How do influencers make money and why does it matter to VR creators?
Have you ever just thought I wonder how online influencers actually make their money? Like, what's the business model there? Does a brand just show up on their door with a massive sack of cash and go "Hey, you, you're pretty great. You have that cash and you carry on doing what you're doing. "
I'm sure if you're listening to this, you are probably a very creative person. And the idea of someone just kind of showing up to pay you to do what you love is really goddamn appealing. Today, I want to talk about the business model behind online influence, and why it's important and how it's translatable to VR creatives.
Read on to the full transcription or listen to the podcast episode here
Today I'm looking at influencer culture and the reason why I wanted to break down influencer culture and this idea of the business model behind online influence was because once you understand how simple and achievable the business model is behind something like being an online influencer (not that everyone wants to be famous and known or whatever) all of a sudden you can start to apply that same idea, that same model to your own career.
Okay - I know what you're thinking.
"Alex. I don't want to be famous. I want to be rich but I don't wanna be famous and also be 100,000 followers. Me and my 34 followers rocking out on Instagram like how am I gonna get that brand money? How am I gonna make a sustainable career from being an influencer?"
When you think influencer who's the first person that comes to mind you? Probably think Kim Kardashian or Jake Paul or someone like that right? A multi bazillionaire with millions of followers, bit of a dick, live their life in the spotlight. That's kind of the image that you think of when you think influencer right? But what if I told you that no, no, no, no, no, no, my friend you are in fact already an influencer?
What if I told you that when you go to dinner, and your mate says, "Oh, I'm looking at getting a new TV, anyone got any recommendations?" and you say "The Samsung 4k Smart TV that I invested in, the 49 inch that I'm rocking at home? It has rocked my world. I love it so much. I could not recommend it highly enough. They've got an offer on Amazon. It was cheap, it was delivered to the door. It was so easy to unpack and put on. It was just I was just flawless. I couldn't recommend it highly enough."
When that friend goes and buys that TV based on your recommendation, that was YOU being an influencer. You aren't getting paid to be an influencer, but that was you being an influencer. You are already an influencer within your circles, whether that be recommending a film or TV show to watch whether that be sending someone a new song that you like, it's influencing someone's buying decisions by recommending something. You are already an influencer.
So how do you turn that into business model? How do influencers in the traditional sense like an online influencer, how does someone make that that their full time career? Well, the number one thing is understanding that most influencers, the smart ones, the ones that have a solid business model behind them, have multiple streams of income. So the average influencer will most likely have money coming in through affiliate sales. So the example I just gave there of you influencing your mate at dinner to buy the Samsung 4k TV (which by the way, hashtag not sponsored but totally up for it, Samson, you know where I'm at). Affiliate sales would be if you had an affiliate link to that TV, and when you told your mate to go and buy it, they used your specific link and then you would get a percentage of that sale. And actually, if you're an Amazon affiliate seller and your mate went on Amazon and bought the TV, but also decided that they wanted a bracket to go with the TV and then actually a new TV stand for this massive TV to fit on...so sale now came to 1000 pounds rather than 400. You - all of a sudden - are making a curve of that whole transaction. I'm not personally an affiliate seller, it's probably something I will look into in the future, but it's not something I've kind of dived into yet but from what I hear, you can make some pretty decent money that way. So influencers, when they give you a coupon code, when they give you a link in the description to purchase something, that is an affiliate sale. So that's one stream of revenue.
Another stream of revenue, might be merchandise. That's a big thing, right? And that has always been a big thing if there's a band you like, when you go to a gig, and you can buy the T shirt or you can buy the hat, you buy the mug, whatever it is. Merchandise is a huge opportunity in influencer culture. It could be a huge part of someone's revenue stream. And there's loads of different ways like, brand deals! Let's say, I'm an influencer that has 10,000 people that follow me, which is not as important as how many people interact with my content. But let's say I get like, I don't know, let's say I get 500 likes and 300 comments on
photos and things on Instagram.
That's more reflective of how many people are actually engaging with my content, not the amount of followers. It's a really poor indicator of whether someone actually has influence and this is a big trick. I don't know how many of you might already know this, but a quick way to find out whether someone's Instagram followers or YouTube subscribers are fake is to look at the amount of subscriber or follower account. And then look at the average number of likes they get on a post. So, if someone has 20,000 followers, they should not be getting 10 to 20 likes on a post. Like, I mean, to be fair, Instagram has completely fucked their organic algorithm at the moment so it's very, very difficult to actually get any interaction on your organic posts. BUT if you have a subscriber
count of 10,000 followers, should be getting at least 100 likes, if not way more. So if you ever go on to an account that's claiming to have 10s of thousands or whatever followers and their light count is super low. They've got fake followers. So like I say, when it comes to brands, they will most likely look at the interaction that you're getting rather than your follower account. And this is another reason why it's way more achievable than having hundreds of thousands or millions of subscribers. This is where the term micro influencer comes in, right? This idea of having a much smaller niche your audience that actually engages with you.
So a brand comes in - let's use an example from the VR world...okay, let's say Oculus come in, and they want to sell the quest - a 400 pound headset. They might offer you 5000 pounds to do a brand deal, then they would be expecting for them to make a lot more than 5000 back in headset sales. So you would have to have gone (I really shouldn't have started a math space episode without doing a load of maths first or working out where numbers should be) but you can get the picture right? So a brand comes to you because they want to sell their product. That's all they're doing. That's the only reason a brand wants to interact with an influencer is because they want to get the audience's attention that you have access to as an influencer. They will always want a return on investment. Obviously, your audience are not necessarily all going to buy that product, but the idea being that if you've got a niche audience, then they can. Anyway, I'm banging on far too much about that. So you've got that stream of revenue.
And then there's live events, you might do speaking gigs, off the back of having your influence. So that could also bring in revenue. One of the key things here is obviously you've got like digital products and ebooks and normals, but the business model in shorts behind an influencer, is that they have diversified streams of income.
So how can we apply that?
How can we think about that in terms of VR creatives? This is something I've really been thinking about recently, because I think this is how all big companies operate, not just influencers, but if you think of Disney, and I might have talked about this in a previous episode but Disney make the majority of their money from the merchandise. They make more money on frozen dresses and frozen princess dolls than they do on the actual ticket sales to see the film, or the actual download sales on video on demand, you know, they make far more money on the merchandise and on the brand equity that frozen has than they do on the actual film itself. So the film almost becomes a marketing piece for the wider brand. So I've been thinking about this a lot in terms of my next VR project, Bad News, because I really I'm really excited about making the piece but I'm also thinking, "Okay, well, I've probably got about a year or two until we're anywhere close to releasing this project because we're not technically going into production until 2021, so how can I go about building? Not like being an influencer, but how can I build a group of people that really care about the idea? That really cares about the characters, that really cares about the process of making it? How do I get people to show up so that when I actually put the piece out into the world, people will want to see it, people travel to come and see it, instead of relying on festivals or relying on just showing up at a venue and hoping people show up just because it's something new and cool to try. Like how do I make people care about the bad news idea and the bad news IP, lets say?
So this all comes back again to that influencer kind of model right? It comes back to essentially the advertising model, like if that is the product, how do I get people to it? How do I get eyeballs on it? In this scenario, I'm the influencer and bad news is the product I'm trying to sell. And sell feels like, I know, sell kind of feels icky and it can feel a bit like ooh, you know selfish, almost.
But really, I like I just want people to see it. I want it to be out in the world. I want it to make impact. I want people to connect with that. I want people to question their own world beliefs after seeing a piece through the eyes of this character that I'm really passionate about. So that's why I think it's really important to look at that diversification. So how am I thinking about translating that over to my VR creative? Okay, well, firstly, I'm going to document the journey. I'm going to talk about the project way before the project comes out. I want to talk about the ins and outs, I want to get your feedback on it.
I want you to want to spread the word. I'm not going to ask you to spread the word but I want you to want to spread the word. It reminds me of that scene in friends, you know when Monica is like, "I don't want you to do the dishes I want you to want to do the dishes" like..., I don't want to go out and pay for Facebook ads to drive people to buy tickets for this thing. I want people to actually genuinely care about it. So maybe I need to diversify my approach right. Maybe I need to have multiple streams of income. Bringing people in to the project. So maybe I might look at, okay, well, what's a different format that we could do it in that would be the equivalent of the frozen princesses dress for my VR project? But bring people in? What could be the companion digital series that would drive people to want to engage with the VR experience? And it's hard, right? Because we're all indie creators, we don't have mass amounts of budget. You know, often, pretty much every single original project I've ever made in my career, I've had to like hustle, beg, borrow and steal to get made into the world. So the idea of having to build this almost like franchise, like nurse around an IP is pretty scary. But I've started to realise that actually, we need to be looking at a model that works and works very, very well and kind of trying to unpick it to translate it over.
So how could you apply this to yourself to you as a VR creator? For me, it's all about thinking about this next project. But you might just think of you in general, or your next piece or trying to get some revenue in so that you can actually just sustain your lifestyle in order to be a full time VR creator. Maybe you're looking at kind of switching gears and wanting to get out of what you're currently doing and want to deep dive deep into this.
Client work is the quickest and easiest way to be able to sustain yourself as either a self employed or a business owner person in the VR industry, but what about this new model? What about looking at? How do we take the learnings from Instagram and the influencer model and apply it to our own practice?
I want to end thsi kind of giving you a summary about a really famous essay that was written on this topic. And if you've not read it, I highly recommend it. I'm going to paraphrase it now but you should definitely go and look at the original article. It's called 1000 true fans by Kevin Kelly. And the theory is that all it takes is 1000 true fans. Imagine if you had 1000 people in your network or 1000 people just in your life in general - family, friends, general people, 1000, just 1000 people that would be willing to part with 10 pounds a month. That's all.
You'd have 10,000 pounds at the end of each month.
10,000 pounds from 1000 people and all of a sudden, it starts to feel really achievable, doesn't it? We think about these influences with all the hundreds of thousands of millions of followers and just think - they are definitely not getting 10 pound a month from every single one of those people following them but that's all it takes. Can you imagine having 10 grand a month for doing what you love? Like you don't even need 10 grand a month. Let's say the average person needs five grand a month so that's 500 people that pay 10 pound a month. What could you do? What could you sell? What kind of original work or something, could you put out into the world that we generate 10 pound a month from 500 people?
It feels crazy achievable, right?
1000 true fans, when we think about making it as an artist or making it as a creative person, like self sustaining, we think that we need hundreds of thousands of people to see us but we don't actually. You just need 1000 people.
Read the full article here: https://kk.org/thetechnium/1000-true-fans/
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