Instagrammers are getting rich as advertisers target Gen-Z

PLAYA VISTA, Calif. — For Andrea Russett, it's not just about YouTube anymore.

For years, the most lucrative avenue for video "creators" like Russett—young folks who talk to the camera, act funny, sing, dance and make little mini-movies, was via YouTube, which shares revenues with its stable of popular performers.

But this year, Facebook's fast-growing Instagram app is ready for its closeup.

On the eve of VidCon, the convention that attracts 25,000 folks to Anaheim, Calif. to celebrate online video, Instagram is strutting its position as another major force in mobile video, another avenue besides YouTube for the small but influential band of video creators to gain exposure and make money online.

VidCon, where Instagram will be in full force, with a keynote session featuring co-founder Kevin Systrom, a large booth presence and "lounge" for creators, opens tonight.

Instagram blatantly copied the Story feature from Snapchat last August, which enabled fans to see a collection of photos and videos that only stayed in place for 24 hours. In doing so, the app became even more of a must-see daily destination for young consumers. Tuesday, Instagram said some 250 million people now visit the Stories feature daily, dwarfing Snapchat's 160 million daily visitors. The emphasis on video paid off.

Stories "broadened our vision for what Instagram could be,” says Kevin Weil, the head of Instagram product. “It was a pressure release valve for us.”

Instagram was launched in 2012 as a photo sharing app. It's now the place where some 700 million folks monthly check in to see the latest photos and videos from their friends, as well as top name celebrities (everyone from Beyonce and Kim Kardashian), to online stars, who are a “small, but mighty” part of the platform, notes Weil.

Making money with Instagram isn't as easy as with YouTube, which just requires signing up for a Google AdSense account (to share revenues), banking info, and posting videos. Then creators, once they hit an initial following of 10,000 subscribers, wait for the monthly checks to arrive.

All about the brands

With Instagram, the video makers need to connect directly with brands, who are eager to reach the young, affluent audience that shuns TV and most other traditional media.

 

“If you’re a millennial or Gen-Z, you want to be on Instagram," notes Drew Baldwin, publisher of TubeFilter, a blog that monitors the online video scene.

Because of Stories and the increased attention to video, "there are more opportunities," for creators to make money online now, says Baldwin. "But it’s still a lot of work, and requires continual hustle.”

Russett, 21, who also posts videos on YouTube, doesn't see it that way.

With 4 million followers on Instagram, (vs. nearly 300,000 subscribers on YouTube,) she says she gets the most response on Instagram, where she can be seen posing in different outfits and displaying her favorite soaps, and videos of getting eyelashes applied at the beauty parlor.

 

Russett says she wakes up every morning and checks her app to see what kind of deals might be awaiting her. Marketers are eager to be seen on the app: research firm Mediakix says the Instagram influencer market is worth $1 billion, and will grow to $2 billion by 2019.

Brands contact Russett —"they’re the ones reaching out” — and as someone with over 4 million followers on Instagram, they offer what she says is “thousands” of dollars for being seen with the products or wearing them. In recent posts, she wore lashes by Sheila Bella and showed off soap from Soap and Glory.

Many posts featuring the brands are labeled as #sponsored or #sp. And the regulatory body that governs advertising has taken notice of all these paid product placements.

Instagram is introducing a new, stronger and more visible “Paid Partnership With" hashtag at the top of the post, similar to Facebook's "sponsored" tag on posts and rolling it out this year. The Federal Trade Commission in April wrote letters to many prominent Instagram celebrities, warning them that their posts didn’t have enough disclosures. (A search of the hashtag "sponsored" shows over 750,000 current posts on Instagram.)

Dash Hudson, a company that helps brands connects with popular Instagrammers, says performers in Russett’s range can get anywhere from $2,000 to $15,000 for a post, with full-scale celebrities getting $15,000 to $500,000.

There's also money to be made if for those with substantial, but smaller followings. “Anyone with a following of over 100,000 can charge in the thousands for an Instagram post,” says Helene Heath, a senior writer for Dash Hudson’s blog.

Online firms also aid in matching creators and brands, including Google-owned FameBit and Reelio Labs, which take commissions for marrying the two.

Creators have many places to go, but blog writer Baldwin says they like to be where their followers are. When it comes to Facebook, which generates hundreds of millions of video views for major publishers, their audiences aren’t there. They're on the younger apps, like Facebook-owned Instagram, Live.me, Live.ly and YouNow—places where their parents probably don't hang out.

Instagram's rise can be explained by a new crop of young users, who "communicate through pictures and captions," says Paula Kaplan, the Chief Talent Officer for the AwesomenessTV channel. "This is their form of expression, while the generation before them typed words."

And what of user backlash? Who wants products shoved down their throats?

Ariel Martin,  who goes by the stage name of Baby Ariel, defends her sponsored Nordstrom posts.

“Nordstrom is about a dress,” says the 16-year-old, who has 7 million followers on Instagram. “I love dresses. If I post `I love this cute dress,' I mean it.”

 

© 2017 USATODAY.COM


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