If Content Is Free, How Do The Content Creators Make Money?
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How Do The People You Follow Online Make Money?
Hey there. I still suspect this topic is only going to be interesting to me. But when I brought it up in my most recent newsletter, it got lots of interest from readers. So I’m going to (nervously) share. This newsletter started as a revenue explainer and then drifted into a philosophical discussion about consuming free content. I hope you enjoy!
I always cheer for an "exposure doesn't pay the rent" tweet and retweeted this thread instantly. Click through to read all the examples of people who expected this songwriter to write songs for them for free.
Shortly after I retweeted, I saw a note from a reader, it was a blog comment, casually asking me to create a post about a topic they are interested in. And of course, we can assume that if I create that post, that reader expects they will get to read that post for free. To be clear, just like this blog reader, I too have consumed free content online for many years. We all have.
The reader didn’t mean any harm by the request, and I wasn’t offended even a little bit. It was a positive comment and very supportive. Yet, if I fulfill their request, and create the requested blog post, it will take 25+ hours of work, and considerable out-of-pocket expense. It will require research, errands, writing, photography, editing (both words and images), up-to-date software knowledge, marketing expertise, social media expertise, and more.
It’s clear from their request that the reader will benefit by my work in creating the blog post. But something we rarely consider: What will the content creator get out of it? Why would I spend that time creating content that is consumed for free? Should I expect to be compensated for that work? If yes, how should I be compensated for that work?
I've been a Content Creator or Influencer since 2006, before the terms "content creator" and “influencer” existed. Heck, before the term “mommy blogger” existed. Which means, I've been making 100% FREE content for 16 years. Over 6000 blog posts. over 15,000 Instagram Story segments. Over 2400 Instagram Posts. Innumerable Tweets. Over 40 short films. Etc. ALL free for people who want to read or watch or consume what I create.
Starting around 2010, for about 8 years, I was able to make a good living from creating this free content. I’m nothing but grateful that I was able to make a career of this work for so many years. For those of you who wonder how the people you follow make money, here’s a 101 course. If you are offering free content, there are 3 main options to earn money:
1- Display ads
These are the rectangle-shaped ads (some tall, some wide, some square-ish) you see in the margins and in the middle of posts, or as a header or footer on a website.
The display ads you see are based on your own internet searches and the cookies on your laptop or phone. So when I look at my website, the ads I see are usually for French companies and products, because I am currently based in France. But you could look at the same page on my website that I’m looking at, and likely see very different display ads. The content creator typically has no idea what ads readers are seeing on the content creator’s website.
From 2005-2010 display ads could earn a lot of money if your blog was getting a lot of traffic. Now it's pennies compared to what it was. I don't think I know anyone personally who is making a living right now in 2022 from display ads.
Since I started blogging and creating content in 2010, I mostly missed the display-ads hey-day. For all these years, I’ve made some amount of money every month from display ads, but nothing close enough to create a full-time income.
The nice thing about display ads is they don’t require much maintenance from the content creator. You get set up with an Ad Network, and they do the maintenance (and take a cut of the earnings). The dumb thing about display ads is that they make your website ugly and can be disruptive or unpleasant for the reader.
2- Affiliate links
Affiliate payments are like a finders fee that a company pays a Content Creator or Influencer if the Creator generates new sales for the company. So if you see a post that's like the “10 Best Lunchboxes for Commuting”, each of those lunchboxes will have a product link with an affiliate code in it. When you click on the product link, the product website (like Asos, Nordstrom, Anthropologie, West Elm, Amazon, etc.) will know you came from that 10 Best Lunchboxes post. If you make a purchase, the price won't increase for you, but the person who published the article will get a small payment.
The affiliate payment is typically around 3% of the purchase (it can be lower or higher). So if you spend $10 on a lunchbox, the Content Creator will get like 30 cents. If you end up buying lots of things at that lunchbox website, and spend $100, the Content Creator might get like $3.50. Of all the Content Creators who use affiliate links, only a very small percentage earn enough from those links to make a full-time living. For most, it's a small side-revenue-stream. Why? Well, if you’re an essay writer, but you take time away from your essay writing to create daily shopping posts, there’s a good chance your readers will stop reading/following. They were following you for your essays, not your shopping recommendations.
It’s not always as clear cut as that, but it’s fair to say that the creators who make a full-time income from affiliate links mostly create content focused on shopping and product reviews. There are people who do this very well! Corrine of Mint Arrow comes to mind — she gives daily heads up on deals and sales. Jessica Turner is also a queen of affiliate links and product reviews. But of course, not every content creator makes content that is product-focused, and you wouldn’t want them to.
In addition, we saw affiliate fees drop dramatically in early 2020 — before the pandemic. For example, I heard from several content creators who did holiday gift guides in 2019 and earned, let’s say $2500 in affiliate links. But then, they did holiday gift guides in 2020 — which drove way more sales because it was the first pandemic holiday and online shopping was up, up, up — and they actually earned less money than in 2019, because fees had dropped so much. They earned less money, even though they had created more sales.
Content creators don’t really have control over the affiliate fees they receive. Amazon, and other retailers can set whatever affiliate rates they want, and then Content Creators can choose to opt-in or not.
A big pro about affiliate links is that it feels like a good system. If an Influencer finds a cool product and introduces it to you, as a consumer you’re happy that Nordstrom or Amazon gives them a cut of the sale. It makes sense to people. A big con about affiliate links is that affiliate codes are not available for many, many products and services. Especially products from smaller companies. So if a Content Creator makes a Gift Guide featuring small independent shops, there are most likely no affiliate codes in those product links. Which means the content creator put 40+ hours into creating that guide, but they are not compensated at all. They are just doing it to be supportive of those small businesses.
Another con is that managing affiliate links, affiliate networks, and affiliate relationships takes quite a bit of administrative time. And that means time away from actually creating content. I use affiliate links in a very limited way and I still have to manage accounts with 4 different affiliate networks. Frankly, it rarely produces enough income to make that time investment worthwhile.
3- Sponsored Posts
Sponsored posts are when a company hires a Content Creator to create content about their product — to show how it works, or why it's awesome. I've created hundreds of these posts for big and small companies. In the olden 2012 days, the company would just purchase a sponsored blog post. Later, the company would buy a blog post and expect you to "amplify it" on Facebook and Twitter and Instagram. These days, they might just hire you for multiple Instagram Stories or a TikTok video, but not request a blog post or other content.
A blog or Instagram feed full of sponsored posts is a big turnoff; most Content Creators find that for every sponsored post they make, they need to create at least 4 that aren't sponsored. So if you have 2 sponsored posts scheduled for one week, you'll need to make and publish 10 posts total that same week.
It seems like it would be easy to pair an Influencer up with brands they use and love in real life. They’re doing a renovation? Pair them with Sherwin-Williams! They’re a 3rd generation Honda driver? Honda should sponsor them! They love a Target-run? Target is an ideal sponsor!
Turns out it doesn’t work like that. Not even close. Sponsored posts get complicated fast.
If their income is dependent on sponsored content, Content Creators feel compelled to work with pretty much any company who reaches out with a decent budget — even if the company isn’t a perfect fit or seems out of nowhere. If you see a DIY jewelry blogger randomly do a post about how to make a bejeweled toothbrush holder, that’s because a toothpaste company reached out and the jewelry blogger needed to earn some money. Is toothpaste a perfect fit sponsor-wise? No. But the content creator manages to create some really good content anyway, and get compensated for their work. (They will also likely have to deal with readers saying: This post is really dumb. I come here for posts about how to make earrings, not read about toothpaste. Plus, the CEO of that toothpaste company is corrupt. How dare you work with them?!!)
Even when it seems like a perfect fit, it’s not a perfect fit. I’ve worked with Target, a company I sincerely love, many times. In an ideal situation, I would say: Target, I’m going to go through the store and pick products to decorate my house for Easter, and share photos with my readers, and you can sponsor that post. Instead, it works like this: Target reached out to me and asked me to create content about a new line of pillows and bedding and accessories for young kids, including specific products that had to be in the photos.
Most of my kids had aged out of this line, but Flora June was still young and a good fit. Unfortunately, I couldn’t do a bedroom makeover for her because she shared a room with 3 older sisters, and because I had just given a tour of their newly renovated and redesigned room. I couldn’t create content where I redesigned a room I had just-redesigned the week before.
So instead, I created a photo shoot featuring a cozy little corner play area in our family room with lots of products from Target’s new line. And it turned out so cute! And was a great introduction to this new line of products! But it was all fake. The cozy little area was immediately removed as soon as the photoshoot was done. We didn’t need the products, we didn’t need another cozy spot (we already had plenty). It was created purely for photos, so that I could get paid.
Working with Target seems like a perfect fit. But if the content creator doesn’t have control over what they are featuring, and they very rarely do, you can still end up with inauthentic content. It means that the Content Creator needs to create content they probably weren't interested in creating. There was no option where I could say, hey Target, instead of that children’s product line, what if I promote this new kitchen line? Target is a massive company; the person who is trying to get influencers to write about the children’s bedroom line has nothing to do with the kitchen department, and has no idea who the kitchen department people are.
If a content creator doesn’t want to accept the random sponsored content that comes their way, they can try to develop specific relationships with brands they want to work with. This is what that means: A content creator attends a conference to try and meet a brand rep in person. They cultivate a relationship with them, follow the brand rep on Instagram, send a gift for the new baby, etc.. They tag or link to the brand (for free) lots of times to build good will. They build a professional pitch presentation. They secure a meeting and do the presentation. They negotiate (what will be created, and what the payment will be) for several months. They finally secure a contact.
This can easily take a year, and maybe one in 15 pitches ends up in a contract. It’s a huge risk and requires a huge amount of time; it’s essentially a full-time job. Consider that most content creators are working on their own or with a tiny team (like one part-time assistant). They can concentrate on photography, styling, writing, creating, building, etc. Or they can concentrate on pitching and selling sponsored posts. It’s generally not plausible to do both.
On Wednesday, I shared a tour of the Small House and received many DMs suggesting I should have deVOL Kitchens (a UK-based company I adore) sponsor the kitchen renovation. I’m in favor of such a sponsorship! But I have no contacts at deVOL. I’ve never seen them work with influencers before and have no idea if they offer sponsorships. I do know they don’t have installers here in France, so that would have be handled separately, and how would that work? If I’m ready to start the kitchen next month, is it worth pausing the work for many months, and spending a lot of time trying to cold-call-pitch deVOL and see if they’ll sponsor? I agree they’d be a perfect fit as a sponsor, but I guess not such a perfect fit, since I’m not sure they even offer sponsorships.
See what I mean? It gets complicated fast.
It would be great if it worked like podcasts. On podcasts, the host will promote the advertiser, and the advertiser doesn’t have to be related at all to the content of the podcast. Like Squarespace, a company that makes websites, could sponsor a podcast about cooking.
That style of advertising never really developed for non-podcast content creators. It would be lovely if I could write a blog post or do a series of Instagram stories about clearing out a room in the Small House, and include a little blurb at the beginning and end about Squarespace. But I’ve never seen it done. If Squarespace sponsors a non-podcast content creator, they’ll expect the sponsored content to be directly about Squarespace — like a series of Instagram stories, or a blog post, showing how to create a website.
The biggest benefit to Sponsored Content is that historically it has paid well if you have a big audience who likes to engage with your content. I mentioned above that I made a full-time income from content creation for about 8 years. And that was 95% due to sponsored content (and 5% due to affiliate links and display ads). Interestingly, since 2018, I’ve seen the number of sponsored posts from Content Creators drop to almost nothing, even as their follower numbers grow and their engagement increases.
Two big negatives about sponsored content are: 1) Sponsored posts take about twice as much time to create and manage as non-sponsored content — because of pitching the idea, getting approvals, making sponsor-requested changes, giving reports on statistics, etc..
2) No matter who the sponsor is, or how wholesome the product is, some readers will protest about sponsored content — and that takes significant time to manage. If one week you write a non-sponsored post discussing how your household is trying to reduce waste and how challenging it is, and then the next week you write a sponsored post for an organic yogurt company you love, holy moly your readers will yell at you for weeks about how inauthentic and fake you are. Why? Because the yogurt company puts its yogurt in packaging that exists and has to be thrown away. (How dare you work with a sponsor that uses packaging! Also, some people are lactose-intolerant! You’re a horrible person if you promote dairy!)
Managing those comments, responding thoughtfully, and mediating serious discussions, takes a huge amount of time and emotional labor.
There Are Other Options, But They’re All Built On Free Content Too
So: display ads, affiliate links, and sponsored posts are the main three things that have enabled free content for the last 15 years. And lately, revenue from all three has become so minimized that for many (most?) content creators, it’s no longer liveable.
Yes, there are other ways to monetize beyond the three I discussed. You can use free content to draw people in and then sell a product — like an ebook or online class. It’s sort of like offering a free app, and then requiring a paid upgrade for certain content.
You can use free content to build an audience and then use that platform to get a book deal or start another project — like a line of candles or tote bags whatever you’re into. In my case, my audience at Design Mom was big enough that when I wanted to launch a conference, Alt Summit, with my sister, Sara, I could use my contacts and audience reach to help find speakers and sponsors. (Side note: In 2017 I bought my sister’s shares in the conference and I shifted my primary income to Alt Summit instead of sponsored content. This has worked well! Except for the pandemic and not being able to hold a conference. Hah!)
In the case of a podcast, you could make free episodes until you have enough downloads that you can join a podcast network and get sponsors (by the way, I think of podcast ads as a sort-of combination of sponsored posts and display ads).
But in all of these cases, you’ll need to work with no compensation for quite a while (possibly years!) as you attempt to build a new revenue stream. And, in all of these cases, the content is free for people to read or watch or listen to, and people expect the content to be free.
The content creator might be making money “around” the content, or they might not. The audience may not be aware of how the content creator is being compensated (or not being compensated) at all. They’re just used to free content and don’t really question it.
So where does that leave us?
What If A Content Creator You Love To Follow Doesn’t Want To Make Content For Free Anymore
May I humbly suggest: Perhaps we should say goodbye to this weird era of endlessly free content.
Let’s go back to the beginning of this newsletter and the innocent request I received. I wrote a post about 10 Fabulous French Souvenirs Under $5. It’s a great post. It’s not sponsored, and it’s not full of affiliate links (I think there’s one for ribbon?). I don’t make money from this post. It’s free to read. It was originally written in 2013, updated a few months ago, and still gets shared. Again, it’s great, highly useful content.
The request from the reader was this:
Could you make a similar post about what affordable items Americans should bring to friends living in France?
Again, a very positive, casual, innocent suggestion. And it’s a good idea! But at the moment, I’m not up for doing this work for free. For me, the free content model stopped being sustainable about 4 years ago.
So what are my options if I want to do the work and create this requested post and be compensated? I could try to find a sponsor for this post. Ideally, it would be something like a French tourism board, right? That would be a good fit. But of course, I have no contacts at the French tourism board, and have no idea if they have a budget available. It would take many weeks and a lot of hours I don’t have to find out who the right contact is, and if they have a budget, and if they want to work with me. Is it worth the investment of time? It’s pretty risky.
Or, I could try to fill the post it with affiliate links, but many of the items I feature may not have an affiliate link available. And what if the affiliate links I’m able to find are on Amazon? People love to yell at me about Amazon. (And I get it I promise, I yell about Amazon too — but if I don’t link to Amazon, I also get yelled at, because people really like shopping on Amazon and sometimes people don’t have the budget to shop other more independent sources.)
Or, I could sell readers access directly. Like, you want to see the article about the best French Souvenirs? Sounds great, how about I charge you $1 to read it. But of course, I have no good or simple mechanism to charge anyone $1. They would have to go to PayPal or Venmo, and I would need to have an automated software system that gave them access to the article as soon as they paid, because it’s not feasible for me to track that information manually — especially since people around the world access my content 24 hours a day.
Related, as a reader, who wants to go through the trouble of paying $1 via some online form? If a reader could do it in one button, and never have to open another app, and just keep reading, then maybe it would be worth it.
Experimenting With Direct Reader Payments
As other revenue options are disappearing, the biggest trend I’m seeing is having readers or followers directly fund the work of content creation. If you’ve been following along with me, you know I’ve experimented a little bit with direct reader payments over the last few months.
My first attempt was this Substack newsletter; at the beginning, I considered creating some paid newsletter content and some free newsletter content, but ultimately, I’ve offered it all for free. Those of you who are paying subscribers, ensure that I can keep the newsletter free for others, and keep it sponsor-free for everyone. (Thank you, Paying Subscribers! I appreciate you every day.)
My second attempt is Design Mom Office Hours. Anyone can book time to talk with me about any topic. We’ve discussed things like:
-Getting French Visas
-Creating a Family Identity
-What to do with an Awkward Room in a house
-How to Remake a Bedroom after a Divorce
-Launching Online Classes
-Staying & Leaving Mormonism
-My Opinions on Toddler beds
-Communicating with House Contractors
-The Community College path
And so much more!
I’ve enjoyed these meetings tremendously, and I’ll keep doing them for the foreseeable future. But I have also confirmed this idea isn’t scalable, and isn’t sustainable in the long term.
Maybe We Should Get Used To Paying For Content
If we wouldn’t expect a musician to write a song for us for free, or a photographer to take photos for free, or a graphic designer to design a poster for free… then maybe we should stop expecting really good content on Instagram, or blogs, or newsletters, or Twitter, to be free. Maybe we should get used to paying Content Creators.
If we have a favorite Instagrammer, and we watch their Stories regularly, in the same way we’d watch a Netflix show, perhaps we should pay them. If we have a favorite person on Twitter, and we love everything they write — share it, talk about it, etc. — perhaps we should pay them.
OR, maybe Twitter should pay them. Maybe Instagram should pay them.
An Argument For Platforms To Pay Content Creators
One of the key ways Instagram makes money is from selling ads. If you get on Instagram and start watching Stories or posts, you’ll see ads mixed in. And the ads can be very effective — massive amounts of products get sold via Instagram ads. But the only reason people see those ads, is because Content Creators are making really good content on Instagram, and people come to see that really good content. When they seek out that really good content, they see the ads too. Same thing on TikTok, Facebook, Twitter, etc..
This isn’t much different than an old school printed magazine, right? I buy the magazine, or pay to subscribe and receive it monthly. And then I open it to read articles/content, and the ads are mixed in there with the articles/content.
The difference is: The magazine pays the content creators. They pay the writers, and the photographers and the stylists, and the make up artists, and the graphic designers who layout the pages, etc. Every one who works on the magazine gets paid.
If Instagram is like a magazine, should Instagram be paying the content creators? I know it’s a bit different, because millions of people who aren’t officially content creators still post on Instagram, specifically for their friends and family. But it seems clear that Instagram can easily tell which accounts are drawing people to them. Instagram can certainly see how many ads they are running around the content of specific accounts. Instagram could definitely come up with a compensation amount that would be reflective of who is actually driving views. (Perhaps it would all be Hollywood celebrities? Probably.)
In case you’re feeling angry at me about this topic, let me make clear: I’m no different than other content consumers, I eat up free content too. I admit, I don’t take in much content on Instagram (I create on Instagram, but I typically don’t consume on Instagram). But I subscribe to several newsletters, some of which I don’t pay for. And I consume TONS of free content on Twitter. Honestly, I would feel much better if I paid a fee to use Twitter, and if I knew the best Tweeters were being compensated.
Related, if I did a search, and an article I wanted to read came up on an individual’s blog or website, I would LOVE if they had a paywall, and a $1 payment button, and I could pay them to read that article (or pay more $ if it’s worth more!). But I also know I wouldn’t be willing to interrupt my flow to put in credit card info for $1. So maybe that’s a big issue: how to integrate very small payments so it’s seamless and not interruptive.
I’ve talked about some of these concepts before, and the response was interesting. At one point, I mentioned I stopped doing sponsored posts for last 2.5 years. Some people said they didn’t notice. Others said they don’t mind sponsored posts “as long as they are authentic.” That makes me roll my eyes a little bit. What is an authentic sponsored post at this point? Even when I did extremely authentic posts that were a perfect fit, I still had people yelling at me.
Ultimately, there’s something uncomfortable to us about seeing the women we follow online making money. And I get that it’s weird. If you use Instagram for fun, and post photos of your last vacation, and don’t expect to be paid, then why should the Content Creator you follow expect to be paid for creating on Instagram?
It was easier when it was a magazine, and we didn’t really know who was doing the writing and creating. They didn’t feel like a friend, like a neighbor. But the women we follow online…. well, it’s different. They respond to us! They like our comments! We know everything about them! We know their kids names and we know what their house looks like! We see their posts mixed in with posts from our sisters and friends from high-school. And in our heads, the content creators are just another person on our list of friends — even though we don’t actually know them in real life. It feels much closer than the magazine situation.
How Should It Work?
What do you think should happen? If the traditional ways of making money around free content don’t work anymore, then what should we expect from Content Creators? How do you feel about paying Content Creators directly? If there was such a thing as paid Instagram Stories, where a Creator could share some stories for free, but put other stories behind a paywall (something like: Today I’m revealing our new wood floors in a 40-segment Story, it’s $5 to watch, click here to pay…), do you think you would pay? Or would you skip to the next free content?
And how do you feel about paid Substacks or Patreons? I’m not sure how sustainable these formats are. If you consistently read 15 different writers, and they each charge $5 per month, are you willing to add a $75 line item to your budget each month for newsletters? Perhaps you could support 5 newsletters but not 15? What are your thoughts on all of this?
That’s all for now. Feel free to comment on anything I mentioned above, or whatever’s on your mind. I hope you have a fantastic weekend.