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The Business of Fashion Podcast

How Influencers Make Money

The Business of Fashion Podcast

The Business of Fashion

Fashion & Beauty, Business, Arts

4.6770 Ratings

🗓️ 8 October 2024

⏱️ 24 minutes

🧾️ Download transcript

Summary

The influencer landscape has shifted dramatically over the last decade. While the image of influencers posting flawless selfies on exotic, brand-sponsored trips still resonates, the reality has become far more complex. Influencers now host live shoppable streams, publish newsletters on Substack and engage in intimate group chats. Their goal is not just to build a following and wait for brands to come calling, but to establish multiple sources of income through affiliate links, brand deals, and subscription models.


“Influencers and creators have realised that they need to diversify and be on multiple platforms. They need to be connecting with their followers in multiple ways and have a deeper relationship with their followers,” says Diana Pearl, senior news and features editor.  “Even five years ago, there were people who didn't really take this industry very seriously and didn't realise the difference they could make for their brand. Now it is impossible to ignore.”


Key Insights:


  • In the evolving digital landscape, influencers and creators are no longer relying on a single platform for success. Diversifying their presence across platforms, from Instagram to Substack, is key. Pearl emphasises, “It’s really all just about diversification... not relying so much on one source, not having to rely so much on Instagram, the algorithm, affiliate links and brand deals.”


  • While macro-influencers may reach a broader audience, smaller influencers often have more engaged, loyal followers. “Once you get so big and you've got millions and millions of followers, you can't have that type of relationship with 5 million people the way you can with 100,000,” says Pearl.


  • The rivalry between influencer marketing platforms LTK and ShopMy highlights a shift in the landscape, with ShopMy offering influencers more control and transparency. Pearl explains that while LTK encourages creators to centralise their content on its app, ShopMy allows influencers to share across platforms. “We know our audience, we know what content resonates with them. But if you hand us this really detailed brief and expect us to act like a traditional ad agency... it’s just not going to come off as authentic,” Pearl explains.


  • The industry is becoming more nuanced, with clear distinctions emerging between influencers and creators. While creators focus on producing unique, engaging content, influencers drive sales and hold sway over purchasing decisions. Influence remains the key asset in the industry, one that can be translated across platforms like Instagram, TikTok, or Substack. "At the end of the day, the most valuable commodity in this business is influence," Pearl explains.


  • By understanding their goals and selecting the right partner to meet them, brands can optimise the impact of their influencer campaigns and better connect with their target audiences. “Brands just need to be smart about what are your goals, what’s the right type of person to achieve these goals or right type of partner and who should we go with from there?” says Pearl. 


Additional Resources:




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Transcript

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0:00.0

Hello and welcome to the debrief from the business of fashion, where each week we delve into our most popular B.OF professional stories with the correspondence who created them. I'm executive editor Brian Baskin.

0:18.0

And today we're talking about influencers.

0:25.7

For most of us, the image that comes to mind is if a young person dancing on TikTok or posting impossibly perfect selfies on a brand-sponsored trip to some exotic destination.

0:31.6

But that stereotype is increasingly outdated.

0:35.1

Today, the most successful influencers host shoppable live streams and

0:39.1

intimate group chats and publish daily newsletters on substack. They're independent operators in a way

0:44.8

that wasn't possible even a few years ago. At the same time, they haven't entirely broken free

0:50.1

of the whims of the algorithm. With me to discuss all of this is senior news and features editor

0:54.9

Diana Pearl, who has followed the changes sweeping the influencer world closely. Hi, Diana.

1:00.0

Welcome to the debrief podcast. Hi, Brian. Thanks for having me. So before we dig into the ins and outs

1:05.7

of affiliate links and substack economics, tell me what fascinates you about influencers. I have followed the influencer

1:13.1

world before influencer was even like a word in our cultural vernacular. I first started following

1:19.1

then bloggers when I was in college. So this was around like 2010, 2011. And at the time,

1:24.4

it was a totally different space. Most people weren't making money off of it.

1:28.4

Instagram didn't exist. Instagram didn't exist. You know, bloggers were just starting to go to fashion week. So you had, you know, the early, like, fashion bloggers, like a Brian Boy or Kiara of the blonde salad. But then you also had people like Rachel Parcell of Pink Piennys, who is a mom,

1:46.1

wife, now clothing brand owner in Utah or Julia Engel of Galmeans Glam, who just showed their

1:53.0

life. And it was all very casual and off the cuff. And I think it really just either exposed people

1:58.4

to a world that they weren't familiar with. You know,

2:01.5

like, I'm not a Mormon in Utah, so I was interested in learning more about what their lives

2:06.0

might be like or, you know, gave people a peek at something that was aspirational to them. Like,

2:10.8

I followed when I was in college a lot of people who were, you know, out of school and living in

2:16.2

New York and doing what I wanted to be doing

...

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