As a brand, it’s very likely that one of your goals is to make money or bring in revenue. Since money doesn’t grow on trees, it’s essential that you have a plan for bringing in income. That plan is often called a influencer marketing business model.

According to the Harvard Business Review, a business model is how a company plans on earning income. In greater detail, a business model is a “step-by-step plan of action.” It outlines and defines the business’s value proposition, or what makes it different from other companies. It also identifies the target audience or customer base, estimates costs and expenses, identifies the competition, and comes up with a plan for marketing. Another part of a business model is determining how or if a brand will work with other companies.

As Investopedia notes, several different types of business models exist. There are brick-and-mortar business models, direct sales business models, and advertising-based business models. The recent rise and popularity of influencer marketing means we can add another category to that list as well: influencer marketing business models.

What Is an Influencer Marketing Business Model?

The influencer marketing business model works something like this: A brand finds an influencer who has a connection to the target audience the brand wants to reach. The target audience could be the brand’s existing audience, or a new demographic the company hopes to reach but hasn’t yet.

The brand and influencer enter an agreement. Agreements can range from the influencer receiving a flat fee for working with the brand to the influencer receiving products or services for free in exchange for their content. In some cases, a brand might compensate the influencer based on how the content performs.

The influencer then creates content, usually with the brand’s oversight. They share the content with their followers. Ideally, the followers take some action, such as making a purchase or otherwise engaging with the brand. One study found that more than 30 percent of consumers have made a purchase after seeing an influencer’s post. About 25 percent said they made a recommendation after seeing an influencer’s post.

Influencer Marketing Business Model vs. Traditional Marketing Business Model

The business model for influencer marketing different from other types of ad-based business models. For example, one popular advertising business model focuses on bringing in revenue through the placement of banner ads on websites and social media.

Known as an ad-supported business model, this has gone from being a single revenue stream to a full-on business model in recent years. An example of an ad-based business model is a website that relies on the purchase of banner ads or sponsored content to bring in revenue (rather than selling its articles to consumers or selling subscriptions).

The trouble with the ad-based business model is that it’s often not very effective. One reason for that is the increasing use of ad-blocking software. Another reason for the lack of efficacy is that people typically don’t click on ads — the average person is 475.29 times more likely to survive a plane crash than click on an ad.

Intention plays a big role in the difference between a traditional ad-based business model and the influencer marketing business model. Usually, when a person is reading something on a publication’s website or watching a video on YouTube, they aren’t there for the ads. Banner ads are often an s that get in the way of the person’s goal.

In contrast, people who follow influencers do so because they are interested in what the influencer has to say. A sponsored post from an influencer isn’t as intrusive as a banner ad in the middle of a website. This is because, the sponsored post is created in the voice and style of the influencer.  

How to Put Together an Influencer Marketing Business Model

An influencer marketing business model should focus on how your company will use influencer marketing to reach its goals and bring in revenue. Here’s how you can get started putting together your own business model.

Consider your company’s “value proposition.”

Identify what sets your brand apart, or what you offer consumers that other brands don’t. Knowing this will help you when it comes time to find influencers. The watch brand Daniel Wellington, used an influencer marketing business model to grow, knew that its watches were affordable and had a minimalist aesthetic.

Identify your audience.

Know who you’re going to be talking to, or who you want to reach through influencer marketing.

Identify influencers to work with.

Once you know your audience and your value proposition, it’s time to find influencers who align with both. You want to work with people who have a connection with your audience and your brand. 

Project costs and revenues.

You can use your estimated revenues to figure several things out. For example, how you’ll pay influencers, and what type of costs you can expect from influencer marketing. Although paying influencers a flat fee was once a popular option, some brands are now finding that it makes better sense to pay their influencers based on results. That way, if a campaign doesn’t perform as expected, your brand is less likely to be out a considerable sum.

Have the influencer create and publish content.

Tracking the performance of your content is easy to do once it is live. Tracking, helps you see if influencer marketing is going to help your brand make money. Additionally, it will help you realize if you need to make some adjustments.

Using influencers to reach an audience and to increase sales is often very effective for brands. Knowing when to call it quits can depend on several factors.  For example, when your marketing business models have not produced the results you want. At this point it might be time to give influencer marketing a try.


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