Influencers on Social Media Don’t Become Rich

Many aspire to be social media celebrities like Charli D’Amelio on TikTok or Mr. Beast on YouTube. However, most people who seek employment as content creators have aspirations higher than simply making ends meet. For the past three years, Clint Brantley has worked as a full-time creator, putting up videos on TikTok, YouTube, and Twitch, where he offers commentary on the news and crazes around the popular online game “Fortnite.” His salary from the previous year was less than the median annual compensation of $58,084 for full-time U.S. workers in 2023 despite having over 400,000 followers and posts with an average of 100,000 views, according to statistics from the Bureau of Labor Statistics.

The 29-year-old is reluctant to sign a long-term lease on an apartment since his income, mainly from sponsorship deals and internet tips, comes in irregular amounts and may go at any time. He currently lives in Washington State with his mother. “I am susceptible,” he admits.

Making a good living as a social media developer is complex, and the difficulty is only increasing. Platforms are paying less for highly visible postings, while businesses are becoming more particular about the terms of sponsorship agreements. Creators are growing increasingly apprehensive about their capacity to stay on TikTok for a long time due to the possibility that the site could close its doors in 2025.

Not Many Overnight Feelings:

Hundreds of millions of individuals share images and videos on social media platforms daily to inform and amuse their followers. An estimated 50 million people make money from it, according to Goldman Sachs research from 2023. The investment bank projects that by 2028, the number of creator-earners will increase from 10% to 20% per year, further congesting the market. These creators, sometimes called influencers, do not have their earnings tracked by the Labor Department.

Being financially independent as a creator might take months or even years. Typically, one can combine affiliate connections, sponsorship agreements, goods sales, and direct income from social media platforms. However, polls indicate that those who persevere eventually find some benefits. According to creators, this is because you can discover what kinds of content connect with readers the most, which may increase followers and, eventually, revenue-generating prospects.

However, colossal money doesn’t always equal money. Per influencer marketing firm NeoReach, 48% of creator-earners earned $15,000 or less in the previous year. Merely 13% earned above $100,000.

The disparity reflects several things, such as the type of material producers release, when they began, and whether or not they work full- or part-time. Individuals who entered the market at the height of the COVID-19 lockdowns, specializing in areas like investment, fashion, or lifestyle hacks, claim to have profited from the spike in social media usage at that time.

A quick rise in popularity made the profession the top choice for many teenagers’ (and adults’) professional wish lists. However, the creators claim that the behind-the-scenes work is exhausting. They risk losing momentum if they don’t consistently provide exciting content. They plan, shoot, and edit content throughout the day and attempt to connect with followers and get traction with advertisers.

Emarketer analyst Jasmine Enberg said, “It is much more work than most people realize.” “Those who are paid to create have often done so for a long time. Most don’t become famous overnight.

Creators do not receive paid time off, healthcare benefits, retirement contributions, or other benefits that firms typically offer their employees, much like independent contractors. This fact, persistently rising mortgage rates, and inflation make it harder for creators to make ends meet.

“Everything is more expensive, especially groceries,” said Mobile, Alabama resident Jason Cooper.

Cooper came up with the idea for Sock Cop, a sarcastic sock puppet for TikTok and Twitch that tells dad jokes in both live and recorded broadcasts, a few years ago. Tips account for his $500 to $600 monthly income.

He believes that if he worked full-time, he could likely make much more money. With no assurance, however, the 37-year-old father is unwilling to give up his marketing career and risk losing health insurance. He now plays Sock Cop for a few hours on the weekends and evenings. He would feel compelled to create films all the time if he had more time. Cooper responds, “You’ve got to feed the beast.”

Declining Platform Earnings:

From 2020 to 2023, TikTok distributed $1 billion in creator funds to qualified creators for their content on the network. Others took up the cause. With its temporary fund, YouTube’s rival to TikTok, Shorts, allowed creators to make between $100 and $10,000 monthly. Instagram’s Reels Play bonus scheme paid out varying amounts to authors. The top producers on Snapchat received $1 million daily through the Spotlight rewards program.

These days, the platforms have eliminated or drastically altered how they compensate authors.

To be eligible for the current TikTok rewards scheme, an account must have 10,000 followers and 100,000 views in the last month. Currently, in testing, Instagram offers creators prizes for sharing Reels and photographs through a seasonal, invite-only program.

Last year, YouTube introduced an ad-income-share arrangement in which producers who meet specific requirements—such as having over 1,000 subscribers and 10 million public Shorts views during the last 90 days—receive 45% of the money from in-between-post advertisements. Under a Snapchat program, artists who meet specific criteria—like having 50,000 subscribers and 25 million monthly views, for example—are awarded a portion of the advertising revenue through Stories. It still gives creators money through its Spotlight program.

Creators participating in these schemes or getting incentives are not assured of a sizable salary.

Yuval Ben-Hayun first rose to fame on TikTok in 2020 thanks to his postings on the word-puzzle app Wordle. After branching out into language and other educational stuff, the 29-year-old New Yorker could sustain himself and his expenses, which amounted to over $4,000 per month, by early 2023.

At that point, TikTok had closed its fund but was still testing its creator incentives scheme. Even though he now has 2.9 million followers, Ben-Hayun stated in March that he only made between $200 and $400 for every million views. Since then, he has seen a steady reduction in his earnings.

The money is gone, but the following remains. He recently reached an all-time low after collecting just $120 for a video with 10 million views.

Danisha Carter is upset because after promoting content production as a career, TikTok and other sites removed the financial incentives. She argues that due to the producers’ efforts, users have become addicted to social feeds, bringing in billions of dollars annually for the platforms.

With 1.8 million TikTok followers, the 26-year-old frequently receives hundreds of millions of views on her postings about fitness and beauty, as well as her thoughts on everything from dating to cyberbullying. According to Carter, TikTok has paid her a total of $12,000. She makes extra money by selling goods; she made roughly $5,000 last year.

According to Carter, “Creators ought to get a fair share of the money that the apps make from creators.” “Our compensation should be consistent and subject to greater transparency.”

A representative for TikTok declined to comment.

According to YouTube, it has given over $70 billion to media firms, producers, and artists in the last three years, and over 25% of channels using the ad-revenue share model are now profitable. A spokesperson said, “We remain committed to investing all of our resources into what matters most for our creators, viewers, and advertisers.”

No TikTok in the Future?

TikTok, which invented the short-form video genre, is credited by many artists and marketers for encouraging higher levels of engagement than its competitors in the market. According to Pew Research Center, since its debut in 2016, TikTok has amassed over 170 million users in the United States, including a third of American adults. According to market research firm Sensor Tower, they spend 78 minutes a day on average using the app.

At least not in its current incarnation, TikTok might not be accessible in the United States for very long. A measure that would require the app to be sold or banned by January 19, 2025, was signed into law by President Biden in April. Legislators in the US have voiced concerns about TikTok’s potential threat to national security. Beijing-based ByteDance, the parent firm of TikTok, has stated that it is unable and unwilling to sell its U.S. business by the deadline.

ByteDance claimed in a lawsuit against the US government that the new regulation infringes upon its First Amendment rights. Many American creators also filed lawsuits. In both cases, the Court of Appeals will hear arguments on behalf of the District of Columbia Circuit in September.

Brandon Granberg, a 31-year-old Bayville, New Jersey creative, well-known for his absurd interactions with strangers in public spaces, believes losing TikTok would be “kind of devastating.”

Granberg battled for years to get users to his app, but two years ago, a single viral article helped him grow his following from 5,000 to over a million. He just received $1,000 from the TikTok Creative Challenge, a program introduced last year that lets creators be paid to make video advertisements for businesses that don’t show up on their accounts. For creating four TikTok videos advertising a website for persons with foot fetishes, he also received $2,800. Granberg claims he did it because he needed the money, even though he thought it was strange.

Although he hasn’t received many sponsored articles, creating marketing films for small businesses has dramatically increased his revenue over the past year. Most customers discover Granberg via TikTok. “It will hurt me if it gets banned,” he declares.

Adapting Algorithms and Tastes:

According to Emarketer, the combined income of American social media developers is predicted to reach $13.7 billion this year. According to the research group, most of it, or $8.14 billion, or 59%, will come from brand sponsorships.

Regarding funding artists, advertisers have traditionally taken the lead, giving out far more cash than social media companies and the fans who purchase goods or leave tips. However, agency and talent reps say advertisers want more from artists than big fan bases. In addition to the audience demographics of the authors, they want to see proof of robust interaction in the form of shared and saved content.

“Brands are focusing on metrics that are much harder for creators to price themselves on and far less predictable for them,” says Los Angeles-based business-strategy consultant Sarah Peretz, who assists creators in partnering and interacting with advertising.

According to Sarah Steele, a 34-year-old Tulsa, Oklahoma, creative who began creating TikTok videos in 2020 about her experience as a working mother, certain businesses are more restrictive than they used to be. “Now it’s like, ‘We want you to say this because we’re paying you.'”

According to Steele, one advertiser demanded earlier this year that she include disclosures about legal matters in several sponsored Instagram postings. She claims, “It felt like I was reading from a teleprompter.” “As a customer, it even slightly soured me on the brand.”

Due to algorithm changes and other uncontrollable circumstances, creators find it more challenging to draw in viewers. Furthermore, although more marketers seek to collaborate with creators, Peretz notes that “increased activity leads to increased competition.”

According to Jess Hunichen of Shine Talent Group, another shift is that marketers are now more interested in collaborating with a small number of artists on long-term contracts than trying out multiples on one-off initiatives.

In 2015, while influencer marketing was still relatively new and TikTok didn’t exist, Hunichen co-founded the talent management company. The typical contract between a company and an influencer back then was often less than $1,000. She estimates that each campaign’s average agreement is worth $10,000.

Worth the Effort:

Earlier this year, Los Angeles resident Ronit Halmos started creating TikTok films, which she characterizes as brief assessments of bars, restaurants, and other establishments “with some sass and attitude.”

The 27-year-old, a full-time technology recruiter, has signed her first advertising agreement. She was requested to create a 30-second video showcasing her opinion on a range of tastes by a kombucha business. Despite receiving less attention from viewers than her typical content, she earned $1,500 in around thirty minutes of effort.

Traveling the Pacific Northwest, 27-year-old Tyler Haven charges $250 to $300 for promotional videos that brands can post to their social media channels and about $1,200 for posts that show up on his TikTok account, which has over 10,000 followers or his Instagram account, which has over 41,000 followers.

Since January, he has been sharing movies of his “van life” with his wife, Oak Haven. Their central abode is a 2004 Mercedes Sprinter T1N that is completely paid for and furnished.

Haven claimed that building his fan base naturally has been simple. He thinks his posts don’t show an unrealistic, idealized version of life. To focus on content development full-time, he left his job in June.

Haven claims she could survive on $2,000 a month, which is almost nothing and less than most people’s rent.