in my second company Prestige Labs I built up to over 5,000 Affiliates that generated 20 plus million dollar a year in revenue and that business continues to this day in Allen my software company which was my third big company we built up to over a thousand Affiliates that were agencies white labeling that software for my book launch for $100 million leads we got 30,000 Affiliates who promoted the actual book launch I've also invested in companies that I've personally endorsed and so I bring all these things up because most people don't know how to quote monetize an audience and after talking to a lot of creators or celebrities and influencers and also business owners who want to do deals with those people a lot of people don't share a construct in terms of thinking through how to make those deals happen and so I wanted to make this video to outline the four ways that I see those deals happening and the combinations between them and what considerations you might have whether you're on the doing the deal side of having an audience or being the person who wants to quote buy license rent the audience from an influencer or somebody who has those eyeballs all right so four ways to monetize an audience let's use a good marker that doesn't suck step one have good markers four ways to monetize and audience all right now right off the bat number one we've got Affiliates which is what I was saying earlier the second way that you can monetize an audience is through sponsorships some people call these endorsements the third way that you can do this is through Partnerships which usually involve equity and the fourth way that we can do this through starting your own if you're the influencer in this instent all right so we have Affiliates which is where you are getting paid after you make sales for a business sponsorships where they pay you first to advertise on behalf of the business and typically endorse it via your brand Partnerships where you go into a business that already has a product already has an infrastructure and you do one of these two things or a combination of these two things for equity and so the behavior AV haviors between affiliate sponsorships and Partnerships are more or less the same the difference is simply how you get compensated and then the fourth is where you just start your entirely owned brand to then promote to your audience all right so let's break down which of these and kind of where they sit on the Continuum and the reason I want to bring this up is because I'm having so many conversations with people who are like I have this audience I've built it for four years I just don't know what to do and so I think of these four on a Continuum all right and I can think of this Continuum in terms of difficult ulty and risk and value all right and so on this side you've got the Affiliates this is the fastest way that you could immediately make money most businesses that have affiliate programs you can sign up automatically they have predetermined uh terms that are associated with this agreement and as unless you do something that's really you know nefarious or weird they're happy to have you sell their stuff so one is this one's fastest this is lowrisk for kind of both parties because if you are an affiliate and you're promoting it like they don't have to pay you until after you make a sale now for you you also don't get capped and so if you can make a ton of sales and you feel like you're being undervalued then you just get to prove that you are actually good at promoting and that your audience is actually a good fit for whatever that product is but from a value perspective so I call it exit value affiliate revenue streams are not typically that valuable so they will contribute to the sellability of the company but the majority of that value would come in the terms of a multiple of the cash flow that you're receiving as an affiliate multiplied or discounted by how reliable the business that you're doing business with is and so if I'm an affiliate of the US government you know what I mean and I recruit people for the military then I probably can say that my business model is sound and the US government's not going to go away I'm not getting not notwithstanding you know theories and whatnot all right but by and large it's be a trustworthy third party on the flip side if I have some you know info thing that is going to disappear tomorrow because there's some Arbitrage opportunity that your business opportunity then this is going to be basically have no value because that business that underlines that cash flow has no value all right and so we're moving along here so this is the lowest value probably middle work lowish risk for you all right the next is you've got sponsorships so sponsorships is where someone pays you first all right so you receive cash and then you make the endorsement and so usually this is in two forms you advertise to your audience and the reason I say advertise rather than here it sell here you only get paid after people buy with sponsorships you get paid first and so that means that you are advertising you're a traffic source for the business and so you will get paid as a traffic Source typically based on cpms meaning cost per Impressions that you can have in terms of views to an audience now these sponsorships come in the form of you posting stuff to your audience which for them they see this as free traffic they're technically paying for it but you're monetizing the traffic that you have the other way which is the more scalable way is something called whitelisting which is basically them taking whatever your posts are and then running them as ads and so let's say I have a million person audience I make a post and only you know 200,000 people people see it and as most content creators would do you wouldn't want to post over and over again about that thing because it would kind of be like oh this guy's just promoting this thing over and over again it wouldn't feel good right and so you might make a post or two every so often to not interrupt the value that you're providing to your audience too much and so the way to solve this really for both parties is you make an advertisement saying hey I just partnered with Soo their thing is awesome I've actually been using it for years finally we came to an agreement I think you guys might like it check it out right and so that wh listing then allows them to blast it to people way outside of your audience I like this a lot as a win-win because the business pays money to advertise your brand so they make you bigger and they're spending money to advertise you but at the same time they get higher conversion rate because you're probably better on camera you're better spoken and you already have a certain amount of warm audience that recognize you at least your face or your mannerisms so you convert it a higher percentage so the business makes money you grow your brand this is a really nice partnership now these deals sponsorships are harder to come by than affiliate deals because most affiliate companies just have a program an influencer program an affiliate program and you just sign up on the standard terms sponsorships tend to be more allak cart depending on the size of the influencer relative to the size of the company and so for extreme examples if you're a huge influencer and there's a tiny company you'll be able to get an amazing sponsorship deal if it's a huge company like Nike and you're a small influencer you might not get any deal and you still wear their stuff and so it's really the balance between who has how much leverage in the negotiation which brings us to the fourth one or sorry the third one which is Partnerships all right now as we move along here sponsorships also don't have kind of like Affiliates huge exit value the only place that sponsorships really become exit valuable exit value for a business is if you have a True Media company now if you're a personal brand it's really tough to exit your personal brand but if I have an army of influencers and I negotiate deals through my network and say hey uh you know paps Blue Ribbon or you know Budweiser whatever I have a thousand influencers that fit your ideal profile for customers and I'll negotiate an umbrella deal and then all of them are forced because the have with them to promote your stuff now you have a media company which is very similar to a talent agency slightly different but has a lot of similarities and so then then that sponsorship revenue is really the main Revenue your business which is that you sell traffic at a discount right but for the for the influencer individually these two things very hard to sell not really sellable not much now once we get into this side these deals get harder and harder to do and you do fewer and fewer of them as you go down this line so a partnership can either be a minority deal or a majority deal again if you're going to go partner with a company and you're huge and they're tiny then it might be a majority deal if they're huge and your tiny relative to them then it might be a minority deal meaning you're not going to get all of the company and that can range from you know 0.1% of the business all the way to you getting you know 99% of the business in terms of the range and so anything that you can imagine in terms of economics here is going to be negotiable but one of the thing or some of the things that I would consider here is performance which is this is again for both parties you can have Equity as the form of compensation rather than necessarily cash and you say hey if I bring you an extra thousand customers I get you know 1% per th000 customers that I bring you to the platform or whatever and then you put a cap on that at some point where you say up to to you know 10% great and so that way it's a little bit balanced for you and for the business now one of the considerations that you have to have if you were the uh content creator or the influencer is that the the the the association that you make with their brand is permanent as soon as you make that public decoration you transfer all of that Goodwill you transfer that Association to them and so if you are going to do a deal like this my recommendation is that you want to have at least something upfront so no matter what for doing this deal you get some amount of this Equity up front and then some percentage that's based on performance now the one of the last components that I'll say and there's obviously a lot of ways that you can do deals but these are just the things that I think through is time time and so somebody who's on the business owner side is like well I don't want you to just make one Association I want you to keep doing this for a long period of time and so they can take some of this Equity that they want to give you and say all right I'm going to give you you know 25% of your Equity upfront I'm going to give you uh 25% based on performance and I'm going to give you 50% over time and so I want you to promote for the next four years and if for some reason something happens then you're not going to get that vesting because we had some sort of breakup right and so whenever I think through these terms I just like to think through all the W's which is who what where when why how right which is okay I want you to post and if you're the content grator you should be asking that same thing which is how much do you want me to post right and about what and you have to take into consideration that you have to keep building your brand right and so you don't want to just be like all of a sudden some shill like that's not good you want to Tastefully be able to integrate that promotion into the content that you have and so You' have to say okay well I think the best way for us to do this is for me to you know put uh your links in my bio and I'll put it up for one week of the month and I will make one long form thing that IM mentions it and you know five short form things via posts or stories and then when you define that the reason this is so important is that you define that stuff up front so that it's just very clear don't just say like I will promote the business and whatnot because it just doesn't work as well and you might say I will also you know record ads once a month that you can then use for wh listing and so all of these things and this is where this gets more nuanced in Deal making is is you can be a partner and still have affiliate Revenue you can be a partner and still get paid from a sponsorship perspective and so these things are not mutually exclusive but like you might have a primarily sponsorship deal with some element of equity but I will say on a personal level the more money you have right now the more you want to lean this way because the equity the sponsorship cash that you choose to take you do at the expensive equity and if you believe in the product and you believe that the company is exit in the future then in my opinion it makes sense to delay it for the little bit longer run but this takes on more risk because here you get paid today no matter what here you might not ever get paid if the company doesn't sell and so by taking on more risk you want to make sure that you're getting a disproportionate reward in the in the form of stock shares options equity and things like that all right and so as we're walking through this and you're thinking okay how can I monetize my brand it's like okay the first level I can do Affiliates and just promote other people's stuff and get paid for it the next level I can be a media source for them I can be traffic for them via sponsor ship right these are a little bit more nuanced deals taking another step I can actually partner with the brand and say Hey I want to own 1% 5% 10% 50% depending on how big you are and how big your audience is and then finally you can start your own brand and when I say brand I say that all inclusive in terms of products and brand and when you do this you can either white label which which means you go to somebody who manufactures stuff already and say can you slap my logo on it which is an option and the other option is that you do custom formulations custom I'll just say custom stuff all right and so if I were selling supplements for example I might go to a a company that already has a product that's done and I just say hey I want to slap my label on it on the custom version of this it's like hey I want this gram of this we're going to test out flavors together and we're going to put it together make a custom product that no one else has same things works with merchandise so if you said hey I want to get a white T-shirt and you just try six different white t-shirts that people have off the shelf that are manufacturers they say okay just slap my logo on it let's go or you say hey what are the different Fabrics what are the different materials that I can put together these are the cuts that I want to look at this is how I want it to fit right that becomes more custom and so white label is faster and easier from a speed perspective but usually me personally I prefer to do custom stuff because I don't like anyone else being able to sell something that's identical to me and be able to have any kind of pricing power over what I have because the moment that people find out that you just have a generic product that you slap the label on it just does it's not a good look right and so again I don't think there's anything like I want to be clear I don't think there's anything wrong with doing white label I just think that if we were to put this on this sphere like white label would be here and custom would be here but if you're going to take the risk on of starting your own brand I might as well get all the benefits of doing it but this costs more money white label tends to Cost Less because you don't have to get custom templates custom forms and pay and incur all those costs costs because someone else their whole business is based around doing this for other people all right now the difference here is that for all of these situations you're going to promote stuff that already exists here you're starting the thing from Ground Zero which means that you're on the other side of the table now you start with 100% equity and then you start paying people this way down the line and so if you are an influencer you have an audience or you're a business owner and you're trying to make deals with influencers this is how I think through this and I try and see there are elements that you can borrow from each of these kind of verticals to tweak the deal to make it right for everyone and so I think about it in terms of what's the exit value what cash is going to be going in or out of the business how much work is the person going to do and then how much risk am I or are they exposed to and by balancing those four things you can usually navigate along this Continuum to find the right part the right deal that's right for you and the product that's it