With the advent of social media platforms and various new digital technologies, the creator economy has become a promising sector for creatives and influencers.
What is the Creator Economy?
The Creator Economy consists of bloggers, vloggers, social media influencers, and podcasters who create and promote content online and in turn, earn revenue from various streams.
It has gained immense popularity, is growing very fast, and has become the livelihood for millions of influencers worldwide.
According to SkyQuest Technology, the “influencer Market was valued at USD 13.3 Billion in 2021. It is expected to reach a value of USD 109.37 Billion by 2028, at a CAGR of 35.12% over the forecast period (2022 – 2028)”.
A report published by Hootsuite, (a leading social media management platform) titled “How Much Do Influencers Make in 2023” provides an overview of the impact of the creator economy on influencer earnings.
The report summarises the massive upsurge in business that has resulted from the increasing use of social media platforms by individuals.
It highlights how influencer marketing has become integral to brands’ and companies’ advertising strategies.
In addition, the report provides insightful information on various factors that affect influencer revenue, such as the size of their audience, their engagement rates, and the type of content they create.
The report is an all-inclusive study that provides a nuanced and comprehensive analysis of the creative industries and their impact on influencer revenue and provides a solid foundation for understanding the fast-growing industry and its potential future.
Based on the report, this article discusses and examines various aspects of influencer income, such as brand deals, affiliate marketing, sponsored posts, and other influencer-earning strategies.
Overview of Influencer Earnings
Influencers can step up their game with the help of brand deals and affiliate marketing in the industry by working with reputable brands and companies, enhancing their credibility and authenticity.
Also, brand deals and affiliate marketing are two of the main avenues of revenue for influencers.
Brand deals are partnership deals, where influencers earn money to endorse a brand’s services or products.
On the other hand, influencers can make money with affiliate marketing by promoting a product or service and boosting sales through their unique affiliate links.
With the rise of social media platforms like Instagram, YouTube, Snapchat, and TikTok, influencer marketing is an excellent tool for advertising and marketing for brands large and small.
Read Grin’s study on “9 Brands Who Nailed Influencer Marketing and Got Amazing Results” here.
And for this reason, Brand Deals have become a lucrative source of revenue for influencers.
What is a Brand Deal?
A brand deal is when an influencer advertises the brand’s product or service in exchange for compensation, either in monetary terms or in goods, on his/her social platforms.
Promotion varies by application. It can be an Instagram story/post or reel, blog, YouTube video, or all of the above.
According to Hootsuite’s report, the average income of influencers is determined by several factors, including the reach and influence of their accounts and the number of followers they have.
But, unlike other revenue streams, brand deals often offer influencers a chunk of money.
Hootsuite’s report highlights some of the latest brand deals/partnerships trends.
According to the study, brands are shifting their focus from macro and mega influencers to nano and micro-influencers as they are believed to have a more engaged and loyal audience.
Second, according to the report, brands are now looking for influencers with long-term collaborations to promote their products or services over a longer period of time.
Who are considered Nano, Micro, Macro, and Mega Influencers, and how much do they make?
Nano, Micro, Macro, and Mega influencers are categorized according to their follower counts.
Check out the following image about Hootsuite’s criteria for categorizing these influencer tiers –
Image Source – Hootsuite
According to Statista, a nano-influencer can earn $195, while a mid-tier and macro-influencer can earn up to $1,221 and $1,804 per post, respectively.
According to data published by Influence.co, micro-influencers and mega-influencers on Instagram can earn an average of $208 and $1,628 per post, respectively.
The average income earned on TikTok, an emerging platform, differs from that of Instagram and YouTube.
According to sources, a nano influencer may earn up to $181 for each TikTok video, while macro and mega influencers can earn up to $531 and $1,631 respectively.
To partner with brands, specializing in a niche is one of the most used strategies used by influencers where they make content on a particular area of expertise, such as beauty, fashion, technology, travel, or others.
Building a strong personal brand is another strategy that can assist influencers in securing brand deals.
An influencer’s unique content and style further entice brands to collaborate more since they create enthusiasm among their audiences and boost the probability of their sales.
Overall, brand deals are the most stable source of revenue for influencers of all sizes, from nano to mega.
Brand deals allow influencers to grow, understand, and earn at the same time while they are in the industry.
Check out the Influencer Rate Map published by Influencer.co below –
Image Source – Influencer.co
Affiliate marketing, after brand deals, is another profitable way to generate income in the creator’s economy.
Influencers generate income through commissions for each successful transaction made through their unique affiliate links.
Also, the brand deals method is purely a marketing strategy for brands, while affiliate marketing guarantees sales and marketing.
When an influencer promotes a brand’s products, both parties benefit as the influencer receives a commission and the brand makes sales and gains new customers.
Influencers can have a significant impact on consumer behavior and their buying strategy.
As influencers build their community over the years, customers tend to develop a sense of affinity and trust, thus increasing the brand’s sales through their recommendations making affiliate marketing a valuable tool.
Because affiliate marketing is completely success-based and results-driven, it has become one of the most widely used tools for brands and businesses to advertise and promote their products and services.
According to Hootsuite’s report, affiliate marketing has become an integral part of the marketing mix.
Hootsuite’s report further elaborates on affiliate marketing as a go-to approach for almost 80% of brands.
Further, the report reveals the potential influencer earnings generated by affiliate marketing.
Check the below-mentioned stats from Hootsuite –
“Instagram influencers generally make 5-30% commission in affiliate marketing contracts, with bigger influencers starting in the 8-12% range.” Source
Earnings depend primarily on various factors, such as the number of followers an influencer has and the number of brands the influencers work with.
As per a report published by Linktree, Affiliate marketers can earn six figures per month on average!
There are a variety of strategies influencers can employ to excel in affiliate marketing.
One primary and most effective strategy is to work with brands that align with their interest and niche.
Such collaborations positively impact the overall quality of the content created, as influencers genuinely believe in the product they are promoting and are transparent with their reviews.
This also helps build trust with the audience and ultimately results in increased purchases via the influencer’s affiliate links.
In addition, creativity and authenticity play a vital role in persuading the audience to proceed further with the purchase.
Influencers leverage their own creativity, style, and ways of making content more engaging and informative by creating videos, reels, and captivating TikTok.
Affiliate marketing works wonders when audiences have a high level of confidence in the influencer’s opinions and thoughts regarding the products and services.
Other Influencer Earning Strategies
Influencers use many other strategies to increase their income rather than relying solely on brand deals and affiliate marketing.
Sponsored posts, merchandise sales, and product launches are other ways to accelerate an influencer’s income and help build a strong and sustainable career.
And Hootsuite’s report includes stats for all of these strategies.
But first, let us briefly look at how some of these methods work.
Sponsored posts are a popular way for influencers to make money.
A sponsored post is when an influencer gets paid for creating content for the brand’s products and services.
To ensure transparency, such posts are often labeled as “Paid Partnership” or “ad” to let their audience know.
The revenue generated by sponsored partnerships can be substantial.
However, it depends on certain factors, such as the number of followers, as this indicates the reach and effectiveness of the influencer and the advertising.
Secondly, the earnings also vary depending on the niche type.
As per Hootsuite’s report, Influencers with larger followings often make more money as compared to Nano and Micro-influencers.
However, due to the rapid growth of markets smaller brands that operate on limited budgets seek to collaborate with small-scale influencers.
In addition, merchandising is another way of earning revenue for influencers.
Merchandising is associated with producing and selling their own products such as clothes, accessories, or products within their niche.
According to Hootsuite’s analysis, merchandise sales are becoming immensely popular as an income stream.
Subscriptions, tips, and direct donations are also a few of the ways in which influencers can make passive income.
With subscriptions, you pay a fixed amount for access to their content.
Most influencers offer discounts on their merchandise or freebies to those who subscribe.
Tips are a one-time donation, rather than a bonus from followers.
Donations are given in the form of charity.
Furthermore, major platforms like Instagram, Facebook, Twitter, and TikTok facilitate tools and programs to enhance influencer earnings.
Instagram monetization offers collaboration with brands, and affiliate marketing, through sponsored posts or the new Instagram feature of subscriptions.
Meta recently launched “Creator Studio” that enables influencers to “earn more with music revenue sharing”.
Hootsuite’s report highlights all of the above strategies to succeed as an influencer in the creator’s economy.
It highlights the importance of sticking to your creativity and authenticity to stand out and earn a decent income.
At first, it is difficult to gain the trust of the audience, but over time it is very lucrative.
By diversifying the sources of income, an influencer can build a strong personal brand and expand significantly.
Hootsuite’s report on “How much do influencers make in 2023” provides insightful information about the current state of the creator’s economy.
The reports also highlight the rising phase of Nano and Micro-influencers in the market and various different strategies to earn and sustain as an influencer.
As per Linktree’s report around 200 million people contribute to the creator’s economy, and is expected to grow significantly over the years.
According to the audience’s preferences, niche content will flourish and will continue to grow, as it engages directly with the people.
Overall, Hootsuite’s report enlightens its readers on the relevance of influencer marketing in the current times as well as the benefits it provides to brands to promote their products and services.
Also, it provides insightful information about the latest trends and tactics driving influencer earnings.