Co-authored by Misha Talavera, co-founder and CMO of NeoReach
Armed with cameras, laptops, and the gift to produce visceral content, social media influencers are taking over the world. A report by Variety found that the five most influential figures among Americans ages 13-18 are all YouTube influencers, eclipsing mainstream celebrities including Jennifer Lawrence and Katy Perry.
Influencers aren't just becoming cultural figures, but also business magnates. As exposure translates into dollars, influencers are finding myriad ways to turn their personal brands into business empires.
The Internet went wild when Expressen, a Swedish newspaper, reported that YouTube celebrity PewDiePie made $7,000,000 in 2014 - a number that is likely a low estimate. But he's is not the only Internet celebrity to have become filthy rich. From partnering with brands to launching onto the big screen, here are 10 ways influencers are becoming millionaires.
1. Starting A Company
With 7.7 million subscribers, 1.1 billion lifetime views, and 350 uploaded videos, Michelle Phan is one of the greatest YouTube stars of our generation. In 2011, she founded Ipsy, a subscription service that charges $10 a month for a 'Glam Bag' filled with sample-sized beauty products. Four years later, the company has grown to 100 employees, 1 million customers, and a $120 million run-rate.
Most impressively, the company doesn't spent a dime on marketing or PR. Instead, it relies on the most powerful weapon of all: Ms. Phan's personal brand and her 7.8 million fans.
2. Getting On The Big Screen
On July 24 2015, Smosh: The Movie launched online and peaked at the top the iTunes comedy charts, and ranked second place on the overall movie chart. Smosh (Ian Hecox and Anthony Padilla) is among the most notorious YouTube channels, with more than 20 million die-hard subscribers. They are now the stars of a full-feature film, for which Lionsgate acquired the distribution rights.
3. Becoming A Music Artist
Shawn Mendes started his career by winning over his most important stakeholders: his fans. In 2013, he started posting 6-second covers of his favorite pop songs to Vine. A year later, he had 3 million devoted followers and a major record label deal from Island Records (other notable artists on Island's label include Justin Bieber, Katy Perry, and U2). On April 14, 2015, he launched his first album, which topped the US charts.
4. Getting Paid For YouTube Pre-Roll Ads
Have you seen those commercials that play before the video you want to watch? Those are called pre-roll ads. Every time you watch a pre-roll ad, the channel whose video you are watching (and YouTube) gets paid by the company running the advertising.
Although YouTube prohibits influencers from disclosing their payments and payouts vary by channel, season, and targeting, the average revenue generated by channels from pre-roll ads is estimated to be between $2 to $4 eCPM (cost per thousand video views). That is after YouTube takes its 45 percent cut.
Let's take Markiplier, one of the top 100 YouTube channels, and bring these numbers to life. Markiplier gets around 230M views a month. At an average eCPM of $3 and assuming a pre-roll ad runs on every three views, he would be cashing in $230K per month, or $2.7M per year!
5. Partnering With Brands
Pre-roll ads can be lucrative, but the eCPM paid out to influencers is fairly low and the ads disrupt the end-viewer's experience. I don't know about you, but I use AdBlock to skip those pre-rolls.
Instead, influencers and brands have cultivated an alternative, more powerful way to collaborate. Companies are hiring influencers to create visceral content that brings the brand or product to life. The sponsored content is created and published by the influencer onto their social channels, educating and exciting followers about said brand. These sponsored posts provide a pleasurable experience for the end-viewer, a higher return on investment for the brand, and a lucrative revenue stream for the influencer.
6. Getting Tips From YouNow
While Meerkat and Periscope have gotten all the media attention, YouNow is Gen-Z's livestream of choice. It is especially loved by influencers because of its tip feature, which allows followers to tip influencers for putting on a great show. According to Adi Sideman, YouNow's founder, more than $1M dollars are flowing through the platform every month, with some influencers generating $10K per month.
7. Starting A Product Line
Bethany Mota is a 19-year-old fashion vlogger with larger follower numbers than Vogue, Cosmopolitan, and Elle combined. She's more than just a vlogger; she's a full-fledged celebrity. Her dancing won fourth place on Dancing With The Stars, her fashionista eye netted her a guest judge appearance on Project Runway, and her singing talent instantly rocketed her debut single "Need You Right Now" to No. 3 on the iTunes charts. Her next step? Launch product lines. Her perfume, apparel, and home décor collections at Aeropostale are sure to be just the start.
8. Turning Your Followers Into Patrons
Patreon is a platform for fans and sponsors to monetarily support their favorite content creators. Patrons pledge to tip their content creators every time they release a new piece of content. Some of the most talented creators are making small fortunes on Patreon. Take for instance Sakimi Chan, an artist producing comic strips, tutorials, and paintings. His 3,712 patrons pledged to tip him $62K a month, or $744K a year.
9. Start a 20,000-Person Conference
In 2010, brothers Hank and John Green of the VlogBrothers YouTube channel, held the first ever YouTube creator conference, VidCon, bringing together YouTube's top channels and their most loyal fans.
1,400 people attended in 2010. 5 years later, more than 20,000 mega-fans flew from across the world to meet and greet more than 500 social media creators from YouTube, Vine, Instagram, Twitch, everywhere! As Richard Lawson declared in his Vanity Fair report on VidCon "The VidCon revolution is not coming. It's here."
10. Write A Bestselling Book
In November of 2014, 24-year-old vlogger Zoe Sugg, better known as Zoella, the beauty YouTubers with 6.5 million subscribers, published her book, titled Girl Online. Girl Online sold over 78,000 copies in its first week, breaking the record for highest first week sales for a debut author and becoming the fastest selling book of 2014. Three months after her book's release, she had enough money to buy a five-bedroom mansion for $1.5 million.
The future is bright for social media influencers. Every month, people spend millions of more hours consuming content on social media and brands spend millions of more dollars on reaching these people. If you are a creator considering starting a social media channel or a brand considering partnering with influencers, now is the time.