How To Monetize Your Audience
Read Time: Less than 4 minutes
Last update: 2024/05/08
The world talks a lot about the importance of creating your online brand. The reason being, whether you are a business or an influencer, your audience is one of your biggest asset that will grow with time if you keep nurturing it. The question is: how do you make money off of it?
There are 4 ways to monetize an audience:
Affiliates
Sponsorships
Partnerships
Create Your Own Offer
This week newsletter will go over these four ways of monetization in details.
The information is a summary of Alex Hormozi’s video: “If I Wanted to Monetize An Audience in 2024, This is What I Would Do”.
1. Affiliates
You see a lot of YouTubers insert Amazon links in their video description for a product/service they endorse.
They basically get paid after they make sales for a business.
It’s the fastest way to make money and it has low risk involved, i.e. nothing will happen if you’re not able to sell the offer.
A lot of business already have affiliate programs in place with their own terms and conditions. The reason is because they are happy that people are promoting their business for them. It’s an easy deal. The value of an affiliate program is determine by how reliable the business is, i.e. if the offer of the business is going to be replaced by AI in the futur and cannot adapt, then it's not very valuable. On the opposite, if the business stands strong, adapts with changes and grows over time, then it's more valuable.
2. Sponsorships
The business pays you to advertise on their behalf and endorse their offer.
You do not actually “sell” the product, you are doing promotion.
You will get paid as traffic source in CPM (cost per thousands of impressions). For example, if an advertiser pays $5 CPM, it means they are paying $5 for every one thousand times their ad is displayed, regardless of whether the user interacts with the ad or not.
They are monetizing your traffic.
The other way to get paid is via something called whitelisting. They take the post/content that you make, and run it as an ad, promoting it to an even bigger audience. Why? Because you don’t want to post continuously about that offer, otherwise your audience would be annoyed. So you would make a post, every now and then to not interrupt the value that you provide to your audience too much.
In whitelisting, the business is basically spending their money to promote your brand and theirs. It is a really nice partnership.
These deals are harder to come by and it varies based on the size of your audience relative to the size of the business you are dealing with.
3. Partnerships
You do one or a combination of these two deals mentioned previously for equity.
It can either be a minority or majority deal:
Minority deal = if they’re huge and you’re tiny
Majority deal = if you’re huge and they’re tiny
That can range from 0.01% to 99% of the business’ equity
You can do performance-based or commission-based arrangement. For example, if you bring in 1000 customers, you could receive 1% of the sales revenue generated by them with a cap at $x. If the resulting commission is less than x amount, you would receive the full 1% commission. However, if the commission exceeds the cap, you would receive x instead.
You usually want something upfront like equity, and then something based on the performance.
It’s usually a long-term deal and it’s more risk than sponsorships because, with sponsorships, you get paid no matter what.
It’s very valuable when you are able to do both affiliate and sponsorship. If you only take a sponsorship, you leave equity on the table.
It is more risky because you might never get paid if the business doesn’t sell (amongst other things).
4. Start Your Own Brand
You create a product or service and promote it to your audience and get paid for it.
You can also “white label”, i.e. go to a business that manufactures a product and ask to put your logo on it. It’s faster than creating your own product, and it cost less money, but it’s not as authentic as if you created the product yourself.
At this point, you can collaborate with other influencers by offering them one of these deals to promote your offer, therefore leveraging their audience.
So, to recap:
You can borrow elements from all of these types of deals to tweak them and make it right for everyone involved.
When making the deal, keep in mind the following:
The exit value, i.e. the valuation or worth of a company at the point of its exit, which typically occurs when you sell your equity
What cash is going to be in or out of the business
How much work do you have to do
How much risk is involved
By balancing these, you will be able to find the right deal for you.
Now if you need help with building your online brand, we can help you with that. With our help, you’ll be able to post content consistently, helping you grow your audience and ultimately monetize it.
I suggest getting in contact with us via email or book a call. That way, we can look into your needs and see if we’re a good fit for each other.
I’ll see you next week,
Tony
Founder of Audio Vision Productions
