One of the most frequently asked questions we get at Allegiant Media surrounds how much brands should be paying influencers for their services. It’s a delicate question with a complicated answer, so we thought we’d break down a few key elements that will help you decide how much you should be paying creators to promote your brand on social media.
In short, brands should consider:
Influencer’s audience size + engagement rate + track record + time and effort required to produce content + length of partnership + proposed budget…
All these factors affect how much you should pay creators. Let’s go through these elements one by one and show how they can help you determine fair payment.
Your Budget & KPIs
Before running a talent search, it’s vital to plan ahead and decide on a few key factors, including a budget, and KPIs. When creating a new influencer marketing campaign you should have a clear understanding of how much you’re willing to allocate for your influencer marketing efforts. This will help you in negotiating rates with agencies and influencers because it will allow you to see how much you can afford to spend on each campaign and how many influencers you have the resources to hire.
After you decide on your budget, it’s time to determine your KPIs, or Key Performance Indicators. These are the 5 KPIs our technology provider Tagger suggests knowing before you do a talent search; conversions, referral traffic, audience & list growth, reach and brand awareness, and engagement.
Audience size & engagement rate
Now that you know how much money you have to spend and what your campaign goals are, it’s time to start thinking about how many influencers you’d like to hire and how much you’re going to pay them.
First, it’s helpful to take into account the influencer’s audience size. The standard tiers of influencers are categorised as follows:
- Nano-influencers: 1,000 – 10,000 followers.
- Micro-influencers: 10,000 – 50,000 followers.
- Mid-tier influencers: 50,000 – 500,000 followers.
- Macro-influencers: 500,000 – 1,000,000 followers.
- Mega-influencers: 1,000,000+ followers
Many brands find that Micro and even lower-Mid Tier influencers tend to have higher engagement rates with their followers. But landing a partnership with a Macro or even mega influencer can give your brand clout and prestige in the online community, making it more likely that other influencers will want to work with you in future.
In general, the payment you offer should correlate with both the size and reach of that influencer’s audience, as well as your campaign goals. If your goal is to gain prestige and authority in your brand vertical, you’ll most likely pay more for an upper-tier influencer. If your goal is to reach more engaged followers and drive sales, spreading out your investment among a greater number of micro influencers is an excellent strategy.
Experience level of the influencer
In addition to an influencer’s audience size, it’s important to take into account their level of expertise when it comes to working with brands. If an influencer is able to share a proven track record of past campaign results and successes, they will most likely require a higher rate.
Let’s illustrate this point with a hypothetical example. Say Influencer A has an audience of 60K and while they have a high engagement rate, they’re relatively new to brand partnerships. Then, say Influencer B has a smaller audience of 20K, but has more experience working with brands and has a proven history of being able to drive sales. You’ll most likely pay influencer B a higher rate than influencer A for the same type of post.
Effort required to create content
Perhaps the most important factor in determining an influencer’s rate is how much effort it will require on the influencer’s part to create, edit, and post the sponsored content. Whether it’s an in-feed photo, a long-form video, a story, a blog post, or an ongoing series, brands should keep in mind the amount of time, effort, and resources that go into creating the content representing their interests.
Remember, influencers are an all-in-one marketing expert, art director, talent, writer, photographer, videographer, and editor. When determining an influencer rate, estimate how long it may take an influencer to plan, stage, execute, edit, and post the content they’re providing. An hour’s work will obviously cost less than something that takes a full day.
Also keep in mind, will they have to hire outside help like a photographer or editor to produce the quality content you’re hoping for? Will they need to travel? Rent equipment or a studio? If so, bake that into their rate.
Length & terms of the proposed partnership
One way brands can maximise ROI is by offering long-term influencer partnerships. These work well for both brands and influencers. For influencers, a long term partnership means ongoing support to continue to create content for their audiences. For brands, it usually means your price per post will be lower (since you’re paying for more posts over time) and it also means repeated exposure to an engaged audience.
It’s also worth noting that the time of year you’re looking to partner with influencers will have an effect on their rate. If you’re wanting holiday content for example, even in a long-term partnership you can expect to pay a premium.
The terms and proposed usage rights for the content the influencer creates will also affect the price tag. If you’re looking to re-purpose their photos, videos, or other content for use on your brand’s site or social media, that will be reflected in the influencer’s rate.
And finally, if you’re hoping for exclusivity (as in the influencer can’t run promotions for any other brands while they’re working with you) that will also add onto your total.
Respect the influencer and/or agency’s quote
It’s ultimately the influencer who sets the final price for their time, content, expertise, and access to their carefully cultivated audience. Influencers are reasonable human beings who expect some negotiation in order to ensure both parties get what they need from a partnership. A seemingly small action of simply respecting their original quote and not straying too far off the mark goes a long way in developing a mutually beneficial relationship.
No matter the final cost, working with an influencer is going to be much more cost-effective and give you a higher ROI than traditional advertising, digital or otherwise.
Remember that influencers are people who are experts at creating content that appeals to a very specific online audience. If you make the effort to conscientiously partner with creators whose content and audiences align with your brand, you’ll be able to grow your reach, increase brand awareness, and drive sales in a meaningful way.
Want to see how Allegiant Media can help you discover and connect with the perfect influencers for your campaigns? Contact us for a demo and we’ll walk you through the platform.
This article was originally featured on TaggerMedia.com on April 26, 2021.