- On October 6, Instagram hosted a virtual conference to celebrate the app's 10th anniversary and discuss new features, trends, and usage tips.
- Adam Mosseri, the head of Instagram, outlined the six main ways that creators make money through Instagram, including brand partnerships, affiliate marketing, and ad revenue.
- He also touched on how Instagram wants to improve monetization moving forward.
- Subscribe to Business Insider's influencer newsletter: Insider Influencers.
Instagram hosted on Tuesday a digital convention to mark the app's 10th anniversary and look forward to what's next.
The event was held on Zoom and kicked off with a conversation between Adam Mosseri, the head of Instagram, and content creator Lilly Singh. After the two shared questions and talking points about some of Instagram's newest features, trends, and areas for improvement (like fake engagement and cyber-bullying), the audience asked Mosseri questions.
"Do you plan on sharing ad revenue or any other revenue with creators?" one person on the Zoom call asked.
"We're trying to figure out how to do that," Mosseri responded. Instagram recently started testing an ad revenue program on IGTV earlier this year, and introduced "Badges," which allow followers to tip creators when they are livestreaming.
"There are a bunch of ways that we can help creators make money," Mosseri continued.
Here are the six main ways that creators earn money on Instagram, according to Mosseri:
- Branded content
- Affiliate marketing
- Ad revenue
- Commerce tools
- Direct monetization like Badges
- Gated content
"There are other ways too, but these are the six areas that we're exploring," Mosseri said.
Mosseri said Instagram wants to provide a suite of monetization tools to meet the different needs of creators, as each revenue method varies across following size, industry, and type of content.
For instance, ad revenue may help some smaller creators monetize their content, but it also may not be the most practical.
"If you're making cool mugs or something like that, commerce is going to be a more important source of revenue," Mosseri said.
"We're finding more ways for creators, slowly, but surely, to fully make a living on Instagram," Kristie Dash, Instagram's fashion and beauty strategic partnerships manager, told Business Insider in a recent interview.
Business Insider broke down how creators on Instagram are already monetizing the app using the six methods mentioned by Mosseri, along with some of his comments.
1. Branded content
Branded content is one of the most common ways that Instagram creators make money. Paid sponsorships on the app can live as in-feed posts, Instagram Stories, Reels, IGTV, and livestreams.
"There's tools where we can do more," Mosseri said about branded content on the app.
Instagram added the "Paid partnership with" tool in 2017, which lets sponsored posts on a creator's feed appear with a border that explicitly states the content is an ad. When used, brands are also given access to that post's performance metrics.
How much money a creator can earn through branded content on Instagram ranges and depends on a variety of factors including following size, engagement, type of content, and industry.
For instance, Katy Bellotte, a YouTube creator and influencer with over 176,000 followers on Instagram, recently told Business Insider that she charges $2,400 and $5,000 for a sponsored Instagram post, while a Story costs $500 per frame.
Even creators with smaller follower counts — referred to as "micro" and "nano" influencers — have increasingly begun to land paid brand sponsorships.
Read more about Instagram "micro" influencer earnings: 5 Instagram 'micro' influencers explain how much money they charge brands for sponsorships
Instagram's new TikTok competitor, Reels, has also begun to see interest from brands. Fashion and lifestyle creators recently told Business Insider that they anticipate more brands will use Reels for sponsorships as it continues to grow and evolve.
2. Affiliate marketing
Affiliate marketing is a way that creators can earn money through a commission (typically between 1% and 20%) on sales through a trackable link or discount code.
For Instagram creators with over 10,000 followers, it's common to include these affiliate links in Instagram Stories through the "Swipe Up" feature. Otherwise, creators link to these in their bios.
Many brand ambassador programs also provide Instagram influencers with discount codes that they can include in their captions, bio, and stories.
Mosseri said that Instagram is exploring how it can get more "granular measurements" on affiliate marketing.
Read more about affiliate networks for influencers: The top 11 affiliate marketing networks that Instagram and YouTube influencers can use to get a cut of sales from products their followers buy
3. Ad revenue
"Rev share is table stakes for most platforms at this point, so we're going to have to figure something out," Mosseri said.
YouTube, one of Facebook and Instagram's competitors, has its YouTube Partner Program that permits creators with over 1,000 subscribers and over 4,000 watch hours to earn money from Google-placed ads on their videos.
Instagram's IGTV monetization plan mimics this model, placing 15-second ads on videos so that creators can earn 55% of the revenue. The program is still be tested and a broader rollout should come soon, Dash told Business Insider.
4. Commerce tools
Earlier this year, Instagram expanded eligibility for Instagram Checkout and Shopping, which allow brands to list their products on the app's e-commerce platform. In July, the requirements for those features opened up to creators who sell their own products, such as merchandise or their own product lines.
Instagram influencer Katie Sturino, who has over 550,000 followers and her own skincare brand called Megababe, told Business Insider in July that her brand uses the Instagram Shopping features and sees 30% of referral traffic come out of Instagram.
5. Direct monetization using 'Badges'
Another way that Instagram recently broadened its monetization features was by introducing "Badges" in May, which allow followers to purchase tips or donations that go directly to creators using Instagram Live.
Instagram's tipping program is similar to that of Amazon-owned Twitch, which also lets viewers tip streamers.
At the end of August, Instagram introduced Live Shopping, in which creators and brands can go live and link to directly shoppable products within the livestream.
6. Gated content
Creators can earn money by selling "gated content" such as pay-walled newsletters or subscriptions to a creator's Patreon. They can also use services like Cameo, an app that allows creators to sell personalized video shout-outs.
These gated methods of monetization grew in popularity this spring when many brand partnerships halted as the pandemic impacted businesses and marketing budgets.
For more information about how influencers are making money on Instagram, read these Business Insider stories:
- 'Micro' and 'nano' Instagram influencers have proven effective for many marketers, but new data suggests only a small fraction of them are working with brands
- Influencers see big differences between Instagram's Reels and TikTok in audience, style, and money-making potential
- Influencers explain the 9 best ways to make money on Instagram, YouTube, and TikTok — and how much they earn
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