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How Do Paid Partnerships Make Money On Instagram?

Instagram Marketing
How do paid partnerships make money on Instagram?

Paid partnerships are all the rage these days, especially on Instagram, where branded content tools help brands and Instagram influencers maintain transparency within the platform.

What Does Paid Partnership Mean On Instagram? 

A paid partnership on Instagram is when an influencer shares a photo, story, or reel in exchange for some kind of compensation and tags the company account as their Business Partner. 

A paid partnership label reading “Paid partnership with [brand]” will appear at the top of these sponsored posts (where the location usually goes) and will link to the brand’s account. The paid partnership label provides transparency to everyone about a post being paid for and helps establish credibility for influencers gaining business partners.

If you’re wondering how paid partnerships make money on Instagram, all of that really happens offline, in the negotiation stage between brands and their influencer partners. There are different cost structures that brands and influencers can come to an agreement on, such as a flat fee, cost per engagement, revenue share, and more.

What Are The Benefits Of The Paid Partnership Feature On Instagram? 

There are a number of benefits of paid partnerships on Instagram, and the tool has really helped make it easy to ensure transparency between all parties on the platform. Here are a few benefits of the paid partnership feature:

  • Compliance with FTC guidelines. The Federal Trade Commission (FTC) requires influencers to disclose any sponsored content. The paid partnership label feature makes it easy to add a clear disclosure that meets their guidelines, helping both influencers and brands comply with regulations.
  • Improved transparency and trust. The paid partnership feature helps improve transparency by clearly indicating which posts are sponsored, helping followers better understand the nature of the influencer-brand relationship. It also helps influencers build trust and credibility with their followers.
  • Access to partnership data. Instagram provides data on the performance of sponsored content using the paid partnership feature, giving brands and influencers insights into the reach, engagement, and other metrics of the post. By allowing both brands and influencers to track the performance of sponsored content, the tool makes it easier to measure the impact of influencer campaigns.

How Do Influencers Get Paid On Instagram? 

Influencers can get paid on Instagram through multiple avenues. However, the payment structure for each of these methods can vary, and it typically depends on factors such as the influencer’s reach, engagement rate, and content quality. 

Some examples of how influencers can get paid on Instagram include:

  • Sponsored posts. In the most common form of paid partnerships, brands pay influencers to create content featuring their products or services in the form of a post. 
  • Affiliate marketing. Influencers can earn a commission on sales generated through unique affiliate links they share on their Instagram profiles. When a follower clicks on their unique link and makes a purchase, the influencer earns a percentage of the sale.
  • Product placements. Brands can send products to influencers for them to feature in their Instagram posts. In exchange, the influencers receive compensation, more merchandise, or other branded swag.
  • Brand ambassadorships. Influencers can be hired to promote a brand for a longer period, typically through a brand ambassador contract. This can include creating content for the brand, attending events, promoting the brand on social media, and more.
  • IGTV ads. Instagram allows influencers with a certain number of followers to monetize their IGTV videos by including ads in them. The revenue earned from the ads is shared between the influencer and Instagram.
  • Instagram Live. A final way influencers can earn money is not through their business partners but through their followers. Instagram allows influencers to receive donations from followers during a live stream if they have enabled live donations in their settings.

How Does Approval Work For Influencers On Instagram? 

To get started with using branded content and the paid partnership label on Instagram as an influencer, you’ll first need to have a professional creator account. To turn on your branded content tools if you’re eligible, you can head to “Settings,” click on “Creator” or “Account,” and click on “Branded Content” to tap to enable the tools. 

Once your branded content tools are on, brands will be able to review any incoming tag requests you send them and you’ll be able to post with the paid partnership label! Your brand partner can also choose to add you to a list of approved business partners to give auto-approval for your sponsored posts in the future. 

To create a post and tag a brand partner, click on “Advanced Settings” on the last page before sharing the post. For an Instagram story, you can click on the link icon within the features tab to tag a business partner. Additionally, in your settings, you can add a list of business partners, although they will need to approve this on their end before you can start tagging them.

How Lionize Can Help With Your Influencer Marketing Strategy

Lionize’s influencer marketing platform makes working with creators easy for brands. We streamline the entire process, from finding the right creators in your niche, to tracking campaign results. Book a Discovery Call with us today to see how we can help make influencer marketing simple for your band.