Instagram Monetization: A Step-by-Step Guide to Earning Money on the Platform

With over 1 billion active users, Instagram is one of the hottest social media platforms out there, offering a unique opportunity for businesses, influencers, and individuals to grow their online presence and monetize their content.

But let's be real, the thought of monetizing your Instagram can feel a bit overwhelming. 

That’s because it requires a significant investment of time and effort —  and more than just a creative username, or an attractive profile description, and posting pictures with captions. 

From creating a strategy to choosing the monetization types and then creating content, further building and engaging with your audience, and analyzing your performance — it involves a lot of work. And it’s easy to get stuck and not know how to move ahead.

That's why we're here to help!

From understanding your audience, to building a strong following and exploring different monetization methods, to best practices for maximizing your earnings - we've got you covered.

What is Instagram Monetization?

Similar to monetizing your TikTok, Instagram monetization refers to the process of earning income from your Instagram account. You can achieve this through various methods such as, sponsored posts, affiliate marketing, product sales, and advertising among others.

In short, the end goal of Instagram monetization is to turn your online presence and content into a profitable business by utilizing your followers and reach of the platform

How to Monetize your Instagram Account?

If you're looking to monetize your Instagram account, there are several approaches you can take. 

• The first is to partner with brands on your own, which involves finding companies that align with your content and negotiating deals directly with them.
• Another option is to utilize Instagram's built-in monetization tools, which include features such as Instagram Shop and ads.
• And of course, you can combine these two methods depending on the opportunities for maximum monetization potential.

Regardless of which route you choose, here are seven tools and tactics you can use to make money from Instagram:

1. Influencer Marketing

Influencer marketing is a widely known online marketing method where businesses partner with influential individuals, such as social media celebrities or content creators, to promote their products or services to their followers.

The idea behind influencer marketing is that these individuals have built up a loyal and engaged following who trust their opinions and recommendations, and therefore are more likely to purchase products or services that they endorse.

In return for promoting the brand, the influencer is typically compensated with money, products, or other perks.

Here’s an example of an Instagram influencer marketing campaign in action. The hashtags clearly indicate it’s an influencer post.

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Influencers might also offer special discount codes to help the brand track conversion through their promotional posts:

There are three ways how influencers find brands to work with:

• Influencer approaches the brand. If you’re good at cold outreach and know how to write an email that strikes a deal, try reaching out to your favorite brands to collab.

Some marketers may argue it has a low success rate but we have a different take.
If you create awesome content with a high level of engagement, your niche matches with the brand, your tone resonates with them, you offer a unique standpoint, and have past results that prove your point, send out that cold email with your portfolio.

It's important to avoid a dismissive tone when reaching out to brands.

We receive emails from influencers who say things like, “I get a lot of emails and collaborations on a daily basis and am overloaded with stuff so I can't promise anything but want to collaborate with you.” 🙄😐

Remember, you are the one initiating contact and it's crucial to show genuine interest and enthusiasm. 

If you aren't passionate about the collaboration, why should they care? Keep in mind that a positive and professional approach can go a long way in building lasting partnerships with brands.

• Influencer is approached by brands or agencies. Looking at it from the influencer's point of view, being contacted by a brand and an influencer agency is a more preferable scenario. That’s because it shows that the brand is interested in collaborating with them.

Before signing a contract, make sure to discuss terms, number of retakes/shoots, ideal location, terms and conditions.

• Use influencer marketing tools and platforms. By joining platforms and using tools you can get the best of both worlds - easily discover brands that you are interested in partnering with, while simultaneously making it simpler for brands to find and connect with you for potential collaborations.

How Many Followers are Needed to Become an Influencer?

There is no specific number of followers required to become an influencer. However, you need a sizeable audience who are engaged with your content and are interested in the niche topics you cover.

Informally speaking, there are four influencer categories by follower count:

Nano-influencers: individuals with a follower count between 1,000 and 5,000 who are growing experts in their fields.

Micro-influencers: micro-influencers have a social media following between 1,000 and 40,000 followers.

Macro-influencers: those with a follower count anywhere between 40,000 and 1 million.

Mega influencers: creators, celebrities with a vast number of fans, followers, and subscribers on social media, typically more than 1 million.

Based on their niche, budget, and other factors, brands decide which type of influencer they wish to collaborate with.

Note that follower count isn't the only factor in becoming an influencer or securing brand deals.

The quality of your content, the level of engagement with your audience, and your ability to influence their sentiment and consumer decisions are also essential.

That's why brands these days are more likely to partner with nano- and micro- infleunecrs because they tend to drive more engagement on a personal level. According to an Influencer Marketing Hub survey nano-influencers on Instagram have higher engagement rates (1.70% to 4.84%) compared to those with 100,000 to 1 million followers (1.06%).

To know more about what drives influencer collaboration, give our guide to influencer marketing a read.

2. Affiliate Marketing

An affiliate is different from an influencer because their primary goal is to sell a partner brand's products—not just promoting them. And get paid a commission for every sale they make using a special link (affiliate link) or code.

Now since clickable links cannot be added anywhere other than Instagram bio, and you can add ony up to 5 links, marketers tend to use link in bio tools to drive traffic to a landing page where they showcase multiple products and pages.

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Another way is promoting products in posts and sharing your affiliate code in it. Note that the marketer used the product and wrote a detailed description about it which further strenghtens trust among buyers and proves that this is not a mere promotion - she truly believes in what she's promoting.

Meta ended Instagram’s native affiliate program on August 31, 2022, meaning you can no longer participate in it.

But you can collaborate with brands and promote affiliate products independently.

Here are the key steps to start your affiliate marketing journey:

• Find a niche that you're passionate about and has high demand but low to moderate competition.
• Research companies and affiliate programs that match your niche and meet your criteria, such as commission structure, minimum payout, cookie period, and support.
• Apply to the affiliate programs directly through the companies' websites or join affiliate marketplaces and networks to find relevant programs in one place.

3. Set Up Instagram Shopping

Beyond collaborating with other brands, there's a plethora of money-making opportunities on Instagram - like setting up Instagram Shopping and selling your own products.

According to reports, 15% of US shoppers start their online shopping searches on Instagram which further boosts confidence among small businesses and creators like you.

And the best part there is no minimum follower count to activate Instagram Shopping.

We’ll walk you through the steps to set up your own shop on Instagram.

Step #1 Switch to Business Account

To set up a shop on Instagram, you need to create a business account by selecting "Switch to Professional Account" in your profile settings and following the prompts described in this help article.

Step #2 Connect Your Shop to Facebook (Optional)

Now create and connect your Facebook Page with your Instagram. However, there is no need for a Facebook business page if you only sell through an Instagram shop in Commerce Manager.

Step #3 Go to Commerce Manager

Commerce Manager is a platform for managing your catalog and sales on Facebook and Instagram. Anyone can use it to create and manage a catalog of items to promote on these platforms.

Now import and sync your products if you’re already selling on any of the partner platforms. Or, add products manually. 

Next, set up checkout and choose a catalog to finish setting up.

After this you need to manage catalog, create a collection and customize your shop. Now since setting up and managing an Instagram shop is a whole topic in itself, we’ll keep it for another day, another blog. 

Step #4 Start Selling on Instagram

Now it’s time to start selling.

Use product tags to make it easy for your followers to learn more about products and buy from your shop. 

You can highlight up to five items from your catalog in your Feed, Stories, and Reels.

Note, starting March 16, 2023, product tags won't work for live broadcasts.

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You may also consider placing ads featuring products to reach a wider audience.

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Thus, you are successfully monetizing your Instagram by turning your account into a tool to get more buyers!

4. Sell Your Own Products/Services without a Shop

Not all types of small businesses need an Instagram shop.

Neither are shops available in every region and country. 🤷🏻♀️

But creators with their unique talents and creativity, have the potential to come up with new ways to promote and monetize their products/services.

Here’s what you can do to make money through Instagram:

• Promote your products/shop organically and ask your audience to drop by. You can even share special discount coupons or promotional news to drive sales.

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• Edit your Instagram profile and add a link to your website or link in the bio landing page. 

Now create irresistibly creative posts that captivate your followers and showcase products to them.

Interested audiences will buy from you through your profile link. 

You could also proactively ask them to visit the link in your profile to place an order. 

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• We love to see how Christine Aprile, who goes by the username @christineaprilemua on Instagram, effectively and efficiently gets her message across and promotes her online classes.

The message clearly conveys three key information:

What - Live makeup classes.

For whom - Beginner to advanced level learners

How to book - Link in bio.

Plus, she offered a $50 gift card to attract more eyeballs.

And… she showcased her skills, thus, gained the confidence of the audience, by posting a before and after makeup photo.

Pro Tip: Pair this tactic with Badges or Subscriptions and organize live training on Instagram to earn more. Keep reading to learn how.

 5. Badges

Instagram badges allow you to receive support from viewers and monetize your content when you go live on Instagram.

When a viewer buys a badge, you’ll notice a heart icon next to the username. One user can buy multiple badges during live. 

You’ll need a professional (business or creator) to enable badges.

Turn on badges in a few taps:

• Go to "Profile" and tap "Professional dashboard". 
• If you’re eligible, click "Set Up Badges". 
• If you’re not eligible, apply in-app by tapping "Apply for monetisation" and check your dashboard for updates. 
• Once enabled, badges will automatically be added to your live videos.
• Now when you go live, tap “Badges” to enable them.

Are You Eligible?

US creators with 10k+ followers and compliant with Instagram’s policies and guidelines can access Live badges if they’re eligible which they can check in their professional dashboard.

Creators in the UK, France, Spain, Italy, Germany, Japan, Australia, Turkey, Brazil, and Mexico have access to badges through invitation only. To check invitation status, go to Settings > Creator > Badges.

6. Live with Subscriber Only

Quite like TikTok’s LIVE Subscription, Instagram subscription allows creators to charge a monthly fee for access to live streams and monetize their content by offering exclusive access to their most loyal fans.

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Followers who subscribed to your content will get a purple badge which appears next to their username in feed comments and DMs.

You can set the pricing and create different types of subscriber-only content, like exclusive lives, stories, posts, reels, and a subscriber homepage!

Are You Eligible?

To be eligible for Instagram subscriptions, you must be at least 18 years old, based in the US, have 10K followers, and meet Instagram’s Partner Monetisation Policies and Content Monetisation Policies. 

For users in Canada, Australia, and the UK, subscriptions are currently by invitation only.

How to set up Subscription?

If you’re eligible to create subscriptions or have received an invitation, you can enable subscription service from "Professional Dashboard".

7. Earn with Branded Content

Creating branded content works much like influencer marketing and affiliate marketing we discussed in the beginning, but through Instagram's Creator Marketplace - a place where brands and creators collaborate.

To help brands find you faster, choose the right keywords that describe your interest, keywords like “sports” or “beauty”.

Brands searching for an ideal creator will then be able to discover your profile and also see your content, check the insights, and message you about opportunities.

After discussion, if both parties agree to proceed, the brand will then offer you a “project”.

If you’ve been awarded a project, make sure to always disclose your branded content with the paid partnership label.

The moment we saw this on Instagram, we knew we had to share this example from Chaz Smith (@chazsmith)!

He mixes creativty, fun, and humor into creating content for partner brands that generates engagement, entertains his audience, and successfuly promotes the business.

And if you look closely, he tends to partner with companies matching his interest - gaming. That gives him more room to come up with authentic ideas!

Are you Eligible?

To be eligible for paid partnership you need to:

• Have a professional account.
• Join Instagram’s Creator Marketplace.
• Comply with Instagram Partner Monetisation Policies, Community Guidelines and Content Monetisation Policies.

8. Instagram Gifts

Instagram Gifts is a relatively new featureavailable to select creators in select locations. Supporters who watch your Reels can express their gratitude by sending virtual gifts and you can earn from it.

Here’s how it works:

To send you a gift, viewers can buy stars, and Instagram will give you a share of the revenue for each star you receive. You'll earn approximately $0.01 USD per star received from your fans, and you'll get paid on a monthly basis.

Your total and monthly earnings can be seen in your Professional Dashboard, and you'll receive payment when your balance reaches $25.

Instagram rolled out new Reels updates on April 14, 2023 adding a new feature to show you which fans have sent you a gift.

If you tap the heart icon next to their profile names, they’ll get a notification that you’ve seen and recognized their gift.

Adam Mosseri also announced the expansion of Reels Gifts in new markets adding that it will be available to creators in Australia, Canada, France, Mexico, New Zealand, and the UK in upcoming weeks.

Best Practices for Instagram Monetization 

1. Build a strong and engaged audience: 

The key to successful monetization on Instagram is to have a large and engaged following. You can achieve this by regularly posting high-quality content that resonates with your target audience, interacting with your followers, and using relevant hashtags.

If daily posting seems like a monumental task, use AI tools to create content for social media more efficiently.

2. Diversify your revenue streams

Don't rely on just one monetization strategy. Explore different revenue streams like sponsorships, affiliate marketing, selling digital products, and more.

3. Be authentic and transparent

Authenticity and transparency are crucial when it comes to monetizing on Instagram. Be honest about your sponsored posts, disclose any affiliations, and always prioritize your audience's trust and loyalty.

4. Stay up-to-date with the latest trends and features

Instagram is constantly evolving, so it's important to stay up-to-date with the latest trends and features. Experiment with new features and keep an eye on what's working for other creators in your niche.

5. Comply with Instagram’s Monetization Policies

Instagram has certain rules that content creators and publishers need to honor in order to monetize their content. Violating policies and rules and going against Community Guidelines can prohibit reach on the platform and even affect relationships with brands.

The following content formats are not allowed for monetization on Instagram:

• Static videos, which are videos with little to no motion and only one static image.
• Static image polls, which are posts created solely to increase engagement by asking people to react to questions posed by the content.
• Slideshows of images, which are primarily composed of static images played in succession.
• Looping videos, which are videos that repeatedly display the same segment multiple times. This includes looping content of varying lengths and GIFs.
• Text montages, which are content that primarily displays still or moving images with overlaid text.
• Embedded ads, which are content that already includes embedded ads where Instagram offers ad placements.

The following prohibited behaviors and formats are also not allowed for monetization:

• Content that encourages engagement through likes or comments or incentivizes people to click a link. 
• Soliciting engagement by requesting compensation for extreme behavior.
• Content containing misinformation, misleading, unverified claims.
• Unoriginal content.

Additionally, some categories may face reduced or restricted monetization. You can find more information about Instagram content monetization policies here.