If you’re one of the 3.5 billion social media users around the world, you’ve likely experienced content created by a social media influencer, even if you don’t know what a social media influencer is. Social media influencers are present on every platform and interact with users in a myriad of ways including memes, videos, posts, and blogs.
By definition, a social media influencer is a user on social media who has established credibility in a specific industry. Credibility is often reflected through their content and, equally as important, the amount of followers they have. The “follower count” metric determines the level or tier of social media influencer they are considered by the industry experts. This is especially important when it comes to securing brand deals. More on that later.
Considering the reach of social media (45% of the world’s population) the marketing potential seems obvious. However, it became evident that traditional media marketing would have to evolve to maintain relevance. Hence, the social media influencer was born.
How do social media influencers make money?
Social media influencing is a relatively new form of marketing that utilizes the many (and evolving) online social media platforms. From as far back as 2005 (which, considering how fast the internet has grown, is a long, long time ago) ad companies were eyeing this new website called YouTube. Just a wee little video player back then, YouTube was virtually ad-less. Now, in 2020, according to Verge contributor, Julia Alexander, YouTube (a Google owned company) is reporting that they have earned $34 billion in ad revenue alone over the past three years.
Clearly, there’s money in the social media world. But just how much of it is generated through social media influencer marketing? Some data indicates that this new ad tactic is a $10 billion industry as of this year, and it’s only positioned to grow. Here’s how it works:
Once a hopeful social media influencer has established themselves as such through their content, niche positioning, and/or follower metric, they will begin to attract brand endorsements. Brands will pay per post for the influencer to endorse the product or brand. Prices range widely across the board as a set standard for the industry has not been established due to its exponential growth. For nano-influencers, $50 and free merchandise may be enough. For macro-influencers, the price for a post may be anywhere around $10,000.
What types of social media influencers are there?
Social media influencers come in all shapes and sizes. If a product exists, there is likely someone who is promoting it through social media content. There are bloggers, vloggers (bloggers who use video as their main medium), fitness models, lifestyle coaches, brand ambassadors, and thought leaders. What ties all of these influencers together, however, is their claim to be a subject matter expert in their primary niche.
Furthermore, there are specific tiers of social media influencers that are typically indicated by follower count. For example:
Nano-influencers typically have between 1,000-10,000 followers. Their primary medium is Instagram and they tend to have hyper-specific content tailored to a unique viewers cohort. Brands initially gravitated towards influencers with high follower counts, but as different demographics of viewers started to define their social media preferences (i.e. preferring more organic content over superficial content), brands started noticing nano-influencers.
This shift is also due in part to engagement rate. More followers doesn’t necessarily mean a higher engagement rate. In fact, according to the 2019 State of Influencer Marketing Report, the engagement rate for influencers with 1 million or more followers was 1.97%, while the engagement rate for nano-influencers came in around 5.6%. This higher engagement rate gives brands a unique opportunity to reach viewers in an authentic way.
Micro-influencers are considered the tier above a nano-influencer and they tend to have between 10,000-50,000 followers. Similar to nano influencers, they are often more knowledgeable in their particular niche than influencers in higher tiers. Their followers tend to trust them and rely on their content for information regarding specific subject matter. Because of their tier, micro- influencers are oftentimes favorites of small brands. They have a devoted following and their post rate can be as low as $50.
With between 50,000-500,000 followers, mid-tier influencers accommodate the space in between nano and micro-influencers and mega and macro-influencers. This tier of influence is often the tier where personal engagement gets traded for followers. Where nano and micro-influences tend to have personal relationships with many of their followers, mid-tier influencers have enough followers that the selling point for brands is the follower count metric rather than the engagement rate. Mid-tier influencers can start to secure brand deals in ways that are often not accessible to nano and micro-influencers.
This is because, through trial and error, mid-tier influencers have learned what kind of quality posts it takes to grow their follower count. They typically have well edited photos and a curated feed that feels polished, yet relatable. Because they have not yet reached the macro or mega levels, they still are affordable for brands and oftentimes easier to work with due to their lack of celebrity status.
Macro influencers have between 500,000-1 million followers. At this point, it is a given that the personal engagement and relationship between influencer and follower has dissolved. The main draw towards macro-influencers for brands is the follower count. Because, at this influencer level, influencers are recognizable and starting to become “famous,” brands can have more demands for the influencer. Their post price is much higher than that of a nano or micro influencer thus may require more specifications from the brand.
Mega influencers have over one million followers. While engagement rate at this level may be lower, one million followers means a lot of eyeballs on posts. Social media influencers with over a million followers can charge over $10,000 for a single post. However, this price range can vary widely as there is no real industry standard for what influencers can charge. Influencers at this level have a near-celebrity following and have diversified their revenue streams through various channels and social media platforms.
What types of content do social media influencers make?
Social media influencers make all sorts of types of content. However not all social media experts make all types of content. Some specialise solely in Instagram content, while others make long form content like blogs or video series. No matter the platform, there are influencers using it for promotional purposes.
Do influencers have to disclose that they are advertisers?
Like all advertising, social media influencers must follow Federal trade commission (FTC) guidelines. This means that the advertisement must indicate that it is an advertisement. In 2019, the FTC updated their disclosure policy for social media influencers included some best practices for disposing advertisement.
Influencers are sometimes hesitant to disclose that their content is an ad for the sake of seeming inauthentic. However, the FTC is clear that all advertising content must be disclosed as an ad for the sake of transparency and competition.
What does it take to be a social media influencer?
Like any freelance profession, success requires dedication and passion. If you loathe being on social media and hate the thought of thousands of people taking your referrals seriously, social media influencing is probably not the right calling for you.
Social media influencing can be demanding and earning consistent income is not to be expected. However, depending on their tier of influence, influencers do it as a side hustle, or–as they grow–do it for the freedom of creating their own content and setting their own schedule.
What does the future look like for influencers?
Many digital marketing experts would agree that the future of social media influencing relies heavily on micro influencers and monogamous influencers–that is, an influencer who is solely promoting a single product. According to famed social media influencer Gary V, social media influencers are running into an issue with the economics of the industry: “There’s a supply and demand issue. It turns out there’s a lot of attractive people. Turns out there’s a lot of funny people. It turns out that there’s a lot of smart people. When you can choose from 700,00 fitness models to promote your muscle milk, all of a sudden you gotta change the economics.” For brands and social media influencers, signing contracts instead of buying ads ala carte might negate the initial freedom that was attractive about the practice in the first place. But with so many utilizing the marketing tactic, it seems that may be the way of the future.
Should my company invest in social media influencing?
If you are considering adding social media influencing to your ad budget, it is a good idea to spend time choosing the right one. Some digital marketing firms offer finding influencers as a service as it can be difficult to wade through the growing pool of nano and micro-influencers to find the right one to represent your brand.
Selecting an influencer requires balancing engagement rate over follower view, and making sure that you don’t alienate any part of your customer base by selecting an influencer that doesn’t resonate. However, with the talent pool as large as it is, it’s nearly certain you’ll find the right influencer for the job.
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