As far as new age media goes, influencers are the hottest “commodity” on the market. But how much to pay an influencer?
There are many questions about their compensation. Perhaps because there’s still informal practice going on in the mix. Much like going to your local market and negotiating with a seller for a piece of craft. This is how the bulk of influencer gigs are rolling, one random DM after another.
But thankfully, brands and influencers can easily discover favorable collaboration opportunities on an influencer marketing platform like Afluencer.
Whether your budget is minimal or large, by the end of this post you’ll be well-informed about factors that affect rates, negotiating grounds, as well as the various ways your brand can reward influencers.
So let’s get those rate cards and offers ready.
Factors That Affect Influencer Rates
Before we get into influencer marketing rate sheets, it helps to understand what factors determine the value in the first place.
This is probably the first thing that comes to mind when paying an influencer. Follower numbers.
This can be wrapped up in one word: attention. How much attention is at stake?
A nano influencer with 8k followers is not in the same league as a mega influencer like Kylie Jenner (the highest-paid influencer at $1.2m+ per Instagram post) with 177m followers.
The more followers, the more attention, and the more value each piece of shared content holds.
Negotiations start here. An influencer’s engagement rate will create somewhat of a practical estimation of the potential number of people that will actually engage with a post. Because not all followers will be reached and not all followers will engage with their content.
Here’s a simple scenario to help you understand this better. You have two influencers, both with 10k followers each.
Influencer A has an average engagement rate of 10%.
Influencer B has an average engagement rate of 2%.
What does this mean?
Influencer A: 10% engagement rate of 10,000 followers = 1,000 engaged people
Influencer B: 2% engagement rate of 10,000 followers = 200 engaged people
When Influencer A shares a piece of content, 1,000 people are likely to engage with the post. Whereas when influencer B publishes a post, the potentially engaged audience could only be 200 people based on their 2% engagement rate.
Now, let’s make it a little more interesting with another scenario.
Influencer C has 100,000 followers with an average engagement rate of 10%
Influencer D has 150,000 followers with an average engagement rate of 5%
Who do you think is more valuable?
The engagement rate here is the deal-breaker.
Influencer C can potentially attain 10,000 engaged people on a post, while influencer D’s engaged audience is estimated at 7,500 despite having 50k more followers than their counterpart.
See what a difference in value an engagement rate can make?
The more talented the influencer, the more you’ll be expected to pay them.
But what does this talent mean?
In the influencer marketing world, talent can be perceived as content creation capabilities.
For example, an influencer with 10k followers that publishes a picture is not the same as an influencer with 10k followers that publishes a video. Writing a blog post is also another talent.
And producing a 1-minute Instagram video is not the same value as a 20-minute YouTube video.
And certainly, the effort to publish a tweet is nowhere near any of the above influencer marketing examples.
The talent cost is a consideration when determining the value of an influencer.
Here’s where your own pickiness will cost you.
Would you be ok if your influencer promotes another brand in a similar category? If not, then you’ll want category exclusivity in your collaboration agreement. Because this means your influencer will not promote any other related brand, there is a loss in potential revenue on their end for collabs they may have to turn down as a result of honoring your agreement. A loss that you’d need to compensate for.
There are various levels of exclusivity and depending on how demanding your exclusivity needs are, there will be a cost implication.
Duration of The Campaign
Once-off promotions are pretty straightforward and standard rates are usually applied in these scenarios.
However, it’s really not ideal to work with an influencer for a single-post promotion.
It is recommended to run an influencer campaign over a period – for many reasons. Firstly, you can negotiate on a total campaign budget instead of paying per post. Secondly, there is room to perfect the execution of the campaign for the duration based on data insights at every stage.
The Lifespan of Published Content
Not all influencer posts are published permanently. The collab agreement will specify the period that sponsored posts should be up on the influencer’s account. Whether it’s a few days or weeks, or months – this “airtime” will come at various rates.
Types of Influencers
The previous points may have slightly touched on this point, but I feel it needs its own mention. The price tag of an influencer may depend on the type of influencer you’re dealing with. A newbie influencer, for example, may probably be the easiest and the cheapest to please. They’re starting out and keen to build their portfolio so they’ll agree to even the basic of rewards, such a commission on sales.
A celebrity influencer, on the other hand, is in-demand and not always available. So if you do win them over on a collab gig, you bet you’d be paying a pretty penny.
Ways to Reward Influencers
And now for the ripe part of this post.
Let’s take a look at all the possible ways you can compensate influencers. Yes cash is one of them, but guess what? We’ll be covering a number of ways you can reward influencers.
Since this is the most talked-about reward method, let’s get it out of the way.
Cash payouts are extremely attractive to influencers. If your brand can afford it, you’ll certainly have a large number of interested candidates willing to collaborate with you.
But the biggest question is, what rate should you pay influencers? For your convenience here’s a quick summary of basic influencer rate benchmarks:
Instagram: $10 per post / 1,000 followers, $250-$750 per 1,000 engagements
Facebook: $25 per post / 1,000 followers
YouTube: $20 per video / 1,000 subscribers, $50-$100 per 1,000 video views
Snapchat: $10 per post / 1,000 followers
Twitter: $2 per post / 1,000 followers
Blog: $60 per post / 1,000 unique visitors
Use these rates as a base but remember the factors discussed earlier. Factors such as exclusivity, engagement rates, the lifespan of posts, the duration of campaigns, and the types of influencers you’re dealing with will impact the rate.
One of the major concerns about this compensation method is the uncertainty around the return on investment – especially for brands looking to drive sales. Brands want to be assured that they’re getting value for money.
As a result, influencers must be able to show for a satisfying profile and collab portfolio in order to convince a prospective brand. Influencers without a portfolio are classified as “high risk” so this then gives the negotiating power to the brand.
Commission rewards can be a fair win-win for all. It seems fair and it also seems like a simplified way to compensate influencers. However, there’s more to a percentage of sales in order to make this method successful.
- Is your product or service interesting enough? The thing about offering commissions is that influencers must first commit themselves to promotion activities upfront. Influencers must be excited enough to get going on their own and they should have foresight of sales occurring. If they don’t they won’t put in the effort. And if they don’t think they’ll sell anything, they won’t be keen on this offer.
- Offer attractive commissions. Your commission structure should make sense. A 3% commission isn’t going to motivate anyone unless they’re selling a $100,000+ product, which most aren’t. Standard commissions are in the range of 10-20% and anything upwards of 40% can be very attractive to influencers. Your commission offer should be worth their while. If not, they’ll give you a pass.
- Offer easy commission tracking. Sales need to be tracked efficiently in order for this method to work. This can usually be accomplished by giving your influencers their own unique coupon code to share with their followers. Tracking sales made through coupon codes is easy enough especially if you don’t have advanced referral tracking systems.
While this method may be an ideal option especially for brands without an influencer budget, the major concern about offering commissions only, is that it does lack commitment from the brand’s side. Hence why experienced influencers may not be interested here.
However, a commission-only reward method can work with new or micro-influencers as they’re still growing and are open to opportunities to build their profile.
Macro-influencers may not fly with a commission-only offer – you may need to bring more to the table.
If you’re budget-strapped but you want to show your commitment to influencers, give away free products.
Keep in mind the other additional benefits to this. Over and above providing an appealing incentive, you’ll also create an opportunity for influencers to produce product pictures and videos – building your media in a cost-effective way. Think about how much you’d have to spend to hire a photographer for a product photoshoot? An influencer collab may be an affordable alternative.
Free merch plus a nice commission would make a sweet reward combo here.
Influencer Branded Product Line
This is probably one of the most creative ways to engage influencers. Not only is this super attractive, but it can work for both large and small businesses.
So, how does it work?
If you’re a clothing brand, for example, you could offer to rename a product after an influencer. Feeling generous? Dedicate an entire collection to them. This is the simple version.
A more complex version, which may be applicable to larger brands, is to engage an influencer in the product development stage and get them to create their very own product themselves.
Either way, influencers will be excited to promote products with their own name on it. It’s a pretty epic brag-worthy accomplishment.
Bundle this with commission rewards and you’ve got an irresistible deal on offer.
Events & Experiences
Does your brand host certain events that would be of interest to influencers? Perhaps product launches or even exclusive product workshops? Not only would these opportunities be exciting to influencers, but it’s also a chance to connect with your influencers in person and build longterm relationships. The bonus perk here for influencers is the chance to network within the industry.
Influencer Exclusive Discounts
This works especially well if your influencers will likely become customers (if they aren’t already). Offer them VIP discounts as part of the collab deal. Remember the goal is to offer something that’s attractive. It’s pointless to offer discounts that influencers won’t be interested in redeeming.
Exposure & Work Experience
If newbie and micro-influencers are on your list, offering extra exposure on your social channels may be of interest to them as they’re always looking for ways to grow their influence. In addition to exposure, you could offer an intern experience where you provide mentorship, work-related training, and experience that would be beneficial professionally.
This method may have a particular appeal to college student influencers.
Gifts & Bonus Prizes
Did you know that one of the top reasons a person leaves their job is because they feel unappreciated? In the influencer world, the same holds true.
Treat your influencers to unexpected rewards. Send them a gift on their birthday or special occasion.
Have they exceeded performance expectations? Reward them with a bonus prize.
Influencers that help your business grow are influencers you’d want to keep close. Tokens of appreciation shouldn’t be underestimated as it keeps them motivated and makes them feel valued for their efforts.
Pay for Value & Reward Results
As you’ve now discovered, there’s more to rewarding influencers than just paying for the number of followers.
Understanding all the factors that impact the value of an influencer can give your brand negotiating power. It will also equip you to develop a well-crafted influencer marketing program in order to recruit influencers for your brand.
Whether you have a sizeable influencer budget or not, I hope you’re inspired to explore other creative methods to reward influencers for a mutually beneficial relationship.
Hero photo by Isi Parente on Unsplash