"If this is done well, most of the audience probably won't realise they're seeing paid ads."
Have you ever wondered how social influencers make money? If so, you're not alone.
One of the most important elements in the success of an influencer is persuading the public that it's not about the money. And that means making money is not quite as straightforward for an influencer, as it is for your average vendor or service provider. Bagging that revenue normally has to be a low-key element in the influencer's overall activity. But that doesn't mean they're not raking in pots of cash…
Becoming an influencer is about finding a passionate group of people, and then reflecting their passion back to them in a way that is fresh, powerful and chantable. It's very message-orientated. An influencer needs to look as though they put the message way above the money. Otherwise they appear inauthentic and lose public trust. In fact, the most skillful influencers are so good at putting their message above the money, that most of their audience can't see them earning anything.
So the ways in which social media influencers make money are not always obvious, and some methods are not detectable at all. If an influencer is really effective, they'll be able to keep their social publishing timeline broadly free from advertising spam. Or at least, be able to disguise the spam so it looks like something else. This is one of the key differences between an influencer and a vendor or service provider.
BACK OFFICE DYNAMICS
The first thing to bear in mind is that once someone becomes a real mover and shaker online, their private inboxes get pretty full of messages from people and organisations wanting a piece of the action. That in itself enables the influencer to make financial arrangements behind the scenes, without spamming, and without outsiders necessarily knowing they're taking money, let alone knowing what they're doing in return for it.
The second thing to bear in mind is that influencers are acutely aware that their social posts and Tweets are digital ad boards, and that the only thing an ad board ever promotes for free is the ad board itself. So if you see an influencer namedropping someone in a positive manner - even if they're referring to that person as “a friend” - you can be pretty damn sure that money has changed hands.
Although a lot of influencers do sell products of their own, it's more common to find them selling other people's products or brands. But it's the way they sell what they sell that makes them different from vendors and regular service providers. And unlike a product vendor, influencers can also sell themselves.
A key part of the “influencer effect” is a sense of not needing to shout about anything - except the main message. The selling and promotion is an exercise in subtlety. Recommendations might be made only once, but the influencer has a much more engaged audience than your typical vendor. That means people take a lot more notice of the recommendations when they do come along. Whereas a retailer puts their main drive of effort into getting products in front of potential customers, an influencer puts her/his main drive of effort into building trust, and making people care about what she/he says and does.
So how does all this translate into money? Here are thirteen typical, low-key ways in which influencers keep their bank balances topped up…
AFFILIATE LINKING
Affiliate linking is a commission-based referral system, in which Party B (a seller) pays Party A (the influencer) to send them customers, via a hyperlink. The link has a built in reference, which tells Party B that the visitor came from Party A. If the visitor buys, Party A earns commission on the sale from Party B.
On social media it's often extremely difficult to see when this is happening. Influencers who do affiliate marketing may use link-shortening services such as bit.ly or ow.ly. This enables the influencer to track every hit on the link they posted, as well as hiding the original, custom affiliate link so that the people who hit it won't see it. Further, many of the services that influencers are effectively selling through this process are freemium or free-trial packages. That means the influencer can recommend the service as free - so it looks like they're not selling anything - but still collect commission if the referred party opts for the paid plan or doesn't cancel after the trial.
Influencers can also use affiliate linking on their blogs or on their own forums, but unlike display advertising, affiliate linking is something they can do directly from social media.
PRODUCT PLACEMENT
Product placement is the paid promotion of a brand through a seemingly natural transmission, which is not usually recognised as an advert. It's prohibited on UK TV, but individual people on social media are still not assumed to be advertisers, and therefore are not subject to strict advertising regulations.
For example, a fashion brand pays an influencer to wear their clothes, and namedrop them on social media. With product placement there's no “Go and buy…” - which is why a lot of people don't spot that it's an ad. The fact that the influencer's opinions are respected and trusted is enough to connect the dots, so to speak. The audience want to be like the influencer, so anything the influencer wears is going to be of interest to the audience. Provided the influencer wears the brand, and drops the name of the brand they're wearing, that's enough to drive sales.
And the namedrop doesn't have to be a clothing brand. It can be a restaurant/pub chain, a taxi company - anything that sounds or looks natural in the context of the influencer's own life.
If this is done well, most of the audience probably won't realise they're seeing paid ads.
PAID FOLLOW DRIVES
With a paid follow drive, an influencer is normally given a preset sum of money to promote someone else's social media account. Even among niche influencers the payment may amount to a few hundred pounds or dollars, and buy as little as one shoutout. There's normally no guarantee as to the effectiveness of the shoutout(s), and most are an unequivocal waste of money.
From the client's side of the deal, great care has to be taken with these initiatives. There's a vast number of faux influencers who have extremely high follower totals, but very little real public attention. It's not unusual to find self-designated “influencers” with half a million Twitter followers, but an actual reach of only around 1,000-2,000 impressions per Tweet. Which is way fewer than I get on my trainspotting account. And that only has about 1,200 followers. A good indication of a Twitter user's reach is the number of Likes and Replies their Tweets get. No Likes, no reach. Ignore the number of followers, because Twitter's current algorithms make that meaningless.
Other “influencers” do have an engaged audience, but it's an unsuitable audience for the party who wants the followers. On social media, niche focus can be phenomenally narrow. It's almost impossible to interest a niche audience in general interest topics, let alone a different niche.
But true reach and niche compatibility are not the only crucial considerations. The other critically important factor is the strength of the motivation. Even when someone has a reach of one million real people, simply saying: “Hey, follow this random person you won't have heard of” is not going to drive a million new follows. Or 100,000. Or 10,000. In fact in most cases it probably won't even drive 1,000 new follows. And the reason for this is that no one will do anything unless there's something in it for them. If the influencer doesn't provide an incentive, the uptake is going to be minimal.
One type of influencer whose follow drives do consistently work (at least in numerical terms) is the so-called “Twitter philanthropist”. This is someone who runs “cash giveaways” - which may or may not be genuine, and may or may not have fixed winners. The reason these drives are effective in terms of follower volume, is that the public are given the impression that if they don't follow the third party, they won't be entered into the prize draw. For example…
“I'm giving away £350. To enter the draw you must retweet this tweet and follow @ThirdPartyWhoIsPayingMe.”
The third party pays the influencer, say, £600, and assuming the £350 prize is real, the influencer pockets the remaining £250. Looks like a pretty easy £250. But that would be to overlook the enormous investment of labour and perhaps money that the influencer made in order to gain their reach in the first place. Influencers normally work unpaid for a long time before they get anything back. So when they do start to earn, they're compensating for all that free labour they did.
The problem from the client's side is that the people who end up following them are really only doing so in an attempt to win money. So unless the client paying the “philanthropist” is also intending to make a career out of running cash giveaways, there will be little point in them having the followers - even in high volume.
Most of the time, this is going to be a pretty dumb investment for the paying party. But there are plenty of influencers who don't care, and will offer these “promo deals” regardless.
SELLING STORIES
When they're starting out, major influencers often use self-focused media stories as a means to raise their profile. They'll go to media blogs - or the people who write for them - and offer a ready-made story, involving themselves, and designed to bait clicks. Writers and blogs are permanently desperate for highly readable material, so if the budding influencer is giving away a good story or interview for free, it can be a no-brainer for the outlet.
But as the influencer becomes more famous, the desire for stories involving them increases, and beyond a certain threshold they can begin to sell stories rather than give them away. At all stages, the level of motivation for influencers to make up stories is sky-high. The lesson?… Don't believe everything an influencer says. A lot of them are worse than newspapers for making things up.
BOOK SALES
You'd quickly lose count of the number of influencers who've written books. Or have had books written on their behalf by ghost-writers. Books are not just a source of money to an influencer. They're also a badge of authority. Being a published author - even if you basically published the book yourself - has a stamp of credibility attached to it. A large number of influencers lead their social bio with “Author of…” That gives them cultural cred, as well as advertising their book(s) to anyone who checks out their profile.
Further promoting the books can be a difficult one when it comes to the influencer's social media feed. It's hard to conceal, so if an influencer promotes a book a lot it can start to look as though they're putting the money above the message.
If the influencer is really happening, an insertion of the book title into their social bio will be sufficient. But another common tactic is to build a separate email list and promote the book through that. Direct email marketing restricts the promotions to those who have already expressed heightened interest, so it's normally a much safer bet than spamming a Twitter timeline or Instagram feed.
RETWEETS AND REBLOGS
That's right. Influencers get paid to Retweet or Reblog people. The situation with this is very much like that with product placement and follow-drives, in that once an influencer attains a certain level of reach, their amplification of a Tweet, Tumblr post or whatever is just too valuable to be free. Retweets have an audience tolerance volume threshold, so an influencer can only get away with a limited number of them. That transforms each Retweet into a marketplace. There will be some exceptions, but not as many as you might think, and most really big influencers won't do unpaid Retweets at all.
So if you see influencers with huge reach Retweeting, it's almost inevitable they were paid to do it.
Clients need to be careful with this though. Social platforms may award Retweets and Reblogs lower algorithmic priority than original Tweets or Blogs from the influencer's own account. Sometimes very significantly so. A promotion within an influencer's own Tweet would most often be preferable to an RT, given the choice.
TUTORING AND KEYNOTE
Anyone who's attained major financial success is able to command very high rates for tutoring, mentoring or delivering keynote speeches and lectures. An influencer, or their agent, can demand a one-off fee, up front, for any deal in which valuable, expert knowledge is going to be passed on. And there are two advantages to doing this in an offline environment.
One, the distribution of knowledge is limited to a small audience, who for competitive reasons are motivated to keep the info to themselves. So it's not like going online and giving away secrets to the whole world. The same secrets can be revisited with every new audience.
And two, there's usually a favourable return on investment, because the value is delivered live, in a very limited amount of real time. It's not like publishing, where there may be three days of writing, honing, fact-checking, legal clearance, etc, but then the article only takes 10 minutes to read. Live delivery only uses the same amount of the influencer's time as it does the audience's time. And each member of the audience pays a high rate for the privileged information. So although the audiences are relatively small, the economy can still be excellent.
INTERVIEWS
Although a lot of influencers will do high-publicity media interviews for free, they'll inevitably charge smaller or local media outlets that can't offer them a significant publicity payback.
With interviews, it comes down to who's doing whom the greater favour publicity-wise. If the interview offers the influencer a big boost in public awareness, she/he will probably do it for free. If the influencer is vastly more famous than the media outlet, the value is stacked in favour of the outlet, so the outlet would expect to pay for the boost to their public profile.
Exceptions to this can occur when an influencer is promoting a product, such as a book. An influencer may, for example, waive an interview fee on condition that they can promote their book during the interview. But the media outlet would still need to offer a fairly substantial audience to justify the influencer's time investment. Otherwise, the outlet would have to pay.
If the influencer gets this right, they can earn money and raise their profile in a single action.
MOUTHPIECING
Influencers may also have an occasional role in mouthpiecing. This is disseminating someone else's message as opposed to their own. For example, a brand in the throes of a PR crisis may pay an influencer to publicly voice support.
For the troubled brand, paying a really happening influencer to voice support can be incredibly effective in turning a crisis around. But it has to be a potent influencer - not one of those dudes with a million mutuals, and a bio that says “influencer”, but his Tweets only get two Likes. We're really talking about someone who's crossed the bridge into the celebrity ballpark here. And the cost? This is NOT, I repeat, NOT, going to be cheap. It can be a massive earner for a big influencer, because there's a reputational risk involved.
Some brands might instead pay a selection of smaller influencers to act as PR mouthpieces when they're under fire. For the brand, this could work out cheaper than paying one really major influencer, but it requires a good understanding of how to assess an influencer's influence, and in particular, into which areas their influence is likely to spread. Picking the right influencer(s) for mouthpiecing is a skill in itself.
MEMBERSHIPS
Fans can buy membership access to paywalled content streams like those found on Patreon. They can buy a premium membership on an influencer's forum. They can become a paid member of an influencer's personal website. There's a huge range of ways in which an influencer can add extra value in exchange for money.
TIERED UPSELLING
Influencers are normally very good at tiered marketing, which is a flight of upselling steps that keep the same people buying over and over again. It's akin to the concept of the TV companion show or spin-off, in that the tiered products being sold would not normally be of interest to anyone who hadn't already bought into the entry-point offering. For example, you wouldn't have watched Big Brother's Little Brother or Big Brother's Bit on the Side, unless you were already a fan of Big Brother.
Tiered upselling is a method of selling investment-light products, to people who have a known existing interest and a known willingness to part with money. By “investment-light” I mean products that can be produced without the influencer having to make another significant intellectual investment. For instance, if someone buys the influencer's book, they're offered a ticket to attend a signing event. If they buy the ticket they're offered a T-shirt to wear to the event. When they attend the event they're offered a mug that says “I was there”, along with the event details in smaller print.
Other tiered upselling systems work entirely through email or other forms of private messaging. At its most basic it's really just spamming people who already bought, and asking them if they want to buy more. But crucially, because tiered upselling only targets existing buyers, it doesn't run the risk of annoying the core social audience - most of whom will be avid supporters, but not financial contributors.
Homing in on major fans, tiered sales strategies can often generate high profit per unit without the influencer having to be personally involved at all. Whilst the influencer would be expected to attend their book signing event, they may have contracted the writing of the actual book to a fairly inexpensive ghost-writer, and the souvenir mug might cost 30p to buy in, but sell at £10. The purchases are often a lot more emotional than they are practical.
DONATIONS
The course of the past decade has set forward many new online business strategies, with “donations” becoming a major earner for some parties. Traditionally, we tended to think of donations as bail-outs for people in need. But the past ten years have taken the idea of the donation from a form of charity, into completely new territory where the recipients are frequently way more affluent than the donors. A classic influencer ploy is to cite the donations as being for “the cause”, rather than specifically for them.
Today, donations are often not even described as donations. You might instead hear or see phrases like “Support my channel”, or “Support our non-profit campaign”. But the 'supporter' is not getting anything they wouldn't get if they didn't pay, so it's really a donation. The implication may be that the channel or campaign will collapse without the 'support', and that the money is funding expensive background operations that no one sees. But many of these schemes are really just pots of no-strings cash for individual social influencers.
Some “non-profit” campaigns, indeed, are complete hot air, existing purely as a means to legitimise a donation stream, which does nothing more than pay the salaries of the people who run it. The money keeps flowing in because the campaigns are highly emotive, if basically unachievable.
Donations might go through GoFundMe or similar fundraising sites, but higher tier operators would more likely take them directly via a personal page - or perhaps integrate them into a Patreon membership. Clued-up influencers would probably not consider GoFundMe to be a good look. Donations are also a primary revenue source on some social platforms, such as Twitch.
DISPLAY ADVERTISING
Display advertising is a common revenue stream for YouTubers, who can earn commission from a ready-made advertising service, which displays on their videos. Like many influencer earning schemes, the payout only amounts to a living if the audience is very large, and the ads are relevant to the audience's interests. And influencers need to be very aware of the ad programme's rules on acceptable content types. If the influencer's message is “Here's why we should all hate on Group X”, for example, their ad account is probably going to be shut down pretty quickly.
The hate group influencer has gained a much bigger presence on the scene over the past half decade or so. Demagoguery is one of the easiest ways to become an influencer, because hate is just about the most passionate emotion on Earth, and being an influencer is about reflecting back passion. Despite social media's attempts to stem rabble-rousing, it hasn't abated at all, and in fact many of the efforts to ban major demagogues or mute certain subjects have only served to magnify the hatred. Making it more passionate, and thus more of a target for influencers. Mainstream display ads may be off the menu in this area, but donations, bookselling, follow drives and affiliate linking remain highly viable.
Even universally friendly influencers can't place conventional display ads directly on social media. But they can place display ads on their blogs, and push traffic to the posts via social media. They can also open forums and run display ads on those forums. But once again, incendiary topics of discussion will be incompatible with a mainstream ad programme's rules, so they either need to control discussion very tightly or find an alternative means of serving display ads.
AND THE REST
Believe it or not, this has only been a limited selection of the ways in which social media influencers make money. But armed with the above information you'll probably now be able to look at an influencer's social activity and work out what some of the others are.
And if you should become a magnificently successful one-person brand with the help of the above, I'll expect at least five free Retweets. And the mug, obviously.