Aspiring influencers, be warned that the “freebies” may come with a catch, and overnight viral success can just as quickly evaporate.
Influencers can earn thousands of dollars for a single social media deal, and those with big enough followings can score everything from electronics to flooring and entire kitchens.
Talent manager Molly Littlejohn told Nadine Higgins on The Prosperity Project podcast there’s serious money to be made from social media, with some creators earning fulltime incomes from their content.
She says remuneration for paid deals can be “definitely in the thousands”, with $2000 to $5000 possible depending on the influencer, what they’re required to post, and how the brand can use and promote the content.
Then there are the freebies. “You can get anything,” Littlejohn says.
PR products are often sent with no obligation to post, but “when you get something like a bed that’s worth $4000 or electronics or a new kitchen, that’s when it does become a little bit murky” as to what the brand expects in return.
There can also be another catch: tax.
The IRD’s guidance says, “In many cases, if you receive products or benefits [for example, gifts] through your content creation activity, the value of the product or benefit will be taxable income.”
That means the value of the “free” product may need to be declared as income – potentially leaving the influencer with a tax bill despite not receiving any cash.
Littlejohn says influencers should talk to their accountant about “everything that you’re doing and everything you receive”.
While influencing can become a lucrative fulltime career – it has its risks. Littlejohn has seen influencers quit their jobs, only to have the deals dry up.
“We’ve had instances where people have had to go back to work because there’s new flavours of the month, the algorithm is trying to push new faces, and brands are wanting new faces as well,” she says.
Her advice for aspiring influencers is to concentrate less on chasing viral posts and more on building a loyal following that sticks around. “For most successful content creators, it’s about building a community.”
Watch or listen to the full episode of The Prosperity Project for more.
The Prosperity Project is hosted by Nadine Higgins, an experienced broadcaster and financial adviser.
Follow the show at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts. New episodes are released every Monday.