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Part
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Instagram Monetization - Brand Partnering
Two case studies were identified, one representing a high conversion rate and the other a low conversion rate. Both influencers were found to use a diverse range of sources for earning revenue. Arielle Charnas and Kayla Itsines are estimated to bring in earnings of $17.06 and $17.42 per follower respectively.
ARIELLE CHARNAS: HIGH CONVERSION RATE CASE STUDY
- Charnas has 1.1 million followers on Instagram. She is included as an example of an influencer with a higher conversion rate. She has an estimated 2.8% engagement rate, which is fairly high. The calculation is provided in the strategy section.
HOW THEY USE THIS METHOD OF MONETIZATION
- Charnas started her Instagram career early (in 2010) before the platform was saturated with influencers.
- According to Michelle Merino, a consultant specializing in influencers: Nordstrom forged a deal with Charnas and indicated that this type of deal is far more complex and comes with strings attached "exclusivity terms, equity or rev share compensation models," which suggests that money is generated by going beyond just pay per engagement or post.
- Charnas leverages the visibility of Instagram, allowing physical products to be associated with her daily life.
HOW MUCH THEY EARN PER FOLLOWER OR ENGAGEMENT
- Charnas earns an estimated $17.06 per follower. The calculation is provided in the strategy section.
- As a point of interest, her earnings come from complex arrangements that may involved elements such as equity and revenue shares.
- As a useful indicator of her level of success, Charnas earned more than $4 million in sales one day.
KAYLA ITSINES: LOW CONVERSION RATE CASE STUDY
Kayla Itsines has an estimated 0.3% engagement rate, which would be regarded as low. The calculation is provided in the strategy section. Itsines has 11.7 million followers currently.
HOW THEY USE THIS METHOD OF MONETIZATION
- Itsines developed a successful reputation as a gym instructor, and subsequently relied on word of mouth to grow her base.
- She then started an Instagram and Facebook marketing campaign in 2012, which provided training and nutrition advice.
- Itsines generates revenue from sources beyond mere 'pay per post' or 'engagement'. These include "...paid ebooks, a stadium tour, hardcover bestsellers, and a hugely popular app".
HOW MUCH THEY EARN PER FOLLOWER OR ENGAGEMENT
- Itsines is estimated to earn $17.42 per follower. The calculation is provided in the strategy section.
- As an additional insight, Itsines earned an estimated $17 million from her training app in 2016.
GENERAL ADVICE
HOW THEY USE THIS METHOD OF MONETIZATION
- Influencers or micro influencers have discovered that brand partnerships can be unreliable sources of income, and as a result may rely on platforms - such as Patreon - to sell subscriptions, digital goods and merchandise.
HOW MUCH THEY EARN PER FOLLOWER OR ENGAGEMENT
- According to Brittany Henessy, the average payment per Instagram post is $500 to $30,000.
CONVERSION RATES
- Conversion rates differ widely, depending on the type of action, industry and landing page - but an average of around 3.1% is indicated for Instagram.
- According to Hootsuite, engagement rates are one of the best predictors of conversion rates.
ENGAGEMENT RATES
- As a rough guideline, the following interpretation of engagement rates is provided below. However, it should be noted that engagement rates tend to diminish with larger followings:
- Less than 1% = low
- Between 1% and 3.5% = average/good
- Between 3.5% and 6% = high
- Above 6% = very high
RESEARCH STRATEGY
In order to identify case studies that met the requirement for low and high conversion rates, a search was undertaken for a means to identify conversion rate data for specific Instagram influencers. The search included Instagram, social media authority sites such as Influencer Hub, and social media dashboard sites such as Hootsuite. However, influencers' conversion rates were not found. The reason for this may be that such data is considered sensitive information.
It was then decided that a proxy for conversion rates would need to be identified. Further research determined that engagement rates are a predictor of conversion rates; higher engagement rates typically yielding better conversion rates. Therefore engagement rates were used as a proxy for conversion rates. In order to calculate engagement rates, each case's Instagram profile was located and this was then used as input for the Phalanx engagement rate calculator.
No description of the exact calculations is provided on the Phalanx site, and so instead these were derived by observing the results produced by the calculator in response to varying inputs. The general CALCULATION is: (Number of engagements (likes + comments) / followers) x 100. The specific calculation for each influencer is as follows:
KAYLA ITSINES:
((34,984 + 217) / 11,759,430) x 100 = 0.3% (rounded to the first decimal place).
ARIELLE CHARNAS:
((34,266 + 421) / 1,259,341) x 100 = 2.8% (rounded to the first decimal place).
EARNINGS PER FOLLOWER
Earnings per follower were calculated as follows. CALCULATION: (Number of posts x potential earnings per post) / number of followers. The potential earnings per follower were calculated using the Instagram Money Calculator, with the lower boundary being selected to be conservative. Since the calculator does not provide a URL unique to each influencer, the specific calculations are provided below:
KAYLA ITSINES: EARNINGS PER FOLLOWER
(8,737 x 23,329) / 11,700,000 = $17.42
Instagram handle: kayla_itsines
ARIELLE CHARNAS: EARNINGS PER FOLLOWER
(7,506 x 2,499.75) / 1,100,000 = $17.06
Instagram handle: ariellecharnas
IDENTIFYING HOW EACH INFLUENCER MONETIZED
An extensive search of authority sites, business publications and social media sites was undertaken to determine what brand partnership monetization in relation to Instagram might mean. These included sites such as Influencer Hub, Forbes and Hootsuite. The results of this search are included in the general advice section.
Each individual influencer's background was examined by browsing their Instagram profiles in order to obtain a firsthand view of how they operate. In order to obtain contextual and historical details, business sites such as Forbes, technology sites such as TechCrunch and domain specific sites such as IconReel were investigated.
SELECTION CRITERIA
Companies and or influencers were selected in order to have at least one high conversion and one low conversion case study. As an additional criteria it was decided that the influencer would need at least 1 million followers in order to be relevant to a $20,000 per month target. Recent examples were sought - published in the past 24 months as additional research criteria.