Social Media

What’s the Value of a Social Media Following?

date posted

10/10/24

read time

12 Mins

What is an influencer - how much do they make - value of an audience

Does Having a Large Social Media Following Drive Real Revenue in 2024?

The question of whether having hundreds of thousands of followers on platforms like Instagram drives real revenue is still relevant in 2024. The short answer is: it depends. While follower count is important, the real game-changer lies in engagement and monetization strategies. Simply having a large following doesn’t guarantee revenue unless the audience is engaged and responds to the content.

Engagement Rates Over Follower Count

It’s widely accepted that engagement rates—the percentage of followers who interact with content (likes, comments, shares)—are far more significant than follower numbers alone. Micro-influencers (10,000–100,000 followers) can have 4-7% engagement rates, whereas macro-influencers (100,000+ followers) tend to hover around 1-2%. This means while macro-influencers reach larger audiences, those followers might be less engaged, which makes monetizing that audience harder. Nano-influencers (500-10,000 followers), despite having smaller audiences, can deliver even better engagement rates, making them particularly valuable in niche markets.

Conversion and Niche Appeal

Beyond engagement, the ability to convert followers into paying customers is crucial. Influencers with highly specific niches (e.g., eco-friendly products or local services) tend to have better conversion rates. In 2024, micro-influencers in particular have shown a return on investment (ROI) of $6.50 for every $1 spent on influencer marketing. This makes them a powerful marketing asset, especially for brands looking to tap into niche audiences with high purchase intent.


How Do You Quantify the Value of a Social Following?

Quantifying the value of a social media following involves several metrics that allow businesses to evaluate whether a following translates into real value. Here are the top factors to consider:

1. Engagement Rate

Engagement rate remains a core metric in evaluating social media value. The higher the rate, the more likely it is that followers are invested in the content. Macro-influencers often have lower engagement rates (around 1-2%), while micro-influencers can see engagement rates closer to 4-7%. This is why businesses often prefer to work with smaller influencers who have more dedicated audiences.

2. Earned Media Value (EMV)

Earned Media Value (EMV) is another crucial metric for calculating the value of organic, unpaid exposure generated by influencer posts. The formula typically used is:EMV=(Total Impressions/1,000)×Cost Per Thousand Impressions (CPM)\text{EMV} = (\text{Total Impressions} / 1,000) \times \text{Cost Per Thousand Impressions (CPM)}EMV=(Total Impressions/1,000)×Cost Per Thousand Impressions (CPM)

On platforms like Instagram, the CPM usually ranges between $4-$5, which allows you to assign a monetary value to organic engagement. For example, if an influencer generates 500,000 impressions in a month, their EMV could be around $2,500. This calculation helps quantify the unpaid visibility and exposure the influencer generates, offering a tangible measure of the account’s value.

3. Monetization Strategies

Influencers with significant followings use various strategies to monetize their audiences. The most common methods include:

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  • Sponsored Posts: Macro-influencers charge anywhere from $5,000 to $10,000 per post, while micro-influencers may charge between $100 and $5,000, depending on their follower count and engagement rates.
  • Affiliate Marketing: Many influencers partner with brands to offer discount codes and earn commissions on sales. This is particularly popular in the fashion and lifestyle sectors.
  • Brand Partnerships: Long-term collaborations with brands provide influencers with stable income and offer brands continuous exposure. These partnerships are often more lucrative and can drive sustained engagement and awareness for both parties.

How Enduring is a Social Media Following? Is it Investable?

While a large social media following can generate revenue, it is also subject to risks, especially given how often platform algorithms and user preferences change. For investors, this brings up the question: is it sustainable?

Algorithmic Volatility and Platform Risks

Social media platforms like Instagram frequently update their algorithms, which can significantly impact an influencer’s ability to reach their audience. For example, Instagram’s 2024 shift towards prioritizing Reels over static images means influencers need to adapt their content strategies to remain relevant. If a business relies solely on one platform for revenue, this creates risk. Diversifying across platforms such as TikTok, YouTube, or LinkedIn can help mitigate these risks by spreading the reliance on a single algorithm.

Long-Term Sustainability

Maintaining the value of a social media following requires consistent, high-quality content that resonates with the audience. Authenticity is now more critical than ever, with 88% of consumers saying they trust online recommendations from influencers almost as much as recommendations from friends. Businesses looking to acquire social media-driven brands should pay close attention to whether the account is consistently delivering valuable, authentic content and maintaining or growing its engagement.


Final Thoughts: Is Social Media Following a Good Long-Term Investment?

In 2024, social media accounts with large followings can still generate significant revenue, but only if engagement rates, authenticity, and monetization strategies are strong. While follower count matters, real value comes from how effectively that following is engaged and converted into paying customers.

Key takeaways include:

  • Engagement rates are more important than follower count when assessing the value of a social media account.
  • Earned Media Value (EMV) provides a tangible way to calculate the monetary value of organic exposure.
  • Diversifying revenue streams through online courses, brand partnerships, and affiliate marketing is crucial for long-term sustainability.

For businesses considering acquiring a company with a large social media following, it’s essential to evaluate the engagement, revenue streams, and adaptability of the account. A social following can be a valuable asset—but only if it’s backed by real engagement and an ability to adapt to the ever-changing social media landscape.

How much do Instagram influencers make? - Kim Kardashian

How to Get Started Investing with Influencers

If you’re looking to dive into influencer marketing as a strategy—whether through direct investment, partnerships, or by acquiring companies with social followings—here’s a step-by-step guide to get you started.

1. Research and Identify Niche Influencers

Before investing in influencer marketing, it’s crucial to identify the right influencers for your brand. Start by looking for influencers who align with your industry and target audience. Micro- and nano-influencers (those with fewer than 100,000 followers) often offer higher engagement rates than large, celebrity influencers. They are also more cost-effective, allowing brands to build strong connections with their niche audience.

Platforms like Upfluence, Dash Hudson, and Influencity help brands discover influencers, analyze their engagement rates, and identify the most relevant personalities for their target market. Once you have a list of potential influencers, engage with them by following their content and seeing how they interact with their audience.

2. Set Clear Goals and KPIs

Like any investment, your success with influencers depends on having clear goals. Are you aiming to build brand awareness, increase website traffic, or boost sales? Each goal requires a different strategy and metric for measurement.

Key Performance Indicators (KPIs) to track include:

  • Engagement Rate (likes, shares, comments)
  • Earned Media Value (EMV) (calculated by the impressions generated vs. the cost if you had paid for those impressions)
  • Conversion Rate (how many people took action based on influencer content, such as using a discount code or clicking a link)

In B2C, these KPIs are relatively straightforward to measure through direct sales or website traffic. In B2B, however, the goals may focus more on building authority or generating qualified leads, which takes longer to track but can yield impressive long-term ROI.

3. Launch a Pilot Campaign

Before committing significant funds, start with a pilot campaign. Reach out to a few selected influencers and negotiate deals for posts, stories, or videos. This allows you to test how well influencer marketing resonates with your audience. By experimenting with different influencers, you’ll gain insight into which type of content performs best (video, stories, Reels, etc.).

For example, a small HVAC business might partner with local influencers to promote services such as seasonal maintenance. Influencers in the local community can post about the importance of upkeep, tagging the HVAC company and offering discounts for followers. This increases both brand awareness and trust in a local area.


How to Use Influencer Marketing in B2B

While influencer marketing is typically associated with B2C, it’s becoming increasingly relevant in B2B as well. In fact, B2B influencers can help your company establish credibility, build thought leadership, and create valuable connections in your industry.

1. Leverage Industry Thought Leaders

In B2B, influencers aren’t necessarily Instagram personalities—they could be industry experts, bloggers, LinkedIn thought leaders, or business consultants. These individuals already have credibility and trust within your industry, making them ideal partners for B2B influencer marketing.

For example, a SaaS company might partner with a tech blogger who reviews products and has an audience of IT managers. By doing an in-depth feature on the SaaS tool, the influencer provides credibility, helping B2B customers make more informed decisions. LinkedIn is especially powerful for B2B influencers, as it’s a platform where decision-makers spend time researching solutions.

2. Create Educational Content

B2B audiences often look for detailed, educational content that helps solve specific problems. Influencers in this space are well-suited to deliver webinars, whitepapers, case studies, or in-depth product reviews. Partnering with B2B influencers to create content that addresses pain points can help build trust and establish your brand as a thought leader.

For instance, a B2B cybersecurity company could collaborate with a leading cybersecurity expert to host a webinar about emerging threats in the field. The influencer’s credibility enhances the company’s position as a trusted authority, while the event itself generates qualified leads.

3. Build Long-Term Partnerships

Unlike the quick campaigns often seen in B2C, B2B influencer marketing thrives on long-term relationships. Consistent content creation and multiple touchpoints are key to nurturing leads and driving conversions in a business context. Look for ways to integrate influencers into your overall content strategy—whether through regular blog contributions, podcast appearances, or co-hosting live events.

B2B buyers tend to spend more time researching solutions, so the relationship between influencers and your company must appear credible and sustained. Establishing these ongoing partnerships helps build familiarity and trust over time, which can ultimately drive purchasing decisions.


Shoulder Topics: Expanding Your Strategy with Influencers

To maximize the value of influencer marketing, consider integrating it into a broader digital strategy. Here are some shoulder topics and tactics that can help you further capitalize on your investment:

1. Affiliate Marketing with Influencers

Affiliate marketing offers a win-win scenario for influencers and businesses. Influencers promote your products through unique referral links or discount codes, and they receive a commission for each sale generated. This strategy aligns particularly well with influencer marketing because it incentivizes influencers to focus on driving conversions, ensuring a higher ROI for businesses.

For instance, in the beauty industry, influencers frequently offer their followers special discount codes in exchange for a commission on sales. Affiliate marketing can also work in B2B, with industry influencers promoting software or services to a targeted professional audience.

2. Repurpose Influencer Content for Paid Ads

Another strategy to extend the value of your influencer investment is to repurpose influencer-generated content into paid ads. User-generated content (UGC) tends to perform better than polished, branded content because it feels more authentic to the audience. By turning influencer posts, videos, or testimonials into Facebook ads, Instagram ads, or even Google Display ads, you can reach a wider audience and build social proof.

3. Use Influencers for Product Development

Many brands involve influencers in their product development process. By leveraging their direct connection with consumers, influencers can provide valuable insights into what their audience is looking for in a product. For example, beauty brands often work with influencers to design new products or collections based on audience feedback.

In a B2B context, this can be equally effective. A software company could engage with influencers who specialize in workflow automation to get feedback on new features or tools, allowing the company to tailor its product to the actual needs of professionals in the space.

 

Some final thoughts on the true value of a social media audience

“It’s really hard to measure true influence, but is nonetheless exceedingly important.” – Duane Foster, The Vice President of Organic Search Operations at Bruce Clay

There are calculators online that give you the ability to see how what your media value is. Here are a couple of links if you want to see what yours is worth:

Earned Media Value

It is crazy to see how much money you can make off of a social media account.

But then again – anyone who can convince people to buy something at scale will always have more opportunities to wield that influence, particularly if they can do it in a way that feels authentic and creates an impression that people identify with and a community people want to be a part of.

Final Thoughts on Investing with Influencers

Whether you’re working in B2C or B2B, influencer marketing offers a high-impact strategy for building trust, driving conversions, and increasing brand awareness. While the tactics differ across industries, the underlying principles remain the same: choosing the right influencers, setting clear goals, and fostering authentic connections with the audience.

To get started, focus on building relationships with niche influencers, experiment with small-scale campaigns, and always track the results to refine your strategy. By integrating influencer marketing into a broader digital plan, you can tap into a growing market and expand your reach in a highly targeted way.

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