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8 ways YouTube and Instagram influencers are earning money besides advertising, as brand sponsorships stall

Amy Landino
  • Influencers on YouTube, Instagram, and TikTok are making money off their success online in a number of ways.
  • The ad business has been hurting for influencers in recent weeks as brands have cut marketing budgets to save on costs and avoid appearing tone-deaf during the coronavirus pandemic.
  • But the creator economy has grown well beyond its sponsored post roots.
  • Influencers earn money by selling merchandise, creating subscription-based memberships, commission sales, and other popular sources of income. 
  • Business Insider breaks down 8 main ways influencers can earn money without relying on ads. 
  • Click here for more BI Prime stories.
The influencer space has grown well beyond its sponsored-post roots.
The ad business has been hurting for influencers in recent weeks as brands have cut marketing budgets to save on costs and avoid appearing tone-deaf during the coronavirus pandemic.
But many digital creators had already diversified beyond branded posts into consumer-facing businesses like merchandise and other direct-to-consumer products, and direct membership programs with fans.
The YouTube content company FBE, which has over 33 million subscribers across its network of YouTube channels, is relaunching its membership program this month as part of a push to diversify its earnings outside of advertising.
"I've been pretty open about calling this an RPM crisis," the company's CEO Marc Hustvedt said. "In some cases this is 40% to 60% down from where we were right before the whole quarantine began. As you look to diversification of revenue and why that's important — especially when you're seeing real compressions of CPM's right now — you see why it's even more important to not be reliant on that single revenue stream."
Direct ad revenue from YouTube can prove unreliable — especially if a creator's videos contain controversial content — so many influencers are getting smart about finding ways to diversify.
Some influencers have larger business ventures, like YouTube creator Preston Arsement who is also the CEO of the digital-media studio TBNR, which Forbes estimated earned $14 million before taxes from June 2018 to June 2019. Others sell consumer products like makeup, merchandise, or books that have the potential to become New York Times bestsellers.
Some of the new ways creators have been turning their followers into paying customers (especially while social distancing) is by sending personalized video messages to fans through the app Cameo or  by creating a subscription-based membership program through Patreon.
More talent has been flocking to Cameo since sheltering in place began in the US, according to its CEO and cofounder Steven Galanis. New talent acquisitions for Cameo have grown at over four times the usual rate in the last two months, he said.
"For the first time in history, every athlete, actor, creator, comedian, and musician is suddenly sitting on the couch," Galanis said. "Their events are being canceled and all that revenue and fan interaction that they get is just suddenly gone. Talent are coming on and giving it a try because suddenly they aren't busy or making as much money as before."
Companies that work directly with internet stars in the merch space like Fanjoy, Killer Merch, and Teespring have long helped some creators who are not "advertiser friendly" grow their incomes. For instance, YouTube creator David Dobrik (17 million subscribers) who told The Wall Street Journal in March that his custom merchandise from Fanjoy made up the majority of his income.
Now these types of revenue streams are more important than ever for influencers, as brand deals fall dramatically.
Here are the 8 main ways influencers earn money without relying on ads:
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Send personalized video messages to fans through Cameo



The celebrity shout-out app Cameo lets people buy personalized video messages from their favorite celebrities, athletes, and influencers.
Brian Barczyk, a 50-year-old YouTube star with 2.6 million subscribers, charges $20 per video message through Cameo, where he sends fans short videos of him saying things like happy birthday.
Barczyk is known online for his vlog-style content about his life and the snakes, geckos, and other reptiles he owns and breeds. He has built a lucrative career online as a reptile influencer who posts daily content and frequently collaborates with mega-popular creators like David Dobrik and his Vlog Squad.
Other influencers who have flocked to Cameo include comedy YouTuber Cody Ko (4.7 million subscribers), TikTok star Lauren Godwin (19 million followers), and YouTube creator Lizzy Capri (4.8 million subscribers).
Read more on Cameo: 
The CEO of Cameo, which lets you buy personalized video messages from celebs, talks global expansion plans and trying to get politicians on the platform



Create a subscription-based membership program on platforms like Patreon



Membership programs through platforms like YouTube or Twitch, or third parties like Patreon, allow influencers to earn revenue directly from fans who sign up to get access to extra content or simply to support a creator they follow.
The YouTube content company FBE recently relaunched its "FBE Super" membership program, offering three paid tiers for fans interested in contributing either $5, $10, or $20 a month to receive access to exclusive live streams, merchandise discounts, and even the ability to be cast in episodes. The company is using Patreon's Memberful platform because it enables it to offer a tiered membership program that works across its network of channels on YouTube.
"A large portion of our audience is between Gen Z and millennials," said Derek Baynham, FBE's creative director and membership lead. "They grew up on YouTube. They grew up supporting creators. And so just having that outlet for them, they have a natural inclination to want to support creators that they love and channels that they grew up watching like FBE."
While Patreon recently laid off 13% of its workforce to prepare for a prolonged period of economic uncertainty, the company said 70,000 creators have joined the platform since March, and it's seen 20% month-over-month growth in the number of users paying for content for the first time.
Lifestyle influencer Katy Bellotte (177,000 Instagram followers) launched a Patreon account on May 1 as a way to offer her followers more content while earning extra revenue. Her account offers three monthly memberships that cost up to $5 and she already has 896 paying patrons.
Read more on Patreon: 
A YouTube creator with 350,000 subscribers explains the 5 main ways she makes money as an influencer and entrepreneur
Therapist Kati Morton, who makes mental-health videos, explains why Patreon has been better than YouTube for building a consistent income



Sell direct-to-consumer products like merch



Julia Engel, who goes by Gal Meets Glam online, began playing around with the idea of creating a product back in 2013.
She studied why people came to her page by looking at affiliate link data: what her followers were clicking on, shopping for, and at what price points, she said.
Before launch, Engel teased her clothing collection first to her Instagram followers, posting videos as a way to build buzz for the upcoming products. To transition her readers into customers, Engel also created private content for followers who signed up ahead of time via email, giving them inside access to the design process, she said.
Since launching, Engel's clothing collection has earned $35 million in revenue, she told Business Insider in October.
Developing consumer products to sell directly to followers has become one of the top ways influencers are profiting off their digital brands.
Selling merch is especially popular for top creators, often through companies like Fanjoy, Killer Merch, and Teespring.
YouTube star David Dobrik (17 million subscribers) told The Wall Street Journal in March that his custom merchandise from Fanjoy made up the majority of his income. The company helps him design, develop, and distribute a new collection of sweatshirts, T-shirts, and other branded items about once a month.
Aside from clothing, perfume launches — which have been a staple among Hollywood celebrities and performers, from Taylor Swift to Ariana Grande — have been popular for influencers.
Influencers like Tana Mongeau (5 million YouTube subscribers) have joined in on the growing fragrance business. In January, Mongeau sold out her fragrance "TANA by Tana" within 76 minutes on the ecommerce site Shopify.
The popular twin influencers Ethan and Grayson Dolan (10 million YouTube subscribers) launched the DTC fragrance company Wakeheart last year. They sell fragrance collections directly on their company's website, and their first collection sold out within four hours, according to the cofounder of their company, Kevin Gould.
He said it "moved over 20,000 units" in the initial drop.
Read more on influencer-led DTC companies: 
An Instagram star who has sold $35 million of her own products explains how she built her fashion line and turned followers into customers
YouTube stars Ethan and Grayson Dolan took us inside their fragrance company Wakeheart, which is launching a new line after selling more than 20,000 units in its first drop
Inside the rise of Fanjoy, from selling music T-shirts to dominating influencer merchandise with YouTube star clients like David Dobrik and Jake Paul
A 22-year-old beauty YouTuber explains the main ways she makes money, from a merchandise line to a makeup palette with Tarte Cosmetics



Sell a course, program, or one-on-one coaching



YouTube creator and entrepreneur Amy Landino (377,000 subscribers) first began earning money on YouTube by offering one-on-one client work on video content marketing and business coaching.
"In a way, I've been my own sponsor since the beginning of 2011," she told Business Insider in January. "The client work that I was doing was how I was able to facilitate making the videos to market myself. I was marketing a business at the time, not being an influencer. I kept my job, but kept creating."
She also has two books, which she sells on Amazon, "Vlog Like a Boss" which she started working on in 2017, and her most recent book, "Good Morning, Good Life: 5 Simple Habits to Master Your Mornings and Upgrade Your Life," which she released in December.
Landino said her books are her version of a consumer product and she "still makes quite a bit" from her first book. Within the book, she promotes her "masterclass," which she sells on her website for $497.
Read more on influencer courses:
A YouTube creator with 350,000 subscribers explains the 5 main ways she makes money as an influencer and entrepreneur



Earn commission through affiliate marketing



Many micro influencers like Caitlin Patton, who has 23,000 followers on Instagram, earn a portion of their income from affiliate links.
When Patton shares an outfit on her lifestyle and fashion blog or Instagram page, she links to the items of clothing through an affiliate program.
These programs allows fashion influencers like Patton the option to include a link to outfits on Instagram, giving followers access to purchase those pieces within an app. RewardStyle and its mobile app are among the most popular fashion-affiliate programs, along with Rakuten, Magic Links, and Pepperjam.
"The challenge for influencers with followings below what the industry would define as 'macro' level is the lack of leverage they have in fee negotiations with brands for sponsored campaign fees," said Matt Gilbert, the CEO of Pepperjam. "An added benefit for both influencers and marketers is that the affiliate channel provides a proving ground, where aspiring influencers can establish their bona fides and for many, it provides the launching path they need to graduate to a sponsored campaign relationship with the brands they have collaborated with on a pay for outcome basis."
Influencers who use affiliate programs often earn a commission from a sale through a special link that leads to a third-party online store. They typically earn between 5% and 20% of an affiliate sale, according to an industry professional in influencer marketing. There are a number of factors that play into the percentage.
But affiliate programs — like sponsorships — still rely on outside brands, which can add some uncertainty to the market.
At the start of April, some brands began to suspend some of their programs, including companies like Macy's, Patagonia, Victoria's Secret, and Walmart.
Read more on affiliate marketing: 
How much money you can make from a sponsored Instagram post with 24,000 followers
Influencers are seeing a big bump in affiliate link sales as ecommerce surges, but it could be threatened as major retailers cut programs



Livestream on social media



Live-video marketing on social-media platforms has long been a powerful source of revenue for gamers and other top streamers who have pitched brands on the real-time format as a way to engage with their audiences.
But as interest in live content spreads to other social-media platforms like Instagram and TikTok — and the format surges in popularity during the coronavirus crisis — tech companies are introducing new ways for creators to earn revenue from streaming without relying on brand deals.
Last month, Facebook announced that it's planning to allow creators to charge admission fees for events on Facebook pages that include live video. The company is also offering its "Stars" monetization program to more creators — a system in which fans can send virtual stars to a livestreaming creator that are worth $0.01 each. And the company also announced that it's adding support for creators to collect charitable donations during Instagram Lives.
Twitch, YouTube, and TikTok also offer similar platform-specific currencies for live-content creators to earn revenue from fans while streaming live. Some TikTokkers have even been streaming live to their fans while they sleep.
Creators on TikTok can film themselves in real time on the app and their followers can send them virtual "gifts" that they can purchase for various amounts of "coins" (coins can be bought by users in packs starting at 100 for $0.99).
"You're connecting with your fans, and it's the fastest way to get money," TikTok creator Salina (known has SalinaKilla with 1.4 million followers) told Business Insider in December. "On average, I can earn up to $20 to $50 on livestreams. Sometimes I can get $100 or more within one live."
Read more on livestreaming:
A TikTok star with 880,000 followers explains the ways she earns money and how much she makes
Instagram influencers can earn thousands of dollars for a sponsored livestream, but they have to get risk-averse brands on board



Digital rights management



Digital creators with significant audiences often see their video content pirated and reposted without permission on platforms like YouTube. They can earn additional revenue by partnering with a digital rights management company like SuperBam.
SuperBam works with over 250 creators to help them claim and monetize any content that they own the rights to on YouTube, receiving any future ad revenue that a pirated video generates on the platform.
"For creators dealing with issues around piracy, this is something they should be actively paying attention to, not only from a revenue perspective, but also to make sure their content isn't being used in ways that aren't in line with their brand," said Chris Landa, SuperBam's senior vice president of talent and business development.
"In the current climate where brand deals have slowed down or halted, content claiming is a revenue stream that is easy for creators to access and that really helps protect their rights in a way that they should be protected," Landa added.
Digital rights management can be controversial as some creators fear the method could make them appear overly zealous in claiming past clips or sounds.



Content creation rather than 'influencing'



As production studios shutter operations in order to adhere to social-distancing measures, more marketers are hiring influencers for their content creation skills rather than their "influence."
"For the first time, big brands aren't able to make those big budget television ads," said Karyn Spencer, the senior vice president of partnerships at Whalar, an influencer-marketing agency. "You don't need that full-blown production anymore. YouTubers taught us that."
Digital creators with technical production skills like video, photography, and animation (and fully-equipped home offices) have been able to continue working with limited disruptions during an extended period of sheltering in place.
The influencer-marketing agency Obviously told Business Insider in March that it had seen a 33% increase in the number of brands looking to hire influencers for content creation since the pandemic began.
"It's yet another opportunity for brands to take risks from a traditional approach and see how more modern cost-efficient approaches (i.e., leveraging creators for production) can work," Vickie Segar, the CEO of the influencer-marketing agency Village, told Business Insider in an email.
Read more on how influencers are earning money through content creation: 
Some brands are hiring influencers as a 'one-stop shop' for video and animation as production studios shut down — and finding they're a lot cheaper





* This article was originally published here Press Release Distribution

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