Here's how the Instafamous are following Kylie Jenner's lead
Friday, 28 December 2018
Be it lip kits or branded hats, social media influencers are cashing in by dabbling into merchandising.
One of the biggest influencers on the planet, Kylie Jenner, made her way to the top of Forbes' list earning US$900 million (NZ$1.3 billion) by leveraging her multimillion strong social media following to sell her own makeup line and clothing brand.
Smaller influencers are taking a page out of Jenner's book, by creating numerous revenue streams to make the big bucks.
Lawyer-turned-wedding blogger Megan Hutchinson has an Instagram following of about 15,000 and a year into starting her blog, she set up her own online business.
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Hutchinson decided to create Little White Book, a service that offers brides-to-be an easy way to organise their big day, while planning her own wedding.
'I couldn't find anything like it, and I knew other brides would also benefit from the structure and organisation of a diary like it,' Hutchinson said.
'Because I had a large audience already, both through my planning website, Facebook and Instagram, I knew I would be able to reach potential customers, and I was confident that the product was better than anything else available, so I was pretty sure it would sell.'
And it did. It did so well that she quit her day job working as a lawyer to become a full-time blogger.
Hutchinson has since launched an electronic wedding planning set, a separate business called Skin Sonic which sells skincare tools and has another book in the pipeline.
A post shared by Megan Hutchison 💗 (@meghutchison_) on Dec 13, 2018 at 2:27pm PST
By marketing it herself on Instagram, and working with other influencers, Hutchinson said her skin care business had also grown 'substantially' and was stocked at fellow Kiwi influencer Shannon Harris's own beauty line XO Beauty.
'Having my own businesses gives me financial security from an industry which is still very new and unpredictable,' Hutchinson said.
Dunedin-based merchandising company Tuapeka Gold Print marketing head Pat Robertson said merchandise was an offshoot of any successful venture.
'Anyone that's got some sort of following, they'll use merchandise as a way of generating more revenue,' Robertson said.
'Our industry is still growing and the main reason for that has been the influence of moving away from TV and expensive advertising to merchandise which is more cost effective in terms of brand exposure.
'Someone uses the coffee cup 100 times you get many more brand exposures for a dollar than with TV or radio.'
According to Business Insider influencer marketing ad spend is poised to reach between US$5 billion and US$10b in 2022.
German-based international merchandising company Spreadshop chief executive Philip Rooke said influencers made up 30 per cent of his company's global sales.
'Social media influencing is about a seven-year-old industry. It started with YouTube creators making advertising money but with their huge following they have been able to make money from merchandising,' Rooke said.
'Consumers are trying to push individuality in every way they can. Through social media just liking something isn't enough, wearing a t-shirt means you really like it.'
Apart from influencers, social media in general had a big impact on Rooke's business.
'When Donald Trump tweets something outrageous he generates more t-shirt sales. It will be out-of-date in a week, but we still see that spike.'
Social media influencers tend to know what the next big thing will be and are even more clued-up about what the next big money-maker could be.
Influencer marketplace The Social Club founder Georgia McGillivray said influencers were looking for opportunities to monetise their following, including creating products which they knew their audiences would enjoy.
'Depending on the influencer, some of them will be fad items related to an event or a social trend, however many of them will build a brand which they can sell product through ongoing,' McGillivray said.
McGillivray said engagement was more important than how big a following an influencer had.
'There isn't really a barrier for number of followers for an influencer to have a successful brand. Engagement is a better metric, as engaged followers will be much more likely to convert to customers.
'However, it is generally the influencers who are looking to create a career out of their online profiles who are willing to invest in building a brand.
The Social Club's own earning calculator suggests an influencer with 1000 followers could earn $50 per post, but someone with 150,000 could earn $2375 per post.
But prices vary depending on the brand, the campaign and how much time the content takes.
For example, an Instagram post could pay about $1500, but an Instagram story which only lasts 24 hours would pay about 20 per cent of that, McGillivray said.
Over the past year, influencers and brands have struggled with fake followers, as some content creators desperate for larger audiences have resorted to buying them.
The Business of Influence owner Amanda McConchie said compliance and fraud protection had a long way to go in addressing that.
She said fake sponsored content had also been affecting the industry's reputation.
As social media regulators tried to tighten the rules on influencer marketing, most content creators were using the platform to create legitimate side businesses and become entrepreneurs.
'We've seen influencers exploring countless avenues such as product reviews and brand endorsements.
'While they see value in promoting other people's products, the idea of selling their own is the holy grail – it's what transcends them from being a social media influencer to a fully-fledged entrepreneur.'