USA TODAY International Edition
Instagram ‘influencers’ follow the money
The Instagram influencer as a species is easy to spot. Defined by large social media followings, these marketers produce content awash with the trappings of young money: designer outfits modeled in exotic locations; marble countertops under flat-lays of beauty products. It’s enough to make the most overstimulated social media user pause and wonder, “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 vlogger Jeffree Starr’s reported $18 million in yearly earnings, to fashion blogger Chiara Ferragni’s wedding, hashtagged #TheFerragnez, which garnered $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,” says 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.
“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.”
Why? Technology and consumerism have changed. Ad blockers eat away at traditional digital marketing, such as banner ads and video prerolls. Television ads don’t reach Millennials and Gen Zers who long ago cut the cable cord. Phones, influencers’ native habitats, are everything.
Brand spending on influencer marketing is expected to hit $101 billion by 2020, up from $81 billion in 2016, according to the Association of National Advertisers and PQ Media. Of brands surveyed, 75 percent say they’re using influencers, and 43 percent of that group plan to increase their budgets in the next year.
The result is a gold rush in the form of street-style pics and #mirrorselfies.
Influencers and companies are tight-lipped about the ins and outs of contracts. Most standardized rates, 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.
That means someone with 100,000 followers might start around $1,000 per sponsored post, while an influencer with 1 million followers could charge roughly $10,000.
“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 says.
Lindsay Silberman, who has 140,000 Instagram followers, left her job as an editor at Town and Country magazine to create her own luxury lifestyle content. The tide turned around the 100,000-followers mark, she says.
“I was getting offers from brands more and more often,” she says. “I got to the point where it would have been fiscally irresponsible not to pursue it.”
Hennessy says rates are determined by factors beyond follower count, including quality of content, audience demographic, name recognition and engagement.
Every time you 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 comment about wanting to try that drink or lipstick.
As companies become more wary of bots and fake followers, engagement (likes, comments, clicks or shares) has emerged as a desired measure. CPEs (cost per engagement) are now another way to calculate rates.
The shift in priorities from reach to engagement has created opportunities for 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 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.
“It’s more than I can keep up with,” Davis says. “Dinner parties, public ticketed events, that all spun off from that one hashtag.”
Five years after dedicating herself to food blogging, her self-published cookbooks account for a majority of her income and she’s hearing more from marketing agencies. In December, Royal Caribbean paid for her to go on a cruise to highlight its dining.
Most influencers are one-man bands, juggling content creation with traditional office work like reviewing contracts, communicating with brands, managing invoices and tracking data. Many say they work longer hours than at the jobs they had before. Competition is fierce.
“A lot of content is uploaded to YouTube every day. Getting through the noise is really hard,” says Lisa Filipelli, a partner at Select Management who manages vlogger Amanda Steele, who started at age 11 and now is followed by 2.7 million people.
“When I started out there were only two people with millions of subscribers. Now it’s thousands.”