Monetize Your Content: 7 Different Types of Compensation for Creators

The creator economy has pulled off some serious growth acrobatics, more than doubling since 2019 and currently flaunting a mind-blowing $21.1 billion market size. Behind this meteoric rise are influencers, or creators, who dazzle brands, mesmerize audiences, and confuddle skeptics across the globe.

Going beyond traditional compensation

For creators, flat fee payments mean peace of mind: they’re guaranteed to get paid for the hard work they’ve put into crafting sponsored content.

While flat fee payments remain creators’ favorite way of being compensated, many creators are now opting for hybrid compensation models that offer a mix of flat fee payments and the potential for a little something extra for driving defined results, particularly when collaborating with newer brands.

Different types of compensation

Monetary payments

These can be made either as a single flat fee or as a component of a larger contractual agreement that includes other compensation (like the ones below.) Pretty straightforward.

Free products or services

Think skincare product test-outs and free Spotify subscriptions for 3 years. These are super common in creator-brand partnerships and the go-to fallback compensation creators negotiate for with brands who can’t afford to meet their creators’ requested flat fee amount.

For instance, a creator is asking for a $1,000 bulk payment, but the brand has a flat fee budget of only $500, so the parties compromise with that $500 fee plus a few free products. Some creators are happy to accept only free products and services as compensation (depending on the brand and provided that those products and services are truly free — not just discounted.)

Affiliate programs

Here, creators are offered personalized referral purchase links or discount codes for creators to share with their audience. Let’s say you post a referral link to a product in your TikTok bio; your viewer clicks that link to check out the product, and if they purchase it then and there, you get compensated!

Exclusive brand deals or collaborations

These can include limited-edition product launches, co-branded campaigns, or sponsored events. You might have encountered a lot of Adidas-sponsored posts on social media; the brand is particularly fond of creators for its affiliate program.

Note that brands typically reserve this model for macro influencers (about 500,000 to a million followers) and mega influencers (over a million followers) rather than those with a significantly smaller audience.

Sponsored travel or experiences

...such as events, travel to specific destinations, or participation in unique experiences related to the brand's niche. Those dreamy, editorial-esque photoshoots in 6-star Bali resorts? Many of those trips are at least partially brand-sponsored, and may potentially be traded for a once-off payment if ticket or travel costs are sufficiently covered. Like exclusive brand deals, though, they’re also usually reserved for creators with hefty followings.

Cross-promotion

This is when brands showcase creators on their official social media channels, website, or other marketing materials, which can boost the creator's exposure and visibility. Now, one should never accept this as one’s sole compensation, because doing so means unpaid work. It’s up for grabs as a bonus compensation, though!

Licensing or endorsement deals

These share a couple of things in common with cross-promotion, namely a) they can generate extra visibility for the creator, and b) they’re usually found only in the realm of macro influencers, mega influencers, and even celebrities.

With licensing deals, brands use a creator’s name, likeness, or other intellectual property to promote the brand’s service or product. The offering belongs to the brand, but the creator is the “face” of it. Think of Nike’s Air Jordan sneaker line, which carries Michael Jordan’s namesake and was born from arguably one of the most successful brand-celebrity partnerships of all time.

Meanwhile, in endorsement deals, the creator publicly recommends the brand’s offering. For example, the creator posts a TikTok about a brand’s ingenious new cooking utensil, and the brand reposts the TikTok on its own profile.

Tips for negotiation

Most brands are already aware of creators’ general payout preferences, and those that aren’t aware are often flexible enough to consider a creator’s compensation counteroffer — provided that it’s worthwhile for everyone.

But don’t dive headfirst into a negotiation without first considering these factors:

• Your audience: What kind of engagement do you typically get on your content? More importantly, how likely are your followers to take the desired action (e.g., make a purchase or sign up for a newsletter)?
• The brand's goals: You and the brand should be on the same page about the brand’s specific goals for the sponsored content campaign. Are they looking to increase sales, leads, or website traffic? Depending on your audience and the content you create, one type of performance-based compensation may be 10 times more mutually beneficial than another.
• Market rates: Underselling yourself can backfire just as much as overselling yourself. How much are other content creators charging for performance-based compensation? Keep your proposal realistic for the brand and fair to yourself.
• Your value to the brand: What unique value do you offer the brand? Got a large and engaged audience? Maybe you’re a thought leader in your niche? Don’t shy away from leveraging your shine!

Once you’ve reached an agreement, protect yourself and the brand by getting it in writing, just in case a dispute arises down the line.

Also, while the brand takes care of monitoring performance and tracking links, it never hurts to check out the performance of your sponsored content yourself. This is quite useful for figuring out what's working in your content and what's not, and it’ll help you negotiate better deals with brands in the future (or even inspire a long-term relationship with the currently partnered brand.)

An example of creator compensation in action

Imagine you’re a rising creator in the tech category, renowned for your trustworthy, in-depth gadget reviews and insights. A prominent tech company has taken notice of your influence and, looking to drive sales for a soon-to-launch product, wants to collaborate on a campaign.

The brand’s opening offer is a competitive flat fee for a single product review video and a commission payment for every sale driven through an affiliate link to be included in your video description… but it also has some exclusivity terms that could interfere with opportunities that might arise for you over the next couple of months. Hmm. You express your hesitance.

Not wanting the miss out on your value, the brand sweetens the deal with a bonus incentive: exclusive access to its upcoming tech conference. Since you’ve been saving up to attend this conference, anyway, you agree, and bam — you and the brand are happy and ready to draft an official agreement!

The bottom line

While brands are adapting to the future of marketing and the growing desire for diversified income, creators are thriving in this new world with their digital savvy and firm grasp of what they need, what their audience loves, and what their partnered brands want.

Moral of the story? Leverage your value if you want to explore mixed compensation and revel in the world of opportunity creators enjoy!

Read our blog post on performance-based marketing for more insights into compensation types.