Instagram's COO breaks down its newly expanded tipping feature called 'Badges,' which one creator said earned her $1,000 in a week directly from fans
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Instagram is ramping up its test of a feature that lets people tip influencers during livestreams on the app, which it thinks will be especially popular among creators without huge followings. The tipping feature is centered on Badges, which can be bought during a livestream. It allows influencers to earn money on Instagram without advertising brands or products. Instead, they are paid by their followers directly for their content. "We think Badges is a particularly good product for emerging creators," Instagram Chief Operating Officer Justin Osofsky told Business Insider. He defined emerging creators as influencers with a few thousand or tens of thousands of followers on the app. Influencers of this size are often referred to as "nano" or "micro" influencers. Instagram announced on October 20 that it would roll out Badges for more than 50,000 creators as part of the app's beta-testing phase, following initial testing with a small group of creators that started in May. "You can have followers, then you can have supporters, then you have freaking superfans," said Young Ezee, a comedian and content creator on Instagram and YouTube with over 1 million followers. "I feel like what Instagram is doing is creating superfans." Young Ezee has been using the feature for about a month now, and her livestreams usually bring in 3,000 to 6,000 viewers, she said. Ronne Brown, an Instagram creator with over 200,000 followers, was given access to the feature a few weeks ago. She creates lifestyle content and coaches women through Girl CEO, a platform she created for female entrepreneurs. So far, she's gone live with Badges on Instagram about seven times and shares business tips and a bit of her personal life. "Ones where I was natural, kind of off guard, and it was like a behind the scenes of my life and my kids are running around, and I'm trying to give value at the same time — they were, like, a $200 live," Brown told Business Insider. In her first week of using the feature, she earned over $1,000, which was verified through documentation seen by Business Insider. The rollout of tipping to Instagram follows a surge in its Live feature during the pandemic. For instance, from February to March, the company saw a 70% increase in views on Instagram Live. The tipping feature is also similar to other livestream offerings on apps like Twitch and TikTok. Badges can be bought at three price points ($1, $2, or $5), and Instagram is not taking a cut of the money made through tips. "We're giving 100% of the money to creators," Osofsky said. "Over time as we scale the products, we do anticipate coming up with the right business model, but a lot of this will be influenced by what we learned in the test." Apple or Google, however, take a 30% cut of the transactions (depending on whether the user is on iOS or Android). Instagram will also start "matching" the tips, effectively doubling their pay rate, in November for an indefinite time period up to $5,000. Different ways for influencers to make money at different career stages Introducing Badges is part of Instagram's plan to bolster its arsenal of ways influencers can earn money. "We're trying to build an overall product suite to give creators ways to make money at different stages in their careers," Osofsky said. "As creators become more established, some of the more mature monetization products come into play, and that's more branded content," Osofsky said. Instagram has a tool that allows brands to activate a creator's post with the "paid sponsorship" label, which also provides brands with metrics and access to that post's performance. But for creators who are emerging and have not yet landed brand sponsorships, Badges are a way to make money without brands, Osofsky said. Instagram also announced it was expanding access to IGTV's, Instagram's YouTube-like video format, ad revenue share feature, similar to YouTube's Partner Program, which allows creators to earn money through 15-second ads placed on their IGTV videos. Creators will earn a 55% commission, "the industry standard," Osofsky said. "As you grow into a broader audience, the rev share on IGTV ads can be quite meaningful," Osofsky said. Like on YouTube, growing an audience and keeping that audience engaged on a video is an important factor that affects how much money can be earned through ad revenue.
To learn more about how influencers are monetizing Instagram, YouTube, and TikTok, read these Business Insider articles:
Influencers explain the 9 best ways to make money on Instagram, YouTube, and TikTok — and how much they earn Instagram's top exec broke down the 6 ways influencers make money that the company is focused on moving forward 5 Instagram 'micro' influencers explain how much money they charge brands for sponsorships Join the conversation about this story » NOW WATCH: Here's what it's like to travel during the coronavirus outbreak
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