If I told you a decade ago that a spin bike would be a social community, you’d have had a good laugh. But that’s precisely what Peloton is: A spin bike with a social community where the instructors are the influencers.
Peloton is just one example of how social is being integrated into every aspect of the customer experience in an increasingly digital world. Whether it’s considering a new restaurant to check out, a movie to see or a product to buy, most people look at reviews before making a final decision. They want social proof as an indicator of quality and relevance.
Influencers are a natural byproduct of this desire for social validation, and as social permeates the customer journey, creators have become an essential source of validation and trust.
Influencers are a natural byproduct of this desire for social validation, and as social permeates the customer journey, creators have become an essential source of validation and trust. Indeed, social validation is what social platforms are built on, so it’s a significant component of how we derive relevance online — and the deeper integration of social is changing the dynamic between brands and digital creators.
The shifting economy of creator monetization
Brand sponsorships are the holy grail for creators hoping to monetize their online influence. According to an eMarketer report, brand partnerships are still the No. 1 source of revenue for most digital creators.
However, digital creators have a lot more monetization options to choose from, thanks to Patreon, affiliate platforms, paid content platforms and platform revenue sharing, making it easier to earn a living without relying so heavily on brand sponsorships.
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As a result, creators are diversifying their revenue streams, which, for some creators, allows them to be more selective about the brands they work with. What’s more, creators aren’t reliant on just one channel or one form of revenue.
YouTube creators probably have the most diversified revenue, often combining brand sponsorships, subscription models, affiliate deals, tipping/donations, their line of branded products and revenue share. However, it’s important to note that not all monetization options apply to every creator. But with so many options to choose from, making a living as a digital creator is more accessible than ever.
Here are a few of the ways online creators can monetize their content:
Ad revenue sharing: Advertising is the most traditional form of revenue for online creators. With this model, ads are injected into and around the creator’s content, and they make a certain percentage of revenue based on impressions. However, the revenue split can vary based on the platform, and some platforms have a specific threshold creators must hit before they can participate in ad revenue sharing.
Affiliate marketing: Similar to advertising or a brand sponsorship, affiliate marketing is an agreement for a share of revenue based on products sold. This kind of arrangement generally works best when the creator has a blog, website or YouTube account. Affiliate links allow the influencer to proactively choose the products they want to talk about and earn from, rather than having to wait for a brand deal to come their way.
Tipping and donations: Tipping is one of the growing ways for fans to support creators directly. While tipping and virtual gifting are becoming more popular in the U.S. and other Western countries, it has been commonplace in China for over a decade. As a result, many platforms have integrated tipping options that allow users to buy credits and give them to the creator of their choice.
Subscriptions and premium content: Subscriptions are another way for creators to make money directly from their fans and earn regular monthly income. Rather than fans and followers volunteering a tip, creators provide exclusive content through a subscription service. Patreon is one of the more popular of the subscription options for creators, but there are all sorts of options, including OnlyFans for adult and general creators and Substack for newsletter creators.
Digital and physical goods: Another way for creators to monetize their following is by developing their own products. For many online creators, these products are digital goods such as ebooks and courses. Some more popular influencers might also make physical products like a cookbook or fashion line. In most cases, the creator will take on the cost of developing those products, but popular influencers with their own brand might be able to land licensing deals with manufacturers to help develop and bring their products to market.
Brand partnerships: WhiIe brand partnerships are still the most popular way for influencers to earn money online, it could be considered another form of advertising. Previously, brands connected with influencers through agencies and digital marketplaces; now, platforms like YouTube and TikTok are providing a platform-native marketplace to make it easier for brands to identify the right creators to partner with.
Influencers still want to work with brands
Despite all of the revenue and monetization opportunities available to influencers, many are still interested in working with the right brands. Here are some ways brands can capture influencer attention in the more competitive creator economy:
1. Sell influencers on your brand
With so many monetization and revenue options, creators can be a little more picky about brand sponsorships than before. Many are still interested in brand sponsorships, but they’re becoming more careful about protecting their audience, especially if significant revenue comes from that audience. When courting creators, brands need to convince influencers there’s a good fit between the brand and the influencer’s audience and content feed. There’s nothing better than an influencer truly being obsessed with a brand or product.
2. Create a lucrative revenue share structure
As platforms continue to build a more direct link between influencers and the point of purchase, more affiliate opportunities are becoming available. However, digital creators are also entrepreneurs who consider the best way to serve their audience and grow their business — and they’re not just taking an affiliate opportunity. It doesn’t matter if the brand is willing to pay the influencer 10% of every product sold — if the influencer thinks the product sucks, they’re not going to be interested in creating content around it. Brands need to sell creators on the relevance of their products to the creator’s audience and convince creators the deal is lucrative and the products will sell. Remember that influencers will almost always prefer cash upfront to a pure revenue-sharing deal, so adding a solid cash component and healthy revenue share will go a long way in securing the right influencer partnerships.
3. Sponsor premium influencer content
Many influencers create their own products these days, which can be a good sponsorship opportunity for brands. For example, if a creator has a cookbook or an online course they plan to launch, a brand could potentially offer to sponsor that product launch. Sponsoring paywalled content gives brands access to influencer audiences, while brand funding enables the creators to focus on making great content.
4. Collaborate with influencer brands
For influencers with a brand, a collaboration to create a product line could be an excellent opportunity for the influencer and a larger brand. For example, say the influencer has a line of cosmetics or a fashion line. Creating a capsule collection could be a way to get their products in front of consumers while also lending their name to the distributing brand as social validation. Think Ivy Park by Beyonce for Adidas or the Fendi Vertigo collection by Sara Coleman.
5. Treat influencers like people
Some brands forget that creators and influencers are people. Instead, they want to integrate many creators into the marketing machine and enforce all kinds of creative control. Unfortunately, this is how the nuances of creators’ work gets lost — along with any possibility of authenticity. Make sure you’re giving the influencers you work with a brief that achieves your goals and recognizes that they understand their audience best. The best creativity comes from when influencers are genuinely inspired to make something great instead of just ringing the cash register.
Entering a new era of influencer marketing
In this new creator economy, the increased demand and selectiveness of creators means competition might be stiff for your ideal set of influencers. But that doesn’t mean working with influencers is out of reach for smaller brands. Of course, large brands will fight over the big influencer names, but bigger is not always better.
There are still plenty of creators out there with subject-matter expertise and a modest but loyal following, and new influencers emerge every day. These creators are often the most authentic, trusted and effective influencers. Focus on finding the right fit for your brand and your product, and you might have the opportunity for a lucrative influencer partnership.