Millions of brands use Instagram every day, engaging with their fans and driving brand awareness. From mega-companies such as L’Oréal to mom-and-pop stores, businesses of every size benefit from a strong Instagram presence. Have you always wondered how you could join these companies and make money on Instagram?
Given that over one billion people use the insanely popular platform every month, there are many opportunities for marketers and brands alike to make their profiles profitable. From influencers to sponsored brand collaborations, read on for tips on how to monetize Instagram.
Table of Contents:
Getting Ready (Prerequisites)
Before figuring out how to make money on Instagram, there are several key elements you need first to consider. These are the driving forces behind what makes a solid and effective Instagram presence. Without ensuring your page has these, the strategies discussed later on in the article will not work.
Reach
To create effective monetization strategies, you need to make sure your content can reach your audience. Reach is all about how many users end up seeing your Instagram posts – whether they stumble upon it while scrolling through hashtags or while browsing their explore feed.
One effective way to expand your profile’s reach is to use relevant hashtags found within your niche. They are an effective and free way to increase your content’s discoverability.
Posts with at least one hashtag see 12.6% more engagement on average. For this strategy to work, you must identify which hashtags are relevant to your target audience. Making use of hashtags such as #cats and #dogs will not help your page grow in the long run if you are all about selling makeup.
With that said, reach is just one piece of the puzzle. If your posts are receiving a lot of exposure but little engagement, you need to figure out what’s the cause of this.
Follower engagement
Intuitively, you might feel having more followers means more opportunities for posts to take off. But the opposite is often true: having a small but dedicated following outdoes a large and inactive one due to higher engagement.
Moreover, engagement also has the potential to either grow or shrink your reach. Like many other social media platforms, Instagram uses an algorithm with several ranking factors for post feeds – including how often a user interacts with a certain page, hashtags, and a relevancy score. One of the most important factors Instagram considers is your engagement over time – and if Instagram sees your followers are not liking or commenting on your posts, the algorithm will simply show it to fewer people.
Consider Nike’s Instagram profile: they have almost 150 million followers. This essentially means they have the capacity to reach all of these users. However, it is likely that they only reach a portion of their followers. In fact, Nike’s posts typically get 300-600k likes on average – just 0.3% of their following. Given that the average engagement rate for sports teams is about 2.33%, Nike has a pretty abysmal rate.
One great way to drive engagement centers on making your Instagram profile consistent.
Consistency
When users follow brands on Instagram, they come to expect a certain pattern. Many businesses dedicate days of the week to certain topics and post accordingly. These kinds of accounts are working to remain consistent, and it helps greatly with engagement and growth.
Consider the data provided by Tailwind: posting more than seven times per week results in a 56% growth in followers. Brands that set up a regular schedule are helping their audience manage their expectations.
But remember, quality matters here, especially for the Instagram algorithm. According to a report by Social Media Today, when accounts post up to 16 times per day, their engagement rate decreases slightly.
In order to establish consistency, implement a social media calendar – and remember to only post high-quality content – which often comes from developing good communication skills.
Good communication skills
Although Instagram focuses primarily on visuals, you need to have good communication skills if you plan on selling on Instagram. Besides writing engaging copy on posts and stories, a large part of Instagram centers on conducting outreach to influencers and other brands for collaborations.
Daily Harvest, a meal delivery service brand with over 500 thousand Instagram followers, often collaborates with influencers of varying sizes to promote their products. Aside from their presence on social media, Daily Harvest needs to effectively communicate with potential partners to secure collaborations.
Consider refining your writing and copy skills by conducting market research. Mention has an excellent article on creating content that converts – check it out here!
Top 3 Instagram Monetization Strategies
#1 Sponsored Brand Collaborations
Influencers have become the talk of the town recently – and for good reason. 9 in 10 marketers rank influencer marketing as good or better than other marketing channels.
Influencers also come in different sizes – meaning even brands with small budgets can get involved. Consider the following tier of influencers:
- Mega-influencers, >1M followers
- Macro-influencers, 500k-1M followers
- Mid-tier influencers, 50-500k followers
- Micro-influencers, 10-50k followers
- Nano-influencers, 1-10k followers
Depending on a brand’s goal for certain campaigns, nano-influencers could be more effective than macro-influencers. Now that you have a solid understanding of influencer marketing’s flexibility, the next steps are to identify and approach potential partners.
Approach potential partners
The most important step in influencer marketing requires you to find out what accounts your audience follows. After all, if you, as a food business owner, choose to collaborate with a beauty account, you are not effectively reaching your audience.
As an example, consider the mega beauty brand, L’Oréal. They frequently collaborate with beauty influencers from all over the world. Yet the company selects their partners with intention – they hone in on influencers with a strong beauty aesthetic, such as models.
If a massive giant like L’Oréal only works with related influencers, you should, too. Make sure you approach only relevant pages found within your niche. When reaching out to them, remember to emphasize your account’s unique value proposition and how their followers will benefit from the collaboration.
Stay transparent
When working with influencers, the importance of transparency cannot be understated. Legally speaking, the Federal Trade Commission requires influencers to disclose if they have been paid to endorse a product. While this might not present an immediate threat to a small page, protecting the legal integrity of your brand should always come first.
Outside of the law, both the brand and influencers’ followers expect paid sponsorship occasionally. Passing off an endorsement as authentic can get your brand in some serious reputational trouble.
As an example, Stranger Things’ star, Millie Bobby Brown, came under serious fire after fans noted she pretended to put on sponsored skincare products in a video. Not only does this put the influencer at risk of losing followers, but the brand becomes associated with lying. Whenever you launch collaborations, remind your influencers of their obligation to disclose that they have been paid.
#2 Affiliate Marketing
Instead of spending hours trying to clinch sales by yourself, consider making use of affiliate marketing – in which marketers are paid on commission for every sale they make for a brand. For example, someone who runs a kitchen supply blog might be an excellent affiliate marketer for a kitchen knives brand.
Given that affiliate marketing is expected to grow to $8.2B by 2022, its popularity indicates it works for many brands. Moreover, it costs little to get started and offers an alternate stream of income for your Instagram profile.
Identify affiliate opportunities
There are several opportunities for Instagram users to start making use of affiliate marketing, including Amazon Associates and ClickBank, which enable you to monetize your Instagram page.
Whichever program you choose to pursue, make sure you understand what affiliate marketing means for your Instagram page. If your users have come to expect endorsement-free content, affiliate marketing might throw them off and dissuade them from engaging with you in the future.
Consider the example below – Anna’s followers have likely come to expect content about her child, making this an excellent example of relevant affiliate marketing.
A great way to help your audience adjust to affiliate marketing is to focus on products you actually use, eliminating concerns of authenticity. Otherwise, consider affiliating with products your audience benefits from. Do your followers really enjoy bubble tea? Start affiliate marketing with a boba-centered business.
Apply for the program
When applying for any program, you will likely need to provide your desired payment method, your profile, and your personal information. Whether you decide to affiliate using Amazon Associates or ClickBank, make sure you read their terms of service to understand your obligations as an affiliate marketer.
As we noted before, transparency – even within affiliate marketing – is important not just legally but reputationally for your page.
Stay alert for new opportunities
Much like marketing, trends come and go – and you need to keep up to speed on new opportunities available to you. As your account grows, your followers will change, and they will come to expect your page to change with them. If your content starts to become irrelevant for them, your engagement will drop, and affiliate marketing will become less profitable for you.
#3 Sell Your Own Products
If you really want to monetize your Instagram profile in an extremely hands-on way, consider selling your own products. By no means does this require you to create and develop something technological. In fact, you can sell simple products such as t-shirts and cosmetics.
When you choose to sell your own products instead of other methods, you can increase your profit margins at your own discretion. Inherently, you also have control over what you sell – enabling you to create products you know your audience will enjoy. And given that 130 million Instagram users interact with shopping posts every month, your followers are looking to buy products on the app.
With these pros also come some cons. First, selling your own products requires setting up an eCommerce infrastructure, requiring some initial costs and management. You also need to find reliable partners who will act as your manufacturers and distributors. The main con of selling your products is that your Instagram page requires much more attention.
Understand selling on Instagram
Instagram has ramped up its shopping features, enabling pages to monetize their accounts seamlessly within the platform. Instagram Shopping lets you post content and tag products, so that users can easily find where to buy within the Instagram app.
When you sell products, you want to minimize the amount of barriers consumers have to overcome to convert. By using the app’s new Instagram Checkout feature, you are letting your audience make purchases without ever leaving the app – which has greatly reduced the effort consumers have to put in to buy products.
If you do want users to make purchases directly on your website, you can easily do that, too. Set the link in your Instagram bio to your store’s eCommerce page and direct your followers to make purchases through there. Note, however, that this does require your consumers to take additional steps to convert.
Choose your products
When trying to figure out what products to sell, consider monetizing hobbies you do on a regular basis. Do you skate? Do you enjoy drawing? Have you taken some interior design courses? Using these examples, consider selling customized skateboards, homemade decor, or paintings. Regardless of what kind of products you choose to sell, consider leveraging your unique talents and skills!
However, you do not have to sell physical products to your audience. In fact, selling online courses can be a great alternative. Rather than painting art for consumers, consider offering an online course for your audience.
Neil Patel, a career and business influencer, uses his Instagram page to advertise his online courses – which often cost hundreds of dollars. Leveraging his fans’ expectations, he occasionally advertises these courses alongside more authentic entrepreneurial content.
Create or source your products
If you think selling products means you have to make them, think again! In fact, rarely do you have to manufacture a physical product from scratch to sell it. Third-parties are available for pages and brands of all sizes to help them monetize their online presence.
Dropshipping is a great way for Instagram pages to sell products without having to manage inventory. Essentially, as a drop shipper, you will sell products to customers and manage marketing while a third-party handles manufacturing. And you have the flexibility to choose products your audience will resonate most with!
As an example, print-on-demand (POD) services allow you to customize a variety of products without having to deal with the logistics of product sourcing. This type of eCommerce setup is easy-to-use, extremely cost-effective, and saves time. Rather than storing tons of shirts and sweaters in your house, POD business manages the whole process on your behalf. That way, you can sell with no inventory on your side.
All you have to do is create graphics for your apparel – and you can start making money immediately with your Instagram page and designs!
Set up selling channel
When setting up a selling channel, consider creating a business Instagram page complete with its own shop – thereby limiting the steps your consumers have to make to convert. Alternatively, you can create your own website through platforms such as Shopify, which also integrates seamlessly with third-party services.
Drive sales
When starting out, the best way you can drive sales is by leveraging your Instagram profile and preexisting audience. At this point, you know what they want and what makes them tick. Use their desires and feelings to sell your products through your Instagram content.
If you really want to monetize your Instagram profile, consider running ads through the platform. Using IGTV ads, for example, you can target those who are similar to your followers – effectively advertising to those interested in your products.
Identify improvement opportunities
Instagram Insights is a great way to see how you can improve your page. It provides useful data on how your audience interacts with your posts and content. More importantly, these analytics should help you optimize how to best monetize your profile in the future. For example, if your audience is particularly receptive to one product, consider creating more products like it. You should always use Instagram’s data to help drive more sales.
Recap
Now that you have a firm understanding of how to make money on Instagram, get started today! Figure out what your audience wants in a product and what they expect from your page. The options are truly endless – and hopefully, this guide has provided a helpful foundation on how to monetize Instagram.
