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Top Instagram influencers explain the 4 main ways they earn money, and how lucrative each is
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Top Instagram influencers explain the 4 main ways they earn money, and how lucrative each is

Gal Meets Glam

The influencer marketing industry is projected to be worth up to $15 billion by 2022, and to succeed as an influencer in 2020 and beyond, social stars must have diverse incomes.

Although Instagram influencers don't get paid directly by the platform, like YouTube creators do, they are still able to earn money - or get free stuff.

Social-media stars are increasingly leveraging their presence online by promoting brands, selling merchandise, and earning revenue through affiliate marketing.

According to influencers who spoke to Business Insider, brand sponsorships are the most common and often the most lucrative form of revenue on Instagram.

In a recent report, Izea, a company that connects marketers with influencers, found that the average price of a sponsored post on Instagram increased from $134.04 in 2014 to $1,642.77 in 2019.

As Instagram Stories have become more popular with users, more brands are requesting their use in influencer-marketing campaigns, according to industry insiders.

An influencer sponsorship on Instagram, in which a brand pays an influencer to promote their product, can be in the form of a one-off deal (like a single in-grid post), or a package which often includes a main feed photo, Story slide, and mentions on other platforms like YouTube.

Influencers charge rates based on factors like their engagement, follower count, and the number of likes or comments an average photo will receive.

To measure the success of an influencer campaign, brands have certain metrics they ask for after a sponsorship is completed, like number of saves and comment sentiment.

Landing sponsorship deals can be tricky, and some influencers have certain techniques for reaching brands, like DMing them on Instagram directly. Others will work with a manager or agent to help secure opportunities (managers and agents take about a 10% to 20% cut).

Aside from sponsorships, some influencers will release products or develop branded merchandise, turning their loyal followers into paying customers.

The No. 1 company doing this type of business is Glossier, which was founded by beauty blogger Emily Weiss. Weiss turned her blog into a $1 billion cosmetics and skincare company, according to a recent report on the state of "influencer-to-consumer" brands by the influencer software company Mavrck.

Another way influencers earn cash online is from affiliate links. This allows them to earn commission from a sale, through a special link on their Instagram page that leads to a third-party online store.

Business Insider spoke with four Instagram influencers - Caitlin Patton (24,000 followers), Jehava Brown (78,000), Katy Bellotte (170,000), and Julia Engel (1.2 million) - all of whom vary in follower count, on how each of them built their business.

Here's what they said:

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