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I recently spoke to the India-based finance Influencer Ravi Handa about his journey into content creation and how much money he realistically makes.
His answers shocked me and told the true story behind the hype created by online Instagram reels.
In a nutshell, it is extremely difficult to make any meaningful revenue from YouTube Ads, Instagram sponsorships, or Twitter revenue unless you have followers in millions.
As per my understanding after talking to multiple people working hard to create online content, most of the time, they only get paid in a barter system.
A barter system means that a company will send their product as a gift, which they would expect you to promote on their channel.
In the case of the restaurant business, they will probably invite you for a free lunch and expect you to post their reels or YouTube shorts.
Social Media Career
Effort Required: HIGH
It requires a lot of effort and continuous work to find that one reel or video that goes viral.
Ravi believes that your chances of making a decent living are much better in a regular profession like a Doctor, IAS, Engineer, or a job in a Western country than in a content creation field.
You cannot earn a meaningful income just by getting a viral video or a reel one fine day. This has to be done regularly and most of the time daily, to gain followers.
There’s competition, and staying relevant means constant adaptation to trends and algorithms. The social media companies are always trying to maximize their profits by selling ads. Hence, they also look for trends or to so, create trends every day to increase engagement.
They play with user’s sentiments and that’s why you may see an extremely silly thing that is irrelevant but would be topping the trend charts.
Most content creators follow these trends and create a reel or a short by copying the trending reel. You will also notice that most trending tweets will also be copied and pasted.
Education and Skills:
If you are trying to create content within your education or a professional niche, then you have an edge.
It will be easier for you to attract followers with your knowledge in your specific field compared to non-experts.
Example 1:
A CA (charted accountant) or a CPA (in the USA) creating content on business taxes, personal finance, and other similar tax-saving tricks from real-life experience can gain followers quickly.
Example 2:
A doctor can share the details about maintaining health and can attract followers easily.
Social media works best and pays better if you have built your brand as people are more interested in “How you did it” rather than just saying “How to do it”.
If people relate to your experience and your style of conveying things, they will follow you.
With easy access to video content creation and easy copy and paste of other content, it has become a forest out there on each media platform. That is why you see accounts looking for fresh content ideas every day to compete with others.
How Social Media Influencers Make Money?
#1 ADS
The easiest and quickest way is the ads that run on your website, YouTube video page, Twitter feed, or Instagram reels.
Please note that ads make you the least amount of money.
To give you an example, you may only make about $5 (INR 400) for 1 million views on your YouTube video. The whole thing revolves around how much the social media company made from your video.
YouTube is known to share about 55% of ad revenue with its content creators.
#2 Sponsorships
The most money is made by influencers when they sign a one-to-one deal with brands for promotion.
That’s what you get to hear from major players who have followers of millions and are paid directly by big advertisers to promote their products.
Example:
Virat Kohli (the top Indian sportsman) will write a tweet or create an Instagram post for maybe several crores of Indian rupees.
Similarly, a YouTube personality like Dhruv Rathee or BeerBiceps will charge several lakhs like 2 Lakhs+ (upwards of $4000+) to promote any product in their next video.
They can then sell their services to a wider audience and may gain sponsorship deals from companies that are targeting the audience in this area.
In many cases, the direct sponsorship deals offer a cut on the revenue gained through their followers too. But, these may be reserved for very strong and big influencers like the best of the best.
Revenue share with Influencers Example
In the famous example of Michael Jordan of the USA, Nike gave him a multi-billion dollar deal with a percentage cut in each sale.
This was a win-win deal as they both made billions.
You can watch the Hollywood movie AIR on Amazon Prime to see how this deal was cracked by Nike to become the biggest sportswear company and how Michael Jordan negotiated as an influencer.
#3 Selling Education Courses or Products
Many big influencers create their product lines to diversify their earnings once they have reached the top of earnings from ads and sponsorships.
The small ones may not be able to reach this level easily.
Example 1
Nas Daily has created its software products to sell as subscriptions.
They have also created several educational courses on how to make a successful career in Social media content creation. They earn revenue by selling these courses.
Example 2
Dhruv Rathee, an Indian-origin YouTube influencer also creates his education courses and sells them as a source of revenue stream.
Example 3
Ryan’s World a well-known YouTube Channel which earns hundreds of thousands of dollars per month in AD revenue started creating its own branded toys.
You can find them easily in Walmart, Target, and other big retailers in the US.
