know I can recommend and my audience can continue to trust.

Content Creators Obtain Income from Selling Image Rights

Marketing has long involved photography and visuals in their ad marketing. Typically, this means hiring a photographer, model, makeup artist, hair stylist, clothing stylist, and production manager to create magazine-worthy images. With the broadening of creators via social media, brands realized that they could hire one (or two) people to create highly captivating visuals for their ads, cutting a lot out of the budget by not needing an entire team.

While buying the rights to image use and likeness is pricey,  having an influencer create content is still much more affordable than having an entire team be paid their time and copyrights. When companies work with influencers on campaigns, they can negotiate image rights into the contract, or pay slightly more than what they would for product placement, to be able to use the images in their own branded content. Influencers are even hired to create content for brands, and those images are never seen by their own audiences. Rather, the brand believes their images align with their aesthetic and pay influencers to be content creators for campaigns. Image use and rights to advertising cost hundreds if not thousands of dollars per image and can make influencers a pretty penny. If you’re not an influencer, but still want to have money in the bank, here’s how to save 10000 in a year.

My Experience: While I made money by selling image rights to brands, this is a hard sell. More often than not, smaller brands do not understand the legalities of image use and copyrights; I’ve had my images stolen and used in print ads in stores, email marketing ads, and website ads without my permission and wasn’t able to get fairly compensated. Along with that, bigger brands try to get away without paying a lot to influencers for their content. Many of my blogging friends have made a lot of money by selling image rights, but most of them have agents that negotiate on their behalf. Be wary of brands on social media saying “use this hashtag if you agree to a repost” as the fine print usually mentions that they can use your images on whatever they would like– forever– with no credit or money given to the creator.

Instagram Famous, TikTok Celebrities, and Social Media Stars Earn with Affiliate Sales

Affiliate marketing is no secret, but somehow gets the most confusion. This type of income earning is a commission-based model where influencers make a percentage of each sale they drive. Sales are tracked through embedded and tracked links that tell a company where a sale came from. Consider a social media star linking to products like a salesperson recommending products at your favorite department store. Commission is variable, but can be between 1%-50% of a sale price (although, the average commission earned is 10%).

Along with affiliate income, influencers and bloggers can make commission via ads that are placed on their site. These can be pay per click, or even pay per view of the ad. The higher the website traffic, the higher the payout would be for this type of passive income. RankIQ is one tool that can be used to build website page views.

My Experience: You’ll often see me using LikeToKnowIt and rewardStyle to earn affiliate income when I talk about products I love and recommend on my blog and social media. It’s an easy way for both the brand and I to earn money, at no cost to the shopper.

Influencers Make Money by Charging to Host Events

One of the lesser known ways that popular social media users make money is through hosting events. Sometimes, brands will hire an influencer to help put together an event in their hometown, or be a guest in their store. Sometimes, celebrity influencers are paid just to show up at events. This happens even if it’s an event only for influencer attendees. Another more obvious way of getting income is when influencers are invited to be panelists or guest speakers at conventions.

My Experience: I have participated in all of the above, but my favorite way to earn money through events is when I am able to speak to an audience and share my knowledge or experience with them– and get paid to do so!

Online Creators Build Their Own Branded Business

The final way that influencers make money is through utilizing their followings to leverage their own branded products and services. Many content creators sell presets, guides, apps, and one-on-one consultations as a part of their business model. Some design their own lines of products or fashion, which is then bought by eager fans. I don’t have any experience in this area, but I do know that it is extremely lucrative and most influencers’ long-term income plan.