Hot as influencer marketing is these days, it’s easy to wonder how much do Instagram influencers make. After all, the industry as a whole makes billions of dollars each year. While some influencers are household names and thus celebrities, such as Kylie Jenner or Taylor Swift, most others are ordinary people. Influencers can be housewives, bankers, college students, aestheticians, and more. Really, anyone with a social media account and some spare time can become a nano or micro-influencer with enough niche content, persistence, engagement, and time. Here, we’ll just talk about the Instagram crowd. Along with YouTube, it is one of the more profitable platforms for influencers.
How Much Do Instagram Influencers Make? It’s More Than Just Sponsorships
When we talk about how much do Instagram influencers mark, there are several factors at play. First of all, not everyone spends all their time working as an influencer. Rather, many start out as hobbyists, and many never quit their day job and instead see their role as an influencer as a side hustle. Not only that but some influencers make money in ways that don’t involve paid-for sponsored posts. Income can be thought of fairly broadly.
Some work for product
Especially when starting out in the age of influence, many Instagram personalities will exchange sponsored posts for goods and services. One of the nice things about this option is that the influencer gets to play with something for free, then give his or her opinion about it. Often, these deals are set up in a review type format, but that doesn’t work as well for Instagram.
For Instagram product exchanges, try a selfie showing off the product and saying something complimentary about it. Beauty products are great for this format: perhaps a foundation held up all day on the model’s oily skin, which is a major issue. Or, an influencer in outdoor sports takes a hydration pack on the latest adventure. At some scenic spot, he takes a photo with himself and the item and writes the caption about it’s awesomeness (or adds some words to the picture).
Here’s the key to making this type of deal: Make it a fair exchange. As I’ve said before, you don’t want to make an influencer feel like he or she is being cheated. Not only will they not come back, but they have followers who will listen if they complain about it. At the end of the day, you need to have a mutually beneficial relationship with your influencers.
It isn’t always an upfront fee
Not every influencer likes to get paid a flat fee for their creative work, and there are other alternatives besides giving away product. One of the better options is with affiliate marketing links. Here, you would have the influencer incorporate the link in their post somehow. That could mean adding the link through photo editing, in which case the consumer would have to type in the address manually. Or, the link could be added in the Instagram bio area, which allows directly adding links. Read my post on Instagram link in bio to see how this can look.
Another way to pay influencers for results rather than exposure is by using promotional codes. Here, it is very easy for the influencer to add the promo code in the photo description. When someone buys your product using the code, the influencer would get a commission.
One thing I like about this kind of compensation is that it pays for results. However, it isn’t the way to go if you’re mainly trying to build brand awareness. That’s because brand awareness campaigns aren’t intended to get immediate sales, which tends to be the goal of affiliate marketing. Using these techniques inappropriately is a great way to make an influencer feel cheated and destroy the relationship.
Not all revenue comes from sponsored posts.
Although many influencers get paid primarily through sponsored posts, many influencers also have other sources of revenue. For instance, having a custom line of products is a popular way to monetize influence. You’ll see this a lot with voices in the fashion or beauty industry: Take a look at some of the larger influencers, and they have a product line all their own. Alternatively, they might collaborate with a major brand to make a “collaboration.” Here, the influencer helps design something special. In both cases, the influencer makes money off the sales. While a few Instagram posts will likely be part of the promotion, this isn’t the same thing as a sponsorship.
Here’s another way that people can monetize Instagram: teaching. Instagram TV allows users to post videos, and as a result people can do tutorials or discuss items of interest to their audience. So, a rock climbing enthusiast might give followers tips, and then advertise a course on rock climbing. At the same time, he or she might help sell rock climbing gear through sponsored posts.
Sponsored Posts: There’s No Fixed Formula for How Much Instagram Influencers Make
Perhaps the trickiest part about sponsored influencer posts is trying to negotiate a fair price for the campaign. As I pointed out above, there’s more than one way to make money as an Instagram influencer, and not all of them involve cash. Furthermore, the world of influencer marketing is still something of a Wild West town. Essentially, it all comes down to negotiating agreeable terms with your intended influencer. Remember, influencer marketing generally has a high return on investment, so there’s no reason to be a cheapskate. At the same time, you don’t want to get taken advantage of. Here are some considerations.
Check Out a Calculator
While rates are highly negotiable in influencer marketing, there are some emerging industry models that serve as a good starting place. For instance, there’s the Instagram Money Calculator. This one considers a variety of variables, such as the number of followers and engagement rate, to give you a starting point. I’m a fan of this tool because, in addition to a rough estimate of cash payments, they’ll give you detailed information about the kinds of people an influencer has following them. Look at the report, and you can quickly find out if they’re a match for your buyer persona.
Another calculator to check out is called the Influencer Rate Map. While it won’t give you a price range for a specific influencer, it does give you ranges based on several variables. Its data is drawn from influencers and brands who submit reports. Running my basic demographics through the calculator, the results were comparable to what I got on the other one.
What does the consistency in calculators mean? That there is an emerging set of rules on how to set prices for the majority of small to medium sized influencers. When you’re talking about an influencer with millions of followers some of these rules are altered significantly, and they do tend to have set prices.
Consider the Number of Followers
In the industry, we talk about nano, micro, macro, and mega. Really, the mega influencers are bordering on celebrity status with over a million followers. Nano influencers have fewer than 10,000 followers, micro up to 100,000, and macro between 100k and a million. A lot of ink has been spilled, including on my blog, about the value of the nano and micro influencers.
Why does following size matter for pricing? Because a lot of brands pay by the number of followers that the influencer has. Generally, for the lower levels of influencer, expect to pay around $10 per 1,000 followers. That means shelling out $100 for that micro influencer or $1,000 for a macro influencer. Keep in mind, however, that some influencers charge something significantly outside those guidelines. Being someone famous off of Instagram can cause a price to rise, while willingness to work for charities might lower them.
The coronavirus pandemic has affected pricing, and this might be to the benefit of the brand. Read my post on changes in influencer marketing with COVID-19 for the details.
Think About Engagement
One thing you’ll see in the calculators mentioned above is that they take follower engagement into account. With the larger followings there will be more people who just hang around to see what someone has to say. For instance, Katy Perry has a very low engagement rate of under 1%. She has a lot of followers, and is famous in other forums. We’d think of her Instagram nod as more of a celebrity endorsement, and these are priced very differently.
On the other hand, engagement rate makes a big difference with lower level influencers. That’s why some influencers and brands use a different pricing model: number of engagements. With this model, a brand pays based on the number of followers who generally engage with the influencer’s posts. Here, the price tends to run between $250 and $750 per 1,000 engagements.
Arguably, the pay per engagement model looks more expensive, and it’s definitely less set in stone. However, people who engage are more likely to buy, at least in the short term. Plus, effective influencers start at around 2% engagement. To get 1,000 individual engagements at this rate, they’d need to have 50,000 total subscribers. Do the math, and you’ll see it can actually be cheaper to go this route.
Don’t forget industry
Just like everything else in our free market economy, supply and demand is a major driver of pricing. For instance, if your brand is a B2B company that sells farm machinery, there won’t be a lot of influencers available. While there are a lot of farmers out there, not many have the time to become a social media influencer. Plus, farm machinery is something that farmers purchase relatively rarely, and when they do it’s a major expense. With any kind of technical sales, expect to pay a bit more than the base rate. It doesn’t make sense to settle for someone who doesn’t know what they’re doing.
However, beauty is a category where everyone wants to break in. Makeup, hair, and skincare are a lot of fun for many people, and highly profitable for companies. Given all those glossy magazines and glitzy events, everyone wants to look their best. And the younger generation is often obsessed with image. It’s no wonder that people want to pitch beauty products, and with competition comes lower prices.
While an influencer campaign usually is just a post or a Story, there are other times when the overall relationship is more complicated. In these cases, it can cost significantly more money to engage the influencer. Here are some examples of “extras” that cost:
Especially if you are trying to work with an influencer in highly competitive industries, you might try to edge out the competition more thoroughly. In this case, it might be advantageous to come up with an exclusivity contract with them. Here, you’re asking the influencer not to work with your competitors for the endorsed product. As you can imagine, this is going to cost you more money because you’re asking them to give up money other places.
This one might mean a few different things. For instance, you might pay for the right to post that Instagram photo in other places, such as your website or a traditional ad campaign. Doing this kind of deal costs more, because you are paying for exposure in more than one forum from their creative work. Expect to pay even more if the influencer has a large following offline.
This almost goes without saying, but not every Instagram influencer is famous only on Instagram or even only on social media. While you might be thinking mainly of celebrities here, it is also true of subject matter experts in various industries. For instance, well-known athletes will do endorsements. Scientists might help promote laboratory equipment, which can not only be sold to big businesses but also to the local high school science lab. Any time an offline reputation is significant, expect to pay more.
Final Words on How Much do Instagram Influencers Make
While there are definitely stars in the influencer marketing industry, the majority of these people will need some other kind of job. Most influencers see their business as a side hustle, and it’s easy to see why: often, you need to do a lot of posts to make significant amounts of money. In addition to content creation, there’s engaging with followers, trying out products, and negotiating deals. Don’t expect to get rich quick.
Hero photo by Adam Winger on Unsplash