Everything parents should know about social media monetization

Remember the days when kids wanted to be astronauts, firefighters, or doctors? Ask them now, and you might be surprised to hear "YouTube star" or "TikTok influencer" at the top of their list. 

Welcome to the era of social media monetization, where dreams of fame and fortune can start with a smartphone and a good idea. 

As an industry, monetizing social media is not to be underestimated. Investment brokerage Goldman Sachs predicts the influencer and creator economy could be worth upwards of half a trillion dollars by 2027. If your kids have mentioned they want to try to get something to go viral, show them some support. After all, creating content can be a stepping stone to how they earn, save, and learn.

Read on to learn about how you can guide your kids through the exciting yet complex world of earning money online.

The lowdown: How does social media monetization work?

Guess what? You don't need to be a Hollywood star to earn from social media. It's all about finding your community. Whether you share life hacks, whip up makeup tutorials, or spread joy with memes, it's the followers that count. Some people command a huge social media audience just posting “get ready with me” videos. More eyeballs on your social media accounts? More opportunities to cash in. 

Creating that buzzworthy social media content is key. It takes consistent, high-quality content — posts, videos, stories — to attract, engage, and retain followers. Consistency, quality, and a dash of charisma can turn those views into a steady stream of income through a variety of ways to make money on social media:

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• Sponsored posts: Teaming up with brands to showcase their goods is the cornerstone of influencer marketing. In this arrangement, influencers agree to create content that highlights a product or service, receiving either a flat fee or a negotiated rate based on the post's reach and engagement.

• Affiliate marketing: Earn a cut from products sold through your links. Tons of retailers and brands allow influencers to set up an account that tracks how many sales you bring in for them. Then, the influencer pockets a percentage.

• Sell exclusive goodies: From digital guides to custom merch, offering your target audience something that they can't find anywhere else is a great way to monetize your influence. You set up an online store or landing page, market your products to your followers, and handle the sales and shipping process.

• Memberships: Provide exclusive content for those who subscribe. A lot of influencers offer exclusive content, discounts, or experiences that are not available to their general audience. Some people use a program like Patreon to receive donations from followers who want to support the channel.

• Platform perks: Some platforms have built-in monetization tools like YouTube's ad revenue share. This allows creators to earn money directly from the platform through ads displayed on their content, with earnings based on factors like view count and ad engagement.

How much social media influencers actually make is a wide spectrum — some might just snag enough for a weekly treat, while others plan to pay cash for their next mansion. And, hey, while they're at it, why not a new house for the dear parents who supported them along the way? 😉

Key platforms and their top monetization methods

Each platform serves up its own recipe for revenue. Generally, any platform can be useful for affiliate marketing or to sell your own products or services. Some social networks pay content creators directly. 

For example, if your teen becomes an affiliate with Amazon, they might create a social media post about top back-to-school items. To maximize engagement, they might plaster it across all their socials including Facebook. Any time someone goes to Amazon through that post and buys something, your teen gets money in their pocket. 

Your teen could be the next big thing on one of these social platforms:

• Instagram: A visual feast perfect for brand collabs and affiliate links. Pro tip: A Finsta might keep those close friendships intact away from the public eye.

• YouTube: Share in ad revenue, enjoy fan donations, and join the Partner Program for a slice of the pie – there are lots of great ways to make money with YouTube!

• TikTok: The short-form champ offers a Creator Fund, brand deals, and live gift donations.

• X (formerly Twitter): Ideal for snappy insights and cross-promoting content with potential for earning from audience subscriptions and high viewership rates.

Diversify across social media platforms to maximize visibility and income potential. Imagine being able to craft a makeup tutorial that not only racks up views but also directs fans to buy through the affiliate program, to boost your brand's visibility across social media.

Even cooler is that successful channels are an asset in their own right. So, not only could your creator earn beauty product commissions, get paid promotions, launch their own product, and make money off the number of views, but they could also teach people how to start, build, and run a successful online business.  

The impact of social media monetization on teens

This digital gold rush offers fantastic perks but isn't without its pitfalls. Content monetization introduces concepts of personal branding and financial independence early on but comes with the pressure of maintaining an online persona and navigating the complexities of online income.

Benefits

• Financial freedom: Extra income can help teens save or cover expenses.

• Business basics: Teens learn business skills like marketing, communication, and entrepreneurship.

• Creative outlet: Content creation is a platform for self-expression and creative talent.

Risks

• Pressure cooker: The chase for likes and viral hits can be exhausting. They're up against anyone with a phone that tries to make a buck. If your teen works hard and doesn't see a lot of results, they might burn out.

• Scam likely: Fake offers promising quick cash or shortcuts to success litter the social media sphere.

• Cyberbullying: Increased visibility can have negative consequences. Many platforms have options to turn off comments or direct messages.

How to navigate social media monetization as a parent

Gone are the days of traditional teen jobs being the only option. To make money online is more of an adventure, but it's also totally viable. Monetized content can be a great way for your teen to earn passive income as well. Take a little time to learn about social media platforms from a business perspective, especially Instagram because many teens already post on there. 

Have a conversation with your teen to discuss their digital footprint. The internet has a long memory. Plan on anything they do, from commenting on someone's post to creating content, sticking around basically forever. Should their stardom dreams fall back to Earth, how might a future employer react to the content? 

Remind them that with their online brand, they're creating a persona. You can even encourage them to make a guide for themselves based on how they want their audience to perceive them. Then, they can check their activity against it to make sure they're staying in line with their vision.

Help your kids address the immediate and long-term risks, and they can build a social platform that’s safe and secure. Here are some other ways you can support your digital entrepreneur:

• Open dialogue: Chat about their digital dreams and the realities of online fame.

• Set boundaries: Discuss healthy social media habits and balance with offline life.  

• Financial wisdom: If your teen makes money from social media posts, help them budget, understand taxes, and save.

But, at the top of the to-do list? Making sure their online world is as safe as their bedroom. Chat about keeping personal info just that — personal. 

Remind them that the internet doesn’t need to know their home address or where they hang out on weekends. Sharing their every move online? A big no-no. Geotagging that cool café might seem harmless, but it’s like leaving breadcrumbs straight to their location.

Then, there’s the not-so-fun part: dealing with internet trolls and the occasional oddball sliding into their DMs. Equip your teen with the savvy to sidestep negativity, emphasizing the power of the block and report buttons. 

Each platform provides a number of privacy features. Go over them one by one with your kids so you can help them decide on the appropriate settings. After all, monetizing social media is a business that, like any other, requires owners to establish protective measures upfront. You could even have your teen "hire" you as a volunteer security consultant so you can keep tabs after the initial setup. 

Embrace the new digital era with confidence

Whether it's a side hustle for extra pocket money or a chance at internet fame, social media monetization is a growing trend among teens and young adults. And it's easy to see why. They tend to have fewer responsibilities and more free time that could be used to create content. Between school and social activities, they also know a lot of people who might engage with their channels. 

As a parent, it's important to understand how teens can turn their online presence into a potential revenue stream. Help your teen set realistic expectations and understand the work involved. At Greenlight, we're here to help you help your family. Our debit card can help kids manage earnings responsibly. Empower your teen with financial freedom, along with the smarts to build a brighter future.

Disclaimer: Greenlight is a financial technology company, not a bank. The Greenlight app facilitates banking services through Community Federal Savings Bank (CFSB), Member FDIC.