Instagram giveaways are more valuable for them then they will ever be for you

I’ve noticed a new trend on Instagram in which, instead of doing giveaways with a singular influncer, brands are now doing giveaways with a handful of influencers all together. I can only assume this was the brain child of a manager at a common management agency they all share. Nevertheless, this idea, from the business perspective, is actually genius.

Influencers who do solely internet based influencing for their career have managers. Instead of reaching out to a brand and asking if they can have free shit, their manager will do that. Their manager will email a marketing representative at said brand and say ‘Hey, I’ve got [Influencer Name] with [X] followers. They’ll shout you out to said followers if you give them free stuff. They’ll provided target, specific content for your brand if you give them something to give away’.

Let’s use Peloton, for an example. (Using Peloton because I’ve seen several groups of influencers giving away a peloton lately)

Here’s some basic Marketing related math for you.

  • Peloton sponsors an influencer that we’ll call Jill. They give her one bike for herself and one bike to give away to one of her 500,000 followers. Jill tells her 500,000 followers to follow Peloton in order to be entered to win.
  • Jill has a potential to reach 12-18 percent of those followers on an average post, but typically with giveaways you can reach 25 to 30 percent. If we guestimate that she reaches the smallest percentage of followers with her post, 12 percent of 500,000 is 60,000 followers.
  • If we factor in that of those 60,000 followers reached, about 10 percent of them will actively follow Peloton, which is 6,000 new followers for Peloton. 6,000 new followers for the price of two bikes means that these bikes have already paid for themselves.
  • Now, if we factor in that of those 6,000 new followers got, roughly 2% of them are actually inclined to just go buy the Peloton themselves and have the spare change to do so, there’s roughly 120 people who could potential purchase the bike outright after seeing the giveaway.
  • Considering they have already made their money back with the followers earned, even if only one of those 120 people purchase a Peloton after seeing Jill’s sponsored post, that’s pocket change for Peloton. That’s profit. Measurable profit. Imagine if ten people bought them? 20?

When I say that Jill’s post has the potential to reach 12-18 percent of followers and that 10 percent of them will actively act on seeing the post to follow Peloton, these numbers aren’t pulled from thin air. They’re basic guestimates used in the industry for ROI calculations.

Where the management company comes in is that they’ve realized a way to increase the value to the brand and the influencer, whilst minimizing the work for everyone. How do they do that? Instead of one influencer giving away one bike, five influencers are now giving away one bike. Not each, total. This means Peloton is giving away one bike, and instead of having access to just Jill’s followers, they now have access to Jill’s followers, Jen’s followers, Sarah’s followers and so on and so forth.

Instead of Jill propping up Peloton, Jill is now propping up Peloton and each her four friends. Jills four friends are also doing the same thing for her.

If Jill, Jen, Sarah and the rest of them all have half a million followers, for example, Peloton has multiplied the math of their original outcomes five-fold. In the process, each of these influencers are also seeing their own follower count growing, for the Peloton sponsored content that’s 1/5th as valuable as it was before.

As an Instagram user, your chance of winning has gone from 1 in 500,000 to 1 in 2.5 million. As an Instagram user, you’ve gone from having to follow one extra user, to having to follow 5 extra users. As an Instagram user, you’re doing the work for them. They’re posting a 15 second story to Instagram and offering you 1/5th the chance you had before. In the process, they’re improving their stats for future advertisers. What are you doing? Filling your Instagram feed with annoying influencers in hopes of being the 1 in 2.5 million people who wins a $2,000 bike?

Peloton has millions of dollars to set aside each year for giveaways. Millions. Paying $2,500 (or however much it costs for the bike with shoes and whatnot) to give away one bike, that gives their brand the potential to reach 2.5 million people is PENNIES. Literal pennies.

Long story short: Influencers get the followers. The brand gets followers and sales. Instagram users get… to follow five extra, potentially annoying accounts, for 1/5th the chance at a prize they would’ve had in previous years.

If you’re someone who doesn’t care who you follow on Instagram, please don’t @ me. I’m not saying that having to follow five people is arduous work. I’m merely suggesting that a management company has created a model in which brands and influencers invest absolutely nothing in people and people invest everything in brands and influencers. That’s what drives the influencer industry – they influencers and brands do as little work as possible and users pay for it with their social media currency, their time, their attention and their dollars.