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How Do Influencers Make Money? We Asked An Expert

They’re young, they’re beautiful, and they’re rich. But how do influencers make money? Expert Barrett Wissman shares their secrets

By Chere Di Boscio

By now, we’re all aware that the biggest (and some smaller) influencers on social media make money through advertising products. They’re meant to mark the post as #ad or #sponsored, so it’s pretty obvious.

But it’s not just your basic sponsored posts that help fatten influencers’ bank accounts – they make money in loads of other ways, including taking fees for appearing at events and parties; for ‘guest spots’ on other influencers’ accounts; by creating exclusive, subscriber-only digital content, and much more.

If you’ve got 100k followers on Facebook or Snapchat these days, it’s likely that no one will be very interested in promoting products on it. But with a strong Instagram or YouTube following, well, that’s a different story. Even a micro-influencer (defined as having 10,000 to 50,000 followers) can make a mint: while a few years ago, the average cost for a post was a few hundred dollars, if they have good engagement and a proven history of increasing a brand’s sales, micro-influencers can now ask for – and get – at least a few thousands dollars per post.

And as they grow, so does the money they can command: influencers with up to 1 million followers can get $10,000 [per post], depending on the platform, and with 1 million followers and up, they can charge around $100,000 up to a whopping $250,000 for a post! This is especially true if the content is on YouTube and the influencer is in the gaming industry (so if you’re wondering – yes, Pewdiepie is most definitely a multi-millionaire).

But still….exactly how do influencers make money?

To answer this question, Eluxe spoke to Barrett Wissman, with influencer management company Two Pillar Management.

IMG Artists is a leading global arts and entertainment representation firm that was purchased by Wissman from IMG, the global entertainment monolith that recently merged with leading Hollywood agency WME. Their specialty is musical talent, such as dancers, performing artists,  attractions and classical and jazz musicians, while Two Pillar Management, on the other hand, is a major player in the social media arena. The company represents some of the biggest influencers on the planet, including YouTube star Jay Alvarrez, Instagrammers and YouTube vloggers Murad and Nataly Osmann, and is also partner to Alexis Ren for her Ren Active brand.

Wissman has some strong opinions and interesting experiences with influencer marketing, and discussed the current state of the industry with me in this exclusive interview.

When did it dawn on your that Instagram influencers needed management?

Influencers have fascinated me from the very beginning, as they offer that rare combination of talent and business.  As they have a direct relationship with their public, followers and fans, they differ from any other kind of talent historically, since they speak directly to their fans. Most of them have little or no experience understanding how to develop or monetize these opportunities, which makes management a compelling necessity for them.

What kinds of mistakes did you see these kids making in their careers that needed to be corrected?

When we think of talent historically, we think about singers,  actors or comedians, for example. Many of them have either studied for years, or have spent countless hours going to auditions and learning by trial and error.  Influencers’ careers came about in a very short period of time and many have little or no experience, not only in their respective fields, but in life in general, as their rise has been so quick and precipitous.  All of this is, of course, a tremendous opportunity, but at the same time lends itself to mistakes, mishaps and bad decisions.  Who of us has not made lots of mistakes because of youth and inexperience?

No matter how many followers they may have, some IG personalities are more business savvy than others. Who have you encountered that seems to have a great head for business?

There are many influencers that have good business instincts:  those can be put into two categories. The first category are those that have good instincts, but think they know everything and can do it all.  The second are ones that realize that they don’t know everything, but need a good team around them.  Of course, any great business person realizes this, and that is what makes a good leader, whether its an influencer or the head of a major company.

I see great minds out there with the makings of our future business moguls. Some that stand out are: Jay Alvarrez,  Bella Thorne, Amanda Cerny, Kylie Kardashian and Michelle Phan to name a few.

How do influencers make money, and what are some of the examples of the best deals you’ve helped your clients secure?

Influencers make money in different ways. Some of the deals that make me most proud are either ones that have changed the paradigm of influencer-marketing from the influencer side, or ones that have established a brand as a leader in its space as a result of influencer marketing.

I remember convincing Hyundai, the Korean car manufacturer, that they could attract new audiences for a very traditional product made by a very traditional company through influencer marketing.  This required a tremendous amount of trust on their side to make that leap of faith, which they ultimately did. Jay Alvarrez executed a campaign for them that was created, shot and executed by a team of influencers and the content was not only used on social media but also on broadcast television.

The company actually put out a press release lauding the benefits that the campaign brought the the car it promoted (the Hyundai Tucson) and how it generated unprecedented results for the success of the car in the North American market by attracting a younger,  more adventurous customer.

More recently, I really enjoyed working with Omega to execute an influencer campaign for their watch, commemorating their watches for being the first to be on the Moon with the anniversary of Apollo 11.  This campaign combined the efforts of the very traditional spokespeople for the brand (George Clooney) with the new age of influencers.

You cover a lot of areas on IG, from fitness to models. Which areas do see the most growth in?

This is a very difficult question. It really moves in cycles. The beauty and fashion space is the most developed space to date, but at the same time it’s the most crowded.

Food and beverage, in some ways, has been one of the last to be explored – which is curious, because it’s something we do every day, and food and chef programming is so prevalent in the broadcast media. In the end, because social media is just another format through which services and products can be promoted, I believe it will extend itself to everything we do.

What are some of the biggest challenges you’ve had to face managing influencers?

I think the biggest challenges are youth and inexperience. The inexperience is not just the inexperience of the influencer, but also of brands, agencies and advisors knowing how to manage them, and the process of engaging them. There is a lack of understanding all the way around, making the experts even more valuable in these early stages of the business.

Besides follower numbers, what makes an IG personality really stand out for you enough to want to manage them?

The number of followers is actually one of the least important factors. Having a lot of followers is wonderful, but it doesn’t mean much if they aren’t engaged. Engagement, conversion, and understanding the relationship between an influencer and their followers is key for business partners and brands to understand.

Followers may love and respect an influencer,  but they may not be interested in following their advice in terms of buying a product or service. Each case is truly unique, and I think one of the pitfalls of the industry is that brands, agents, managers and advisors fall victim to type-casting and stereotypes.

Do you think influencers – like dancers and athletes – have a limited shelf life that corresponds to youth, or could their careers extend for decades?

I think in this way, influencers are just like more traditional talent. Some can last for decades and some are fads and their success is  based upon short-lived trends.  This also depends on an influencer’s skill in continuing to engage their fan base through creativity and perseverance.

For our readers, whose interests are in holistic health, clean beauty, vegan food and sustainable fashion: who would you recommend they follow?

I think sometimes that the most interesting people to follow are ones that truly believe in what they are doing and perhaps aren’t primarily associated with a certain subject, but are devout followers of that path. For example, Amanda Cerny is a comedic, fun and engaging influencer that happens to be vegan. She is a devout vegan, but that isn’t necessarily the central message in her storytelling.

Allie Michelle is a wonderful yoga and wellness influencer. The World Record Egg has very publicly and effectively broadcast the message of the importance of mental health and wellbeing on social media. A very traditional drugstore chain like CVS has run multiple successful campaigns extolling clean beauty, where natural beauty is encouraged. Sazan Hendrix, a wonderful beauty influencer, has executed many of their campaigns on the subject.

It’s pretty obvious that the world of technology is moving at a faster rate than anyone could imagine. Which kind of media platforms do you think we will all be using in five years’ time?

I believe that the augmented reality and virtual reality are going to play an important role in the coming years in how the public consumes and experiences media.

Main image: Allie Michelle Instagram

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