There’s no question that influencer marketing cost is a hot topic for marketers. With organic social reach at an all-time low, and with paid social an often-expensive proposition, marketers are finding influencer marketing to be a great way to reach potential customers. Unfortunately, unlike traditional forms of advertising, it is hard to know how much you should be paying. In today’s blog post, I’m going to help you understand how to pay your influencers, and what the overall associated costs are.
Ways to Pay Influencers
Before we talk about numbers, it’s important that we do some housekeeping. Influencer marketing cost is measured in terms of influencer fees and the price of any influencer marketing tools you use. However, it’s more complicated to make these calculations, because cash isn’t the only way to pay influencers. At the same time, there’s more than one way to get that compensation to them.
Pay the influencer directly
This one’s arguably the easiest and most direct method, because you can pay through PayPal and other online payment providers. Just set up the payment and walk away, while the accounting department keeps track of what has been spent. However, there are drawbacks to paying directly, such as taxation issues and the higher potential for fraud. In addition, by paying directly you will probably have to handle every aspect of the transaction yourself.
Use an agency
Especially if you don’t want to do much work of your own, agencies are a handy option. Often, you just need to tell the agency what they want and they’ll give you a quote for the influencer marketing cost. Unfortunately, by using an agency you are at their mercy. They typically pick the influencers themselves, and then do the negotiations. You might not have much creative control over the content, either.
Take advantage of platforms
Influencer marketing platforms, including influencer marketing marketplaces, help you with more than just influencer discovery. Depending on the service level you choose, they’ll let you handle all of the detail or very few. Some have payment processing built in, and most have analytics capabilities. The nice thing about using a platform is that it makes the process of influencer marketing somewhat less intimidating and safer. On the other hand, if the right influencer isn’t on the platform you’re using, then you might miss out. Finally, platform fees can be quite pricey.
Common Pricing Models for Determining Influencer Marketing Costs
As we all know, influencer marketing cost isn’t always easy to pin down. For instance, some influencers are highly effective and charge high prices for their influencer marketing services. However, the ones who are just starting out might be happy with freebies. Let’s take a look at the different ways in which brands compensate influencers.
Single post fees
By far the easiest way to pay influencers is with the flat fee. In this case you will compensate influencers for the content they have created and posted on their chosen platform. These could include Instagram posts or Stories, Facebook posts, blog posts, YouTube videos, and so on. From the influencer’s point of view, this payment method tells them exactly how much they will profit out of a collaboration. On the other hand, there isn’t much incentive for them to go the extra mile, because they get paid the same no matter how well the content performs.
From a marketer’s standpoint, flat fees also have the advantage of pricing certainty. However, this is often hard to determine. In order to avoid taking advantage of the influencer, marketers have to agree on a price that both sides agree is fair: without knowing the results in advance.
Free product
Most influencers start out by getting free or discounted products in exchange for their sponsored content. Doing it this way doesn’t cost marketers that much, because they really only have to consider the cost of production and shipping into the equation, not the markup. Not only that, but it pays the marketer back in terms of the influencer getting to really try out a product before talking about it. Speaking (or creating) from experience helps them represent the product more easily.
On the other hand, influencer gifting might not be enough for more experienced influencers. Especially when their reach is significant, or if they have a very high conversion/engagement rate, the free product might not be valuable enough to compensate them fairly. In these cases, you might consider a combination of free product and cash. Going this route allows the influencer to experience the product and still get adequate compensation.
Affiliate links
Affiliate marketing is probably the oldest online version of influencer marketing. Here, you give the content creator a special link that pays out when people buy stuff. That way, you’re only paying for results. Because there’s no guaranteed pay, the influencer will work hard to generate sales on your behalf to boost commissions. However, make sure that you pay enough commission for influencers to consider this kind of arrangement profitable.
Pay by campaign
If you’ve worked with an influencer for a while, it might be time to purchase more than one post at a time. Typically, the posts will be put up over time, say, a couple weeks or a month. This works especially well with companies in the travel industry, because you can pay an influencer to take many pictures of his or her trip, and post them on Instagram. Each is a separate advertisement for the tour company. Here, the idea is to draw the audience in to the overall story. From the influencer’s standpoint, this is a larger paycheck that they can count on. Marketers find them advantageous in terms of locked in pricing and fewer individual transactions.
Other Factors That Determine Influencer Marketing Costs
No matter how you pay influencers, your total influencer marketing costs will extend beyond the fees paid to influencers and intermediaries, or the value of gifted product. Instead, there is a whole range of services that you may need. Furthermore, optional expenses exist that might be advantageous for you and your brand. Let’s take a look at some of them.
How much work?
You wouldn’t pay employees without considering their real labor value, would you? There’s a reason that employees with skills make more money: they offer a higher return on investment, or it’s a more valuable resource. Likewise, with influencers their main value is in the work they do. No matter the kind of content involved, if it takes more time to make, it’s worth more. Sure, you may be thinking about the impressions gained or some other KPI. But the influencer has to price based on the kind amount of work. Time is their resource and they only have so much of it to sell. So, if you’re a cheapskate then the influencer will likely go elsewhere.
Is your niche competitive?
Some product lines have a lot of influencers chasing brands for sponsorship deals. Alternatively, some industries have a hard time finding the right influencers. As with so many other things in business, supply and demand helps dictate influencer marketing cost.
Are they highly effective?
Not all influencers are created equal. Some have larger followings, while others have an incredibly high engagement rate. When you’re thinking about what to pay an influencer, you’ll want to keep this in mind. If you aren’t willing to pay more for a better influencer, your competition probably is. Likewise, don’t overpay for someone who is subpar.
Where do they work?
Some platforms and forums are more costly than others. For instance, Instagram is the channel of choice for so many influencers. This contributes to a larger supply of influence, but it’s also a very effective channel. Chances are you’ll pay more for YouTube or a blog due to the amount of work involved. Then again, very famous influencers still rake in the big bucks on Instagram. There are multiple factors involved when pricing an influencer’s services.
Costs Per Platform
With all these factors at play, it’s easy to see why influencer marketing cost can seem so hard to determine. Fortunately, there are some ranges available to let you get an idea how much to pay
Because Instagram is so popular, the Instagram influencer marketing cost is more defined than some other platforms. Generally speaking, experts recommend that you use the starting point of $10 per 1,000 subscribers. This is especially useful for the middle-of-the-road influencers with average to slightly better engagement rates. However, it won’t necessarily work for the most in-demand influencers, or in industries where fewer influencers are available.
YouTube
For YouTube influencer marketing, expect to shell out about twice the amount per piece of content as you would for Instagram. This isn’t surprising, given the amount of work required to produce even fairly basic YouTube videos. As a result, the rate hovers around $20 per 1,000 subscribers. Influencers who make sophisticated content may charge you even more.
Facebook influencer marketing is the most expensive, at $25 per thousand followers. Perhaps this is because Facebook is the oldest major social network used extensively for influencer marketing. Or, it could be that people prefer to use it primarily for keeping track of friends and family.
Ideas to Help You Reduce Your Influencer Marketing Costs
All of the above influencer marketing statistics show that influencer marketing can be expensive. Fortunately, there are ways to keep the price down if you’re willing to be creative.
Skip the agencies
Depending on how much staff you have, assigning someone to do most of the influencer discovery and management can be more cost effective. Agencies tack a markup onto everything, and having an intermediary also weakens the relationship between you and the influencer.
Remember your employees
Once shunned by human resources, employee advocacy is a powerful, and cheap, tool. Let your employees talk about what an awesome employer you are or encourage them to tout the cool stuff you’re selling. Maybe all they need is some giveaways, or even just permission to speak out.
Avoid the superstars
Successful influencer marketing doesn’t require using the superstar influencer. Many smaller level influencers are very effective at their job at a lower price. By carefully vetting the people you hope to use as influencers, you may be able to find someone who is perfect for your brand without the celebrity price tag.
Measuring the ROI of Influencer Marketing Cost
The way in which you measure ROI for influencer marketing depends heavily on the goals set for the campaign. For instance, if your goal is brand awareness then the number of impressions or amount of engagement with the post will tell you a lot. On the other hand, for a direct sales result consider using a discount code or other promotion. This way, you can attribute at least a large percentage of the resulting sales to the chosen influencer. At the end of the day, your ROI is the extent to which campaign goals are met.
Summary
With so many variables, it’s hard to properly track influencer marketing cost. Fortunately, with this guide you can see the ways in which these variables affect pricing. I hope that this has been helpful to you as you plan the next campaign.
Photo by NeONBRAND on Unsplash
influencing marketing is one of the besy way for quick marketing. but its a little costly too. BTW, nice information