Whether you love the concept of it or hate the premise of sharing snippets of your life online, social media continues to be a huge part of our lives. So much so that more and more people are making a career out of it.
For many, a career in social media is a pretty mind-blowing concept, but there are thousands who find the concept of being a successful social media influencer highly aspirational.
An “influencer” is now one of the most desired career paths for both children and adults. A Harris Poll study of 3,000 children recently found that in both the US and the UK, 30% would choose to be a YouTuber over a teacher, a professional athlete, a musician or an astronaut.
With the amount of people using social media on a daily basis, it’s not that hard to believe that so many want to dedicate a career to it.
As of this year, Tik Tok has 1.534 billion users, out of which 1 billion are monthly active users. Facebook has 2.9 billion monthly users, Instagram has 1.4 billion and YouTube has 2.5 billion. However, with so many users all with similar aspirations, it takes a certain personality to be able to break through into the world of social media and actually start to make money from it, rather than just be a standard Instagram user.
The top 5 social media platforms for influencer marketing are:
- Instagram (93%)
- TikTok (68%)
- Facebook (68%)
- YouTube (48%)
- Twitter (32%)
Across the different platforms, you can find different types of “influencer”, all with a specific niche – from fashion and beauty, to cleaning, organising and money saving. What started out through blogs, soon developed into video content on YouTube, then posts on Instagram, right through to short video content on TikTok and shared to reels on Instagram and Facebook.
Influencers fall into categories based on their reach:
– Nano-influencers: 1,000–10,000 followers
– Micro-influencers: 10,000–50,000 followers
– Mid-tier influencers: 50,000–500,000 followers
– Macro-influencers: 500,000–1,000,000 followers
– Mega-influencers: 1,000,000+ followers
The follower count, along with their engagement rate, niche, platform and the type of content they make, determines how much they can charge brands to work with them.
The influencer space was always going to get bigger and bigger, and during the pandemic we saw a rise in the new ‘TikTok influencer’, creating online content from home, which many of us consumed to a whole new level given the amount of spare time we found we had under lockdown guidelines.
Worldwide, more than 50 million people now consider themselves to be “influencers” or content creators, bringing the global influencer marketing market size to $16.4billion. With a huge cultural and financial momentum behind content creators, the industry will inevitably continue to grow.
But how exactly do influencers and content creators on social media earn money from what many started as a hobby?
How to earn money on social media
1) By featuring brand in their posts
Depending on a number of factors, influencers can charge as much as they deem fit to partner with a brand and create content about them and their products. This could be a one off post on Instagram, or a series of sponsored posts/videos including the brand over a set time frame.
Many content creators like to work with brands to earn money but also build up a reputation within the influencer marketing industry, opening doors for other potential partners to work with them.
To successfully work with a brand, influencers will be asked to meet a certain set of guidelines to meet the needs of the company. This can include:
– Personal experience with the products
– Authenticity
– Quality content
Before working with an influencer, a brand will ask for social media stats and engagement rates upfront to see the potential reach for their message, which will determine how much they’re willing to pay the influencer. Many influencers present this as a press kit or deck that highlights the key information, analytics and past collaborations that brands will want to see.
It’s important not to go too far with sponsored content though, as followers want to see organic, engaging content from the influencers that they choose to follow. 81% of people will unfollow accounts for posting sponsored content “more than a few times a week.”
2) Affiliate marketing
There isn’t quite as much money in affiliate programs as there is when collaborating with brands directly, but it is another way that influencers make money, especially if they have a large following.
Influencers can use affiliate links and unique referral codes when recommending products and services on social media. Companies then pay a commission for every sale that comes through via that referral. Sometimes this can be pennies, other times pounds, but enough leads can soon add up.
Affiliate marketing also includes discount codes for influencer’s followers to use.
Creating affiliate links with brands is a great way for influencers to build up a relationship with that company. If brands see a high level of traffic coming from a specific influencer, they are more likely to want to work with them more regularly, meaning the influencer can earn even more money from that partnership.
It is worth noting that not all affiliate programmes are the same, and some can cost to join. Each has a different fee and payout structure, so it is worth checking the guidelines to make sure a healthy commission can be earned.
3) Selling merchandise
When you build a loyal following on social media, it’s much easier to sell products to them. For a younger audience, this could be products with your name or logo on, which fans proudly wear to show their support.
For an older audience, it could be products to do with your niche. For example, cleaning influencer Mrs Hinch has partnered with P&G to bring out her own range of cleaning products in limited edition scents, and also has a hugely successful range of clothing and homeware with Tesco.
Social media is an excellent channel to promote products. These can then be sold by linking to a 3rd party Shopify site, or more recently, things are sold directly through Instagram or TikTok shop.
Creating your own merchandise doesn’t have to require extensive design experience and a lot of the time products are outsourced, especially for fulfilment and sending.
4) Premium services and membership
Making money by offering exclusive content is something that more and more influencers are doing. Social media is predominantly a free platform that consumers do not have to pay to use. However, certain influencers with different skills can make money by offering a premium service or membership.
This is particularly popular with fitness influencers for example, who can offer their services to tailor plans to individuals who want to pay for further information or guides. This could be on a one-to-one basis, or through an app for example, where everyone who pays can access the same exercises, tips and meal plans.
Membership programs can be either service-oriented or product-based, and is a great way to make money once you have that core audience to market your products to.
Social Media Influencer Accountants
Earning money online is still seen as a fairly ‘new’ way of self-employment, so navigating finances, tax and National Insurance can be quite complicated. At Gorilla, we offer an all-inclusive package for online entrepreneurs and social influencers who are earning money through YouTube and social media platforms.
From incorporating your new company and creating business bank accounts to arranging tax returns from monetised payments, we’ve got you covered for a monthly fixed fee of £110.
A lot of influencers earn money online alongside their full time wage, which can also make things confusing. We offer a wealth of simple, transparent accountancy services designed with the new world of social media influencers in mind.
You will be allocated an expert social media accountant to help you maximise your tax returns, help with claiming expenses and ensure you only pay what you have to.
You’ll also have full access to FreeAgent – one of the world’s leading online accountancy software. This can help you keep up to date with your business finances on the go, wherever you are.
As a social media influencer or content creator, having an accountant is an absolute necessity due to it being such a relatively new concept. HMRC guidelines are still a grey area due to this, so gaining all the guidance you can is important.
Sounds good? Get in touch via our online form, or call us on 0330 107 9678 for more information.
