How do shoutouts work? Pardon the total newbness!

Hello and thank you all again,
I keep seeing people talking about doing shoutouts, selling shoutouts, exchanging shoutouts...
Is that when you tag someone in your caption with an "at sign" (wth it doesnt let me us the actual "at sign"?!) so your followers can click on them and possibly follow them? Or do you do a "commercial" saying how cool they are and tagging them with an "at sign"?
Please explain!

Thanks again!
'Diacrit

It's tagging them in a post.... @

Thanks got it! Thats why they normally say you need to have 50K plus followers to make it worth while because only a small percent of people will engage...

Thanks again!