Influencer marketing broadens the audience for your company and appeals to a generation sick of overdone and unreliable advertising. Consumers are more likely to believe recommendations from influencers (61%) than from a brand’s social media account (38%). Influencer Pricing.
Even if you’re familiar with influencer marketing and branded content, everyone has an opinion on influencer pricing. Determining the ideal influencer for your company, the channels you want them to broadcast on, and how much you should pay them can be challenging because there isn’t a common way to quantify performance in influencer marketing.
Factors to consider before partnering with influencers
Think carefully about your strategy and goals before contacting influencers.
What are your goals?
Create a spreadsheet or planning document with your goals listed and your key performance indicators (KPI) listed to determine the effectiveness of your cooperation. The KPIs listed below are an excellent place to start:
- Increase sales
- Increase followers
- Increase brand awareness
An organization will pay a third party to recommend goods or services to its audience through an affiliate marketing sales strategy. In exchange, the third party gets a commission for referring customers. Because it is low-risk and a commission is only paid once things are purchased, the majority of brands run affiliate programs.
Make careful to set up and track your affiliate marketing program correctly when you do so. To assist merchants in creating, managing, and tracking affiliate sales, Shopify Collabs was created.
Although you probably won’t need to worry about production arrangements, it’s still a good idea to understand what they entail. Depending on your company and relationship, you might need to take into account:
- What plans might need to be made if your influencers are anticipated to travel?
- Do they require studio rental?
- What kind of tools do they require to create content?
Timeline for content production
Be sure to account for the time it will take the influencer to create the necessary material. If you request several postings within a short period, influencers who are in high demand and have other obligations might be reluctant to accept your offer. You should budget a few extra weeks for discussions and final agreements to accommodate for that.
Instagram influencer pricing
A typical Instagram post in 2021 cost $1170, and an Instagram story cost $906 on average. Even if these projections are average influences, it is useful to forecast your budget.
Influencer compensation should be determined by follower and engagement metrics. Talent and access to a certain audience are two more elements that can affect a charge.
Influencers typically have fee sheets for the content they are willing to create. When simulating and forecasting results, use those rates as the default values. The influencers may not even need to negotiate a collaboration because they are aware of their following and reach. The typical Instagram influencer rate sheet depending on reach is as follows, according to InfluencerMarketingHub:
- Nano influencers (1000 – 10,000 followers): $10 – $100 per post
- Micro influencers (10,000 – 50,000 followers): $100 – $500 per post
- Mid-tier influencers (50,000 – 500,000 followers): $500 – $5,000 per post
- Macro influencers (500,000 – 1,000,000 followers): $5000 – $10,000 per post
- Mega influencers (1,000,000+ followers): $10,000+ per post
The industry average is $100 for every 10,000 followers as a starting point. The following formulas can serve as general guidelines:
The overall rate is $100 divided by the number of postings and other factors (such as costs associated with the shoot, usage, and exclusivity).
Alternately, you can calculate 4% of an influencer’s following and add the number of posts and other factors to reach your final estimate of their base rate.
TikTok influencer pricing
A sponsored TikTok typically costs $3,514. That ranks second highest after YouTube, where the average video price is $4,491. Even if a TikTok costs three times as much as an Instagram post, developing video content takes more time than doing so.
Using a TikTok influencer is your best option if you have a budget and want to address a younger audience. TikTok is expected to exceed Instagram’s 37.3 million Gen Z users this year, reaching 41.4 million. Additionally, TikTok’s algorithm enables a higher level of involvement, which increases your likelihood of going viral considerably more than on other platforms.
TikTok is a lot more recent service than Instagram, so the prices range even more. IZEA reports that the following represents the typical cost per TikTok based on influencer tier:
- Nano influencers (1000 – 10,000 followers): $800 per post
- Micro influencers (10,000 – 50,000 followers): $1,500 per post
- Mid-tier influencers (50,000 – 500,000 followers): $3,000 per post
- Macro influencers (500,000 – 1,000,000 followers): $5,000 per post
- Mega influencers (1,000,000+ followers): $7,000+ per post
David Gaylord uses the following technique to determine influencer value for his Bushbalm brand, which provides products to treat dark spots, razor burn, and other frequently disregarded skin irritations naturally:
Average views, likes, and comments from an influencer’s last five pieces of content divided by the cost of the material are known as their cost per thousand (CPM).
Factors that affect influencer pricing
Beyond the size of the audience and the engagement rate, other elements determine influencer pricing.
This will likely affect the influencer’s rate if you wish to own the rights to the content your influencer creates to use in commercials or for future repurposing.
You’ll probably pay a price for including an exclusivity agreement that forbids your influencer from working with your rivals. Consider this when you negotiate and plan your budget because it can prevent them from accepting lucrative offers.
Many influencers are managed or represented by agencies, who frequently charge extra fees.
Influencer fees will be directly impacted by campaign length. A one-time activation, such as holding a competition or promotion, will be less expensive than a lengthy endorsement agreement. When choosing your budget, creating a risk model that details the best-case scenario, specifically for long-term relationships, can be useful.
You might ask your influencer to produce content for two or more channels if you plan to use more than one platform. Although the post combo is more expensive, it extends the campaign’s reach by appealing to several audiences.
It’s not unusual for influencers to already be bound by contracts. A rush fee could be charged, depending on how much time is granted to an influencer for their output.
Link in bio
If your objective is to increase traffic, placing a link in your bio is a fantastic idea since you cannot include one in your TikTok or Instagram caption. This extra expense is probably necessary.
Key metrics when pricing influencers
We’ve talked about things to think about when working with influencers and what influences influencer pricing. However, it’s equally crucial to take these measures into account when forecasting financial results. The following list of crucial KPIs should be present in your financial model:
Sponsored post %
Lower engagement for sponsored posts is not uncommon, especially if influencers post a lot of them. Make sure to perform your study before forecasting impact because this could significantly change your forecasts.
Your campaign stats may also be influenced by demographics. For instance, if your influencer has 30,000 followers, a 5% engagement rate, and 50% of their audience resides in the US (and your store only ships to the US), your effective model may forecast about eight qualified buyers under the assumption that engagement leads to a 1% purchase rate.
Follower Growth %
You can obtain a lot more views for your ads if your influencer’s reach is expanding quickly. Influencers can use this information as a planning tool because they frequently are unaware of how quickly their following is expanding in comparison to others.
When considering working with a potential influencer, always check for false engagement and followers. Watch out for these three warning signals of bot activity:
- Sporadic follower growth
- Inconsistent engagement rates
- Low-quality engagement
Influencer marketing ROI
One of the greatest ways to figure out if you’re paying the proper amount for an influencer is to measure your influencer marketing return on investment (ROI). Utilize the following calculation to determine ROI:
(Total gain on investment – the cost of investment) ÷ cost of investment
For example, if you invest $2,000 in your influencer marketing campaign and get back $9,000, your ROI is 350%.
Influencer rate sheets and results
Although being able to calculate your ROI is a solid indication of whether a collaboration with an influencer is worthwhile, you must first hire an influencer before you can estimate your ROI.
Request a copy of the influencer’s rate sheet. This will contain their pay information and maybe also performance data.
Types of influencer partnerships
Influencers typically have a press kit that lists the rates and kinds of relationships that are offered. Continue reading to discover the many forms of influencer collaborations and how to pick the one that will help you achieve your goals.
As was already said, affiliate marketing is a type of sales strategy where a company will pay a celebrity or other influential person to advertise their goods or services in return for a commission on any subsequent purchases. Brands favor affiliate marketing because there are no up-front expenses. The range of commission rates is 5% to 50%, depending on the influencer.
An influencer who regularly shares material about your company and products is known as a brand ambassador. This is a long-term collaboration, so it’s critical that you pick your brand ambassador carefully because they will be intimately linked with your brand.
A picture or a video, together with a caption, will typically be included in a sponsored post. The influencer typically creates the material, and occasionally the good or service is also highlighted in it.
A positive mention on an influencer’s platform is why some brands provide products to them. With nano and micro influencers, you might be able to set up giving in exchange for a shoutout, but this strategy works less well with larger producers.
Giveaways and competitions are excellent strategies to increase followers and brand recognition. Multiple influencers may be involved in these transient alliances.
The associated expenses, prize expenses, and the anticipated return should all be listed in your giveaway budget. Since giveaways typically have a positive ROI, you should try to make money off of your campaign. If you’re trying to sell a product, your influencer budget and reward expenditures ought to be lower than the revenue you anticipate from sales. Your prize and influencer costs should be lower than the returned media value if you are running an awareness campaign.
Finding an industry similar to benchmark against and determining how many impressions, followers, engagements, or other characteristics you are evaluating are two ways to forecast media value.
Similar to a sponsored post, a caption mention typically lacks a picture. They can be used for any call to action and are less expensive because they take less time and money to produce.
An influencer’s creation of content for a brand’s account for a set period is known as a platform takeover. The most popular platforms for takeovers are Snapchat, TikTok, and Instagram. It works best for growing your audience and reaching new markets. As a result, you might wish to employ a formula that multiplies the various post types included in the takeover, the influencer’s current hourly fee, and the possible amount of new followers from the relationship.
Form long-term alliances with influencers who are compatible with your company and are within your price range. Influencer marketing is effective because social proof and word-of-mouth recommendations are the most potent tools available. Unsure of how to approach influencers? Shopify Collabs enables vendors to market their goods to the audience of creators by sending gifts and affiliate links to influencers.
Influencer Pricing FAQ
Before bringing up a project and price with a potential influencer, be aware of your company model and what success looks like.
Treat the formation of a partnership as a sales opportunity.
Choose the payment method that best suits you—whether it’s an affiliate fee, a fixed payment, a gift, an hourly rate, a licensing agreement, or a mix of the aforementioned.
Seek for an influencer that has worked on a campaign of such nature and request to see their rate sheet.
You’ll establish enduring bonds with the creators you collaborate with. Building trust will result in more natural connections and friendships within the influencer network. Your influencers will recommend you to other artists if you keep your relationships top of mind.
All of your planning should be based on a numerical model. It’s better to have a benchmark, even if you’re going to be making assumptions.