The 5 Key Factors That Directly Impact How Much Brands and Marketers Pay for Influencer Partnerships
Over the years, we’ve fielded tons of questions about influencer marketing, running campaigns and hiring influencers. Without a doubt, one of THE most common questions brands want to know is how much they should be paying influencer partners. “How much does an influencer charge anyway? What’s the standard rate? Can you at least give me a ballpark?”
Well, let’s start with this little truth bomb: There’s not really a standard rate. Trying to come up with a standard rate for influencers is like trying to come up with a standard movie rate for every actor on the planet. No matter how you slice it, you’re not going to get Daniel Craig for the same price you would get your friend Craig Daniels (whose credits to date include three college plays and being a hometown hero because he stars in the commercials for the local sandwich shop). Trying to ‘pre-price’ influencers is the same way.
Influencer rates can and do vary wildly, even for influencers within the same niche, with the same number of followers. Influencer marketing has technically been around for a very long time, even though it sort of feels like when we adapted it to social media things got a little wild.
Many marketers have no idea what to expect when it comes to budgeting for influencers. And I’ll let you in on a secret: A lot of influencers have no idea how they should price their services either.
So, we’re talking money in this post. We’re going to break down what should go into your calculations when you’re trying to set a budget for an influencer campaign, and what you’re actually paying for. Armed with this guide, you’ll soon feel more confident setting budgets for influencer marketing campaigns - and sticking to them.
Here’s What Determines Influencer Rates
Every influencer sets his or her own rates. There isn’t a standard rate for a post. Some influencers will undercharge, others will overcharge. You can Google it, but you’ll probably face a similar challenge, with every result providing a different answer to the question. Just in general, sponsored content ranges in cost from $100 for an Instagram post to over $250k for a YouTube video.
A general rule of thumb is to consider your campaign goals and the ROI you want to see with the campaign. Using these as starting points can help you to manage your expectations. Setting a budget before heading out into the influencer marketing world can help to keep costs down. But, if you begin to find your numbers are very different from what you’re being quoted by the influencers themselves, you might need to rethink your goals.
Factor 1: Audience Size
As with most aspects of influencer marketing, follower size makes a big impact on the price an influencer can and will charge. It might go without saying, but let’s go for it anyway - the larger an influencer’s audience, the more the influencer can justifiably charge to create sponsored content.
Follower size is, of course, very important when picking the right influencer. It determines how many people will see your brand in the sponsored post. If your big goal is brand awareness, then you want as many potential buyers to see the post as possible. But, keep in mind that while audience size does determine the rate an influencer charges, follower size is not the best metric for deciding which influencer to choose for partnership opportunities.
That said, you absolutely have to have a way to qualify an influencer’s followers by checking organic follower growth and engagement ratios. Without doing this, you really don’t know what percentage of an influencer’s audience are accounts that are owned and operated by real buyers. You could end up paying top dollar for bottom-level influence.
You might decide that an influencer with a large following isn’t going to be the best fit for your needs, as you may need access to smaller, more targeted audience segments. But, smaller influencers won’t always mean smaller prices, and because a micro influencer’s audience is often more niche-down and streamlined, the smaller audience can actually be worth more to your business than the bigger influencers and their wide nets. Combine this with the other factors on the list, and you can easily see why pricing structures can be so varied.
Factor 2: Audience Engagement
No matter how many followers an influencer has, if those followers aren’t interested in an influencer’s content, they won’t engage with it. Without that engagement - that proof that an influencer’s posts are making an impact - an influencer can’t actually provide any proof to brands of the influence he or she wields. For simplicity's sake, you can work out an influencers engagement rate with this simple equation:
Average post engagements / number of followers x 100
If an influencer has 100k followers, but only receives 10 likes per post, their engagement rate is going to be a measly 0.1%. On the other hand, a smaller influencer with just 5k followers who receives an average of 300 likes a post has an engagement rate of six percent and will actually be more valuable to your campaign.
Analyzing an influencer’s engagement ratios allows you to compare influencers side-by-side to gauge their actual influence (and thus their value) irrespective of audience size. You want influencers to maintain between two and nine percent quality engagement and positive audience sentiment with each post.
In general, the larger the audience, the smaller the engagement ratio. The Shelf always aims to work with macro-influencers who can maintain at least 1.5 percent engagement and micro-influencers (3K to 100K followers) who have anywhere from two percent to, say… nine percent engagement.
Engagement isn’t just likes though. You should be looking at comments, re-tweets, shares, and any other metrics that shows someone actively engaging with an influencer’s content. And these numbers will vary by platform.
It’s also worth checking who the people engaging actually are to ensure the followers who engage aren’t just other influencers participating in like-for-like campaigns with no real interest in the post being liked. Like-for-like is a common strategy used by influencers to grow their audience and engagement numbers. But these types of Likes fall into the category of vanity metrics, and those rarely convert.
So, be warned: If an influencers core source of engagement is other influencers, it may be worth looking elsewhere.
Factor 3: Quality Content (Especially Quality Photography)
UGC rights is the name of the game in this business, and brands want (and expect) amazing user-generated content.
So, It should go without saying that you could skip the influencers whose feeds are stained with grammatical errors, bad spelling, low-quality photography and poorly edited video.
Nearly 100 percent of our clients want to work with influencers who produce the type of content that can be reused as-is in the company’s own branded feed and even in other advertisements. So, an influencer who produces that level of stunning, scroll-stopping content will typically demand a premium for his or her skill set.
Factor 4: Past Performance
Many successful influencers already have a track record of working with brands before you pop into their DMs. That said, you can inquire to find out just how effective their previous partnerships were. Influencers who have been able to achieve good results for previous brands will be more than happy to share that with you - and it means they know what they're doing.
If they seem reluctant to share this info, that could be a red flag for you. If, however, they have lots to say about how they helped the brand, prepare to pay a little extra for their expertise.
If they haven't worked with brands before, then get the analytics on their own posts and the demographics of their audience. Our platform actually does those for you. You need to see how many interactions an influencer is receiving, including those that are visible to the public like website clicks, messages, etc. This is the kind of info you need to help you paint a clearer picture of the influencer’s ability. The bigger the results he or she can get, the more valuable the influencer is to your campaign… and the more the influencer will be able to charge for partnerships.
Factor 5: The Platform / Content Type
The final thing to consider is the type of content you need, and the platform(s) for which your influencer needs to produce this content. Do you need blog posts, videos, social media posts, images? Different platforms call for different strategies… and budgets.
For example, on YouTube, it’s going to take considerably more time, equipment, and skill to produce great content than it would on Twitter. Instagram Stories is a less-produced style of video content, as well. That’s why it’s important to tie your business goals to an execution strategy (which we’re really great at doing here at The Shelf) that will help you reach those goals in the fastest, most effective, most affordable way possible.
When approaching an influencer, think about where your audience is online. You may want to work across multiple platforms to help reach more people, or a more diverse selection of people. Each platform also has different rules when it comes to paid partnerships and how they should be operated. Both you and your influencer should make sure that you’re familiar with this before launching the campaign.
Also, the amount of times the influencer mentions your brand will vary by platform as well. For example, on Twitter one lone tweet is likely to get lost in such a fast moving site, so you would want multiple mentions from your influencer.
YouTube on the other hand, one video will carry enough weight for you to just be mentioned once. FYI: You also have to decide if you want a product mention in that video or if you want a dedicated video - one that’s JUST about your product. You can expect dedicated videos to be more expensive than video mentions.
To Sum Up
We’ve talked about a lot of different factors in this article that all contribute to how much an influencer is going to charge you to create sponsored content. Each influencer is different, just like each brand is different, and there is no set scale of payment that we can follow. Despite this, going through the factors we mentioned can help you to get an idea of what your budget can afford, and what level of influencer you want to work with. So, to sum up, here are the most important things to consider:
How many followers do they have? More followers = higher cost
What is their engagement rate like? Higher engagement = higher cost
How good is their content? Higher quality = higher cost
What form does their content take? More effort = higher cost
Have they worked with brands before? Previous success = higher cost
What platform are they working on? Different platforms = different costs
How many platforms will your campaign be live on? More platforms = higher costs
The Shelf is an influencer marketing company that designs and implements the highest performing campaigns in the lifestyle space (fashion, beauty, mommy, food, travel, home, DIY, health, and fitness). If you’re reading this post and wondering how to use Snapchat, Instagram, IGTV, Facebook, Pinterest and YouTube to get your brand in front of buyers, we’ve got you covered. Sign up for a demo to get your custom proposal.
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