You Ask, I Answer: Monetizing Social Media Followings?

In today's episode, Shannon asks, I need to put together a better game plan on making money between now and the end of the year. A friend thinks I need to monetize my YouTube and Instagram. I guess this means ads on YouTube and trying to do more influencing stuff on Instagram. So monetizing social media audiences is it's difficult, but it's not impossible. It's I say it's difficult because right now where we are, and this is being recorded in the middle of 2020, um, there is a tremendous amount of inventory because people are or should be uh still obeying distancing and spending a lot more time here and a less lot less time out there.

Um but advertisers have pulled back pretty substantially, uh whether it's because of uh protesting, which is is happening uh in July of twenty twenty on Facebook, uh or it's just that that the economy is in such not great condition, uh advertisers are not spending as much and therefore there's there's less money in the pool. When it comes to social media audience advertising, uh generally speaking, the closer you are to the bottom of the funnel, the more you can monetize, the more money you're gonna make. So there's really about three different models, right? There is uh view-based models, which are being paid for views, um, and that would be as you mentioned, uh advertising like on uh YouTube uh monetizing your channel, which requires a lot of views per video. I want to say it's I think it's at least a thousand views.

Uh it's either a thousand or ten thousand views. I can't remember which. Uh there's engagement level uh money making, which is affiliate marketing, where uh people go to uh you know, landing pages and stuff. Probably the most well known one is Amazon Associates. Uh and even there, you still need to drive a fair amount of traffic and get people to actually buy stuff.

Uh and then there's uh monetizing uh directly, which is direct sales where you sell something of yours to your audience. Direct sales pay the best by far. Um you can and I have uh you know sent tens or hundreds of thousands of views to something and had it made like ten bucks, right? Because think about it. An advertiser when advertisers advertise on like display networks, uh like YouTube, they are seeing prices, you know, two dollars CPM, five dollars CPM, ten dollars CPM.

That's what the advertiser pays. You get a small slice of that, um, maybe like thirty percent. So i in the best case, in other cases like five percent. And so the what you get out of it is if you think about it, if you're you have a video that gets ten thousand views, um, you might see a dollar, like literally one dollar um from that. In order to monetize well, you have to have a very large uh an active following that just consumes all your stuff.

Um affiliate sales are uh typically pay better. You'll get anywhere between you know, you depending on the network, uh between five and twenty, maybe even thirty percent of the commission of uh on a commission sales on what it is that you're selling. If you go to like commission junction, share a sale, all these different networks, um you can get started and and start picking out advertisers that you want to work with uh and check out their pricing and see who offers the the best pricing. The best the best opportunities to look for in that space are what are called recurring revenue models, where if somebody signs up for, say, like a streaming video service, you get a smaller commission up front, but then you get paid as long as that person remains a member. And that's can be a nice, not huge, but a nice amount of money.

At one point I was working with a streaming video service, and I think I was with relatively little effort, um, pulling the down fifty bucks a month, beer money, right? Not not mortgage money, but beer money. Um obviously there are some folks who are phenomenal affiliate marketers who can uh clear six figures a month. Um but that's literally their full-time job, and that's all they do. And they do it by they do it with a lot of arbitrage, a lot of uh traffic arbitrage, where they buy ads at much lower prices on niche networks and then uh resell uh uh uh essentially resell that traffic uh to affiliates.

Then the third bucket is the direct sales. If you have a book, if you have a course, if you have uh uh premium content, uh Patreon, whatever the thing is, if you have a highly engaged audience that uh wants what you specifically have to offer, um, that is the way to go. I will say that in terms of revenue that I've made, direct sales are the lion's share of online advertising revenue. Um in my best years, I've made maybe thousand to two thousand dollars on like advertising on affiliate marketing, and on my best years, I've made like twenty thousand dollars on direct sales. Because you when you sell a book, you know, like on Gum Road, for example, where they keep they keep five percent.

Um compare that to Amazon, where Amazon will take 65%. And you get to keep, you know, uh $400 and odd dollars of it. So those are the three models. Deciding which model to go with depends on your numbers. If you have, you know, in the millions of views, then monetizing the traffic is is an easy no brainer, right?

Um one of the things that's important is that these programs are not mutually exclusive. You can absolutely monetize your YouTube channel while you pursue affiliate marketing while you also pursue direct sales. But remember that your audience has a limited amount of attention. So you have to prioritize which attention you want to try and cash in on. But as you're getting things up and running, um these things can you know be running in tandem.

Uh check your audience numbers for sure, check your engagement numbers. What social network do you get the highest level of engagement on? Um, because that could be the network where you want to focus some affiliate marketing on. And then I am hesitant to put a lot of oomph behind social media because we know that these networks are fickle and we don't own them. We don't own them.

And you know, we're seeing things like apps getting banned in in certain countries. It's not a stable environment. Your website and your email list and your I presume, you know, weekly email newsletter, um, that's where you can make uh good money on direct sales. That's where if I had to if I did the analysis, I would virtually guarantee that 80% of my direct sales come from email, from hitting my email list and saying, hey, I've got this thing, come by the thing. Um that's where I think it makes the most sense to invest your time and where you're gonna see the highest returns is getting people to to be loyal.

Um, and to do that you have to create amazing stuff on a regular basis. But when you do, you will be able to direct sell them much more easily um than trying to monetize either affiliate marketing or uh U-based stuff. Both of those are good, but they're not great. So that's the short version. Pick a revenue model based on the traffic you have, the c audience you have, the level of engagement they have, and the digital assets you have available to you.

And then go to town, start creating stuff at at scale, at volume, uh, and start um promoting it and seeing how it does. And one of the keys to to monetization is it is a entirely an experimental game. Testing, experimenting, seeing what converts, what doesn't convert. Uh, you will get really good at that. Um, but that's the way to go.

Uh if you have follow-up questions, leave them in the comments box below. Subscribe to the YouTube channel and the newsletter. I'll talk to you soon. Take care. Want help solving your company's data analytics and digital marketing problems?

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