Rise of the Instagram Influencer

Want create site? Find Free WordPress Themes and plugins.
Rise of the Instagram Influencer

By Cara Kelly via USA Today

Instagram influencers can make up to $100 for every 10,000 followers per sponsored post.

The Instagram influencer as a species is easy to spot.

Defined by their large social media followings, content from this class of marketers is typically awash with the flossy trappings of young money: trendy designer outfits modeled in exotic locations; marble countertops under carefully crafted flat-lays of pricey beauty products. Even the Instagram mavens with a grittier, every-girl style, all Polaroid grunginess, are dotted with on-brand T-shirts perfectly half-tucked into the hot jeans du jour.

It’s enough to make even the most over-stimulated perusers pause and say, “How much are they making off this, exactly?”

The answer, if they play the game correctly, is a lot. 

A wealth of jaw-dropping figures emerged in 2018, from makeup vlogging virtuoso Jeffree Starr’s reported $18 million in yearly earnings, to fashion blogger Chiara Ferragni’s wedding, elaborately chronicled with the hashtag #TheFerragnez, which garnered a whopping $36 million in Media Impact Value for her partner brands.

“You can’t toss a rock in New York City without interrupting an Instagram shoot,” said Brittany Hennessy, author of “Influencer: Building Your Personal Brand in the Age of Social Media,” and former director of Influencer Strategy and Talent Partnerships at Hearst Magazines Digital Media.

That’s particularly true this week as New York Fashion Week wraps up, seeing influencers rub elbows with fashion editors and buyers at designer shows and parties across the city.

“There’s lots of money at play. These girls make so much money. There are families of four who make $20,000 and girls can clear that in two campaigns.”

The most successful influencers can command more than six figures for brand campaigns, but even those just starting out can earn a couple hundred to a few thousand dollars.

Why? Technology and consumerism have changed. Ad blockers are eating away at traditional digital marketing, such as banner ads and video pre-rolls. TV commercials aren’t reaching Millennials and Gen Zers who long ago cut the cable cord. Phones, influencer’s native habitats, are everything.

Brand spending on influencer marketing is expected to hit $101 billion by 2020, according to a study from the Association of National Advertisers and PQ Media. That’s up from $81 billion in 2016. Of brands surveyed, 75 percent said their company is currently using influencer marketing, and 43 percent of that group said they planned to increase their budgets in the next year.

The result is a gold rush in the form of street style pics and #mirrorselfies.

Influencer math: How many likes to a $100K contract?

Rise of the Instagram Influencer

The economics behind the Valencia filters can be elusive. Influencers and brands are exceedingly tight-lipped about the ins-and-outs of individual contracts, leaving audiences without a firm grasp of just how much went into that strategically placed Fendi baguette.

Most standardized price structures, USA TODAY found, start with follower counts.

An industry rule of thumb, verified by USA TODAY through interviews with nearly a dozen influencers, marketing professionals and influencer platform founders, is a baseline rate of around 1 percent of follower counts per sponsored Instagram post, or $100 for every 10,000 followers. Meaning someone with 100,000 followers might start around $1,000 per sponsored post, while an influencer with one million followers could charge $10,000. And some experts called that conservative.

“If you only do one a month you’re making $100,000 a year. That’s a lot more than most of these girls were making at their full-time job,” Hennessy said.

Rise of the Instagram Influencer

(Lindsay Silberman in Mexico)

Lindsay Silberman, who has more than 140,000 followers on Instagram, left her full-time position as an editor at Town and Country magazine in October to focus on creating her own luxury lifestyle content. The tide turned around at the 100,000-followers mark, she said, typically considered the “made it” moment for influencers.

“I was getting offers from brands more and more often,” Silberman said. “I got to the point where it would have been fiscally irresponsible not to pursue it.”

After the first several months, she says she’s on par to break six figures for the year and clear her previous salary.

Rates are also determined by factors beyond follower count, including engagement, quality of content, audience demographic and name/facial recognition and skillset, said Hennessy.

In her book, Hennessy provides a sample breakdown that starts with $250 to $2,000 for a sponsored Instagram post for influencers with follower counts of 10,000 to 99,000, and goes up to $7,500-plus for follower counts of 1 million and up.

Captiv8, a platform that connects influencers to brands, has a similar baseline for clients that starts with $8,000 for a sponsored Instagram post for influencers with 500,000 followers or under, increasing to as much as $75,000 for 3 million to 7 million followers.

“Some influencers do sponsored content quarterly. Their content is so good, and engagement is so high, they can charge $30,000 for an Instagram post,” Hennessy said.

Engagement. That’s where you come in.

A dollar for your thoughts

Every time you decide to add yourself to an influencer’s million existing followers, you’ve given that #blessed creator about $1 per campaign in future earnings. Add another if you frequently double-tap or tend to leave comments filled with fire emojis. A message about wanting to try that drink / lipstick / type of denim pictured? That’s the stuff of brands’ dreams.

As companies have become more savvy to the social media sphere and wary of bots and fake followers, engagement has emerged as a desired measure.

Rise of the Instagram Influencer

Along with pricing structures based on follower counts, CPEs (cost per engagement) have emerged as another way to calculate marketing rates. Engagement is typically defined by interactions with content such as likes, comments, clicks or shares. Engagement rates can be found by adding up all engagements on a post, dividing it by follower counts and multiplying by 100.

Hennessy equates the audience element to buying an album from your favorite musician. If you love their content, “you gotta like it, comment, share it, do all of the things because that’s how advertisers will see that she’s successful. … That’s how they’re making their money and that’s how they can keep doing this work.” 

The micro-influencer next door

The shift in priorities from reach to engagement has opened the floodgates for content creators who may not have the same scale but have found a specific niche, dubbed micro-influencers.

Influencers like Angela Davis, who started the food blog Kitchenista Diaries in 2012 and has 58,000 followers on Instagram, tend to have higher engagement and a more intimate connection with their audience. Davis’ 80,000 Twitter followers respond to her by the hundreds with the hashtag #kitchenistasundays, inspired by her Sunday night dinners.

“Now it’s more than I can keep up with,” Davis said. “Dinner parties, public ticketed events, that all spun off from that one hashtag.”

After unexpectedly losing her accounting job in 2014, Davis turned to food blogging and private catering full time. Nearly five years in, her self-published cookbooks account for more than 50 percent of her income. And she’s seen more emails and diverse opportunities from marketing agencies in her inbox in the last year. In December, Royal Caribbean paid for her to go on a seven-day cruise to highlight their dining options.

“My work with Royal Caribbean was specifically because of how engaged my audience is,” Davis said. “They really noticed, ‘You actually talk to people and are having conversations on a daily basis.'”

Rise of the Instagram Influencer


(Angela Davis, creator of The Kitchenista Diaries, posing for a selfie.)

Brand payouts

The advantages for brands seem obvious: direct access to target audiences for a fraction of what they’d pay in the traditional space.

Content creators routinely value their work at a much lower rate than marketing professionals expect to pay, according to marketing software company IZEA. In 2018, marketers surveyed said they estimated paying more than $3,000 for a sponsored video, while content creators expected to charge $471.

Because influencers bake the creative costs of producing advertorial content into their fees, even the high end of influencer rates can seem like a deal.

“You have to recognize that for a marketer to get that same photo from an ad agency, they’re going to pay 10 times that,” said Ted Murphy, founder and CEO of IZEA. “When someone from an ad agency takes a picture, they’re paying a food stylist, paying people for a recipe, shooting location, a photographer, a project manager and photographer rights. That’s why there’s still a lot of room for growth here.”

Rise of the Instagram Influencer

And ROIs can be as much as 11 times that of traditional digital marketing like banner ads, Nielsen Catalina and influencer marketing platform TapInfluence found by tracking in-store sales through loyalty cards.

Much of that is directly attributed to the look and feel of sponsored posts, and the way they seamlessly blend with an influencer’s organic content.

“A lot of these brands that are spending money with influencers are also spending money on paid media. And these brands are seeing much higher engagement rates, much higher ROIs on influencers, because content the influencer is creating is not looked at as an ad, it’s very much look at as content,” said Krishna Subramanian, co-founder of Capitv8. “People recognize the individual within the content as much more authentic and that’s what’s really driving that ROI.”

Platforms that connect influencers with brands (and vice versa) back up the effectiveness. IZEA’s State of the Creator Economy report found that one in three consumers have purchased a product after seeing it used by an influencer. According to a 2017 study by Olapic, an influencer marketing platform, 31 percent of consumers said they have purchased a product or service based on a social influencer post.

But calculating exact returns can be tricky. Native platforms like Instagram provide only certain metrics, which don’t get at conversion rates.

“What they don’t show is how many people went into a store to make a purchase based on the influencer’s recommendation, or how many people bought the product or booked the hotel at a later time,” Silberman said.

Silberman says she screenshots direct messages from followers who buy $300 face creams or five-day honeymoons based on her recommendations.

Dannia Hakki, founder + CEO of MoKi Media, a boutique PR firm, said it’s now routine to include social media placements in press reports to clients, right next to outlets like The Washington Post and Conde Nast Traveler. But some things, like highly effective word-of-mouth referrals, are impossible to capture.

“I recently overheard two people at a party talking about checking out a venue we represent, in which the client gave us an entire budget to pay a list of social media influencers. One of them said, ‘Do you follow @narrativeofnic? She posted about that new bar. It looks so cool, we should check it out.’ I couldn’t believe my own ears.”

Influencers are supposed to disclose sponsored content.
But …

The idea that influencers are authentic, and that the products they promote are recommendations, not ads, is the lynchpin of influencer marketing. It may also be its undoing.

Fyre Festival, the ill-fated “greatest party that never happened,” is often cited as the ultimate example of this dynamic. The 2017 event – back in the news this year after the release of two documentaries, Netflix’s “Fyre” and Hulu’s “Fyre Fraud,” – was promised to be a luxury experience before it’s epic implosion from mismanagement and fraud.

Organizers paid a bevy of celebrity influencers to shoot extravagant promotional material and spread the word on social media, including a reported $250,000 Instagram post from model Kendall Jenner. Most did not follow Federal Trade Commission guidelines that require sponsored content to be clearly labeled as such, and have resulted in ongoing legal battles.

The FTC issued educational letters to 90 influencers in 2017 reminding them to follow the guidelines for disclosing endorsements. It sent 21 of those a follow-up warning letter citing specific posts that broke compliance. The impact on influencers who do not heed the FTC’s warning could be dramatic, experts warn.

Because influencers build their audiences and reputations on content perceived to be authentic, their followers expect that they are true supporters of the brands they pitch and will disclose when a monetary action is involved.

“From the consumer perspective, it’s really challenging because the disclosures for most people aren’t very clear and ultimately that erodes the trust with the creator and erodes the trust with the brand,” said Murphy. “That’s the whole trick to this space. If all of a sudden there’s no trust between consumers and people producing this content then overall effectiveness is going to plummet and there will be no opportunity.”

Murphy says they’re still seeing 30 percent of marketers asking influencers not to disclose sponsored content. In their State of the Creator report, they also found two in three consumers might unfollow an influencer if they suspect them of not disclosing a paid relationship.

“There are a lot of people skirting the rules right now that don’t understand the long-term implications of what they’re doing,” Murphy said.

Every influencer who spoke with USA TODAY stressed the importance of authenticity with their audiences, particularly when it comes to sponsorships.  

“I make a point of being as transparent as possible with my followers about everything influencer-related because there’s so much mystery surrounding this business,” Silberman said. “During a Q&A on my story, someone asked me what influencers get paid for a post – I thought about just telling everyone what my rates are for the sake of being honest, but I also didn’t want to limit my ability to negotiate for future deals.”

Silberman says some brands are solely looking for quick hits. She turned down a skincare company she was unfamiliar with that didn’t want to wait for her to test their products before completing the deal.

“To me, it just felt like a transactional, inauthentic exchange.”

Many influencers interviewed said they’ll only work with companies whose products they like and use without payment.

Jeanne Grey, who started her blog The Grey Layers in 2011 and now has 470,000 followers, said she saw success after learning to say no.

“I started seeing growth when I really found my aesthetic and mastered what kind of brands we wanted to align ourselves with, instead of saying yes to everything,” Grey said. “Initially it was like, ‘Everything works for us!’ But no, that’s not necessarily true.”

The Holy Grail: Real money moves, then your own brand

Influencers say developing long-term relationships with brands not only builds audience trust, but it’s also where they can make real money moves.

“I would call it working smart instead of working harder. Better in quality instead of volume,” Grey said.

Brands often restrict influencers they’ve partnered with from subsequent work with their competitors, but if that exclusivity is costing the influencer potential deals, she can use it to negotiate an increase in her contract.

“If they’re being offered $10,000 to do a Revlon campaign, then that means they can’t work with competitors Almay or Covergirl. So you’re like, ‘well, off of all of these brands I normally work with I’m going to lose $50,000 in the next six months.’ Now that brand has to pay you an extra $30,000,” said Hennessy.

Influencers can also charge more depending upon the length of time brands want to use their content and how they use it. If that brand wants to turn a video from the influencer into an ad on TV or in stores, and run it for several weeks, that’s an additional cost.

“If she was only charging $10,000 for campaign, then you add in usage and exclusivity, and she could easily walk away with $80,000.” 

At the very top of the influencer pyramid sit traditional endorsement campaigns and ambassadorships, the likes that have long kept actors well-heeled as they pursue less lucrative passion projects. Those can include print ads, billboards, in-person appearances, TV commercials and the like.

In 2017, Bare Minerals reportedly paid more than $500,000 for beauty YouTuber Ingrid Nilsen to be the face of two flagship foundations – one of the largest known contracts between a blogger and brand at that time, according to Women’s Wear Daily. Hennessy says she wouldn’t be surprised if Nilsen could charge $1 million today.

Those types of deals represent the gold standard but are still few and far between.

“We may do, like, four of those every year,” said Lisa Filipelli, manager for vlogger Amanda Steele and a partner at Select Management. “They’re really hard to get.”

Steele started on YouTube when she was 11, signed with Filipelli at age 13 and now has 2.7 million YouTube followers. She’s been the face of a Bulgari fragrance, worked with Marc Jacobs on watch and perfume campaigns, and starred in an American Eagle campaign.

“I’d compare Amanda to, not top billed A-list movie star money, but it’s comparable to a working actor,” Filipelli said.

And like many actors, Steele says those campaigns allow for her passion project: her own fashion line, Steele, which she launched just weeks ago.

Such trajectories represent the pinnacle for many influencers – an ironically analogue end-game to their digital journeys. 

“The holy grail for an influencer is picking a vertical niche, becoming someone who really understands the space and launching your own brand,” said Subramanian. “If you’re an influencer and you want to win the Superbowl, it is launching your own brand and having it be successful and selling to a L’Oreal.”

All of the influencers who spoke to USA TODAY expressed similar end-goals that have little to do with the digital spaces where they started.

Angela Davis is working towards a brick-and-mortar location where she can host events and live cooking classes.

Grey is looking to write a book, create a lifestyle product and partner with a store like Target or Sephora.

“A platform is just a platform,” Grey said. “I think doing this for other brands we’ve realized, ‘hey, we can be a brand, too, and do this for us.’”

Don’t quit your day job, yet

Influencing may sound like a sweet gig, but many influencers say they work harder and longer hours than they did in their salaried jobs.

“I’m tracking my screen time and it’s about nine hours a day, on good days it’s about eight,” Grey said.

Influencers told USA TODAY they spend entire days responding to comments and direct messages and providing recommendations like their favorite products or travel tips.

Some, like Silberman, rely on their husbands and partners to help handle the workload and take photos. Grey’s husband quit his full time job last year to work with her.

And though brands are increasing their influencer budgets, IZEA found that there were still more content creators than opportunities in 2018.

“A lot of content is uploaded to YouTube every day. Getting through the noise is really hard,” Filipelli said. “When I started out there were only two people with millions of subscribers, now it’s thousands.”

One billion hours of video are watched daily on YouTube, while Instagram users post more than 95 million pieces of content a day. There are no statistics on how many influencers are currently out there, Hennessy said, but she can no longer keep up.

“Every day I see a ton of new influencers, and I’m someone who that’s all I follow.”

The gold rush shows no signs of stopping, said Fred Cook, director of University of Southern California’s Center for Public Relations. He notes there’s even a cottage industry springing up around influence, including startups like Wildlink that allow anyone to earn commission off their recommendations.

“Some day we may all be influencers and this may be one giant marketplace. We’ll all be talking about products and services and being reimbursed for that in one way, shape or form,” Cook said. “I think it’s just the beginning.”

Did you find apk for android? You can find new Free Android Games and apps.

LEAVE COMMENT