Update March 5, 2019: Forbes released it’s annual list of the world’s richest people and not only did Kylie Jenner make the list for the first time, but she’s also the youngest self-made billionaire of all time. This can be credited mostly to her wildly successful makeup brand, Kylie Cosmetics. At 21, she is now worth $1 billion.
This story was originally published on July 12, 2018.
In her interview with Forbes, Jenner attributed much of her success to social media. Indeed, there's another, lesser known, though increasingly important, list where Jenner reigns supreme: The Instagram Rich List. This annual ranking, released this week, is compiled by Hopper, a UK-based company that produces a scheduling and analytics tool for Instagram users. The company estimates that Jenner, who boasts 111 million followers, can bring in $1,000,000 per sponsored post. Yes, that's for a single sponsored post. It's more than you, me, and probably all of our best friends combined make in a single year. (It isn't called the rich list for nothing.)
Selena Gomez, number two on the list, can bring in an estimated $800,000 USD per post according to Hopper's research. The rest of the top 10 is rounded out by a trio of buff soccer stars (Lionel Messi, Neymar da Silva Santos Jr., Cristiano Ronaldo), Queen Bey, Dwayne Johnson, the newly betrothed Bieber, and other members of the Kardashian-Jenner clan (Kim and Kendall). Khloé, who is just outside of the top 10 in the eleventh spot, makes an estimated $480,000 USD per post.
If these figures surprise you, they shouldn't. They are just further proof of what the increasing number of brands who are putting substantial budgets behind SponCon and dark ads (when a brand simply uses an influencer's name to promote a product, without requiring a post) already know: There is big money to be made on a (sponsored) 'gram. In March, social media influencer agency MediaKix predicted that influencer marketing will be a $5 to $10 billion industry within the next five years, as brands devote larger portions of their marketing budgets to the individuals who command audiences they want to reach.
This is the way sponsorships have always worked, and Instagram is just their newest, most quickly growing medium. It isn't hard to believe that Instagram, or rather someone's presence on Instagram, could someday become one of the largest determinants of where a celebrity ranks on annual money lists. The bigger someone's Instagram following and engagement (measured through factors such as number of likes and comments), the higher their status in the Insta SponCon world. The higher their status, the more brands want to work with them. The more brands want to work with them, the pickier they can get when choosing deals and negotiating rates. And when you get to this point, that's when you can charge six figure rates à la a Kardashian.
This begs a larger question, though: Will influencer marketing on Instagram reach a point where the bubble bursts, SponCon becomes less effective, and individual profits drop?
As a platform, Instagram currently shows no sign of slowing down. Facebook's crown jewel celebrated one billion monthly active users in June, up from 800 million in September 2017. If not Instagram itself, then what about the brands advertising there?
Mediakix predicts that in 2018, brands will spend $1.6 billion USD on influencer marketing on Instagram. But this spend may not always have the desired result. When speaking about the changing meaning of public figures on Instagram earlier this week, Kate Wolff, the SVP of Client Services at relationship marketing agency RQ, said she's started seeing a backlash against the way influencer marketing currently operates:
"People now know that a lot of content that comes from influencers is BS, for lack of a better term. They’re doing it to get a paycheck and brands will pay whatever amount of money to be associated with someone’s audience and have them extend their reach into a new space."
If celebrity influencers aren't careful they could start to build mistrust among their fanbases. This would prove problematic, since "their value is based on is their loyal fanbase," Wolff said. "When you dilute that, the less impactful the programming and entire subset of influencer marketing will be." Let's not forget Kim Kardashian West's "appetite suppressant lollipop" snafu this past May. (Note, however, that Kardashian West is still ranked fourth on Hopper's Rich List.)
For now, Kylie Jenner's Instagram rates may continue to climb and her ranking on Forbes' money lists go up as a result. But if the current climate of mistrust continues, all it may take is a few misguided posts for the SponCon success to come tumbling down.