Social media, influencers and the love of money

In the age of social media, it is easy to gain insights into the lives of famous people – and to feel surprisingly close to them. However, what almost feels like a friendship for fans in front of their (mobile) screens is primarily a job for the creators that earns them money. We need to make children and young people in particular aware of the business model behind this supposed closeness.

How do influencers earn money?

For many young people, it sounds dreamy and tempting to get rich with short or longer internet videos. In reality, however, highly successful profiles usually involve a whole team, precise production planning and a sophisticated marketing strategy. This is because the content must be specifically designed and played out in such a way that it generates reach – and ultimately revenue.

Influencers earn their money in various ways:

• Direct gifts and payments from fans: When influencers are live on platforms such as TikTok or Twitch, they interact with their audience via chat or reactions. Fans, in turn, can buy virtual gifts, such as coins or emotes, which they give away during a stream. Some creators also offer exclusive, paid content via platforms such as Patreon.
• Advertising and sponsorship: It is no coincidence that influencers often present and promote products to their audience that they are – supposedly or actually – enthusiastic about. There are often advertising contracts behind this. The more reach, the more lucrative the contracts. Those with fewer followers sometimes ‘only’ get free products for their advertising, while the contracts can be quite lucrative for large accounts.
• Affiliate links: It is not uncommon for internet stars to not only show products, but also link to them directly in stories or their profile. What often seems like a practical service is usually another source of income: If a product is purchased via this affiliate link, influencers receive a commission. The commercial nature of these links is not always recognizable.
• Own products and brands: As their fame grows, they often create their own fashion, beauty, jewelry or lifestyle products. Fans like to buy these to support their favorite creators or to feel (more) connected to them.

Why do these marketing strategies work so well with children and young people?

For children and young people, ‘their’ influencers are often important role models and idols. They enjoy a high level of trust among young people, their content and statements are rarely questioned and their ‘product recommendations‘ are readily accepted.

By using the advertised products, young people feel closer to the lifestyle of the influencers and stars as well as to themselves and can thus express their own identity or affiliation.

Influencer marketing is aimed much more directly and precisely at specific target groups and has a very personal impact, which is why it has long been more important and more successful than traditional TV and radio commercials.

What can be problematic?

Advertising is not recognizedRecommendations appear personal and honest, but are often paid for. If this is not recognized, trust can be exploited.

Closeness is misunderstood: Virtual interactions – for example via live chats or gifts to influencers – can create the impression of genuine relationships that do not exist in reality. The relationship is “one-sided”, as the fans are usually an anonymous mass for the influencer in question.

Consumer pressure arises: Creators often show a lot of new products and a lifestyle full of “must-haves”. This can distort expectations, affect self-esteem and lead to financial problems.

What parents should pay attention

Stay up to date and talk to your child about their consumer behavior. Influencers play an important role in guiding children and young people. Be understanding and show interest. Ask your child which creators they follow and why. Take a look at their content together and talk about what you have seen.

For many children, what their peers use and do is important. The need to belong is part of their development. Help your child set up a social media account if they want to be on these platforms, and together make sure they have privacy settings and provide truthful age information so that the platforms’ safety precautions can take effect.

Talk about how influencers earn money, how your child recognizes advertising, the strategies behind it and how good purchasing decisions can be made.

To avoid unexpected costs, we have created a checklist for you on how you can limit in-app purchases on your child’s device.

If you would like to find out more about this topic, take a look at our colleagues at klicksafe over. They describe how exactly YouTubers earn money.