Establishing the right price for an influencer can be difficult.
With unique characteristics and factors coming into play.
This doesn’t mean you should pass on the 5X ROI that influencer marketing can bring you.
We created this guide based on our experience to stir you in the right direction when it comes to influencer prices.
But before we start going into money talks let’s clarify some of the basics:
Is it worth paying influencers?
Definitely. There will always be influencers available to work for free but these are often starting influencers or ones with minimal traction.
It may be beneficial to create ties with emerging influencers in your area from the beginning but is also important to get access to more seasoned faces.
They are more than likely to expect compensation for their work.
In exchange, they will provide your brand with an extra boost of relatability, social proof, and, conversions.
How do I hire and pay influencers?
Hiring an influencer can be as simple as sliding in their DMs, even if we suggest taking a more professional approach.
Once you establish a line of communication you want to lay out what you are expecting from the collaboration and what are your goals.
Work out the details and sign a contract to put all the expectations and requirements in a written, legally binding form.
Influencer payment is often a very simple process that can be done by money transfer, but in some cases, especially if you are executing a campaign in a foreign country, you may have to adapt to local preferences about payments.
You can prevent many of these problems by outsourcing influencer management to a specialized agency.
What affects the price of an influencer partnership?
Influencers do not have a fixed price and due to their unique traits, the cost of a partnership can vary wildly.
There are many criteria to take into account when deciding what is the price worth of an influencer collaboration.
Influencers who create within small, in-demand niches can charge higher rates.
In contrast, large popular content categories have lower rates due to the high supply of content that can be sponsored.
Audience size is often the first characteristic that is looked at by marketing professionals.
A larger audience means that more eyeballs are going to see the content but also translates into fewer people (proportionally) engaging with it.
Country of the Creator & the Audience
Creators from countries with a higher cost of living have higher costs for activation.
The nationality of the audience is also important since many products are tailored to specific countries.
The quality of the content on the channel sponsored reflects the brand image and the cost of production driving the price higher.
Engagement rate is a measure of an influencer’s ability to drive audience actions.
Higher levels of engagement are a strong indicator that an influencer can drive conversions.
When agencies are involved more parties need to be paid.
Agencies’ participation is often also connected to a higher quality of content and easier communication between parties.
It is common for brands to ask influencers to not promote their competitors for some time after sponsored content.
Exclusivity clauses do not have a super pronounced effect but they are worth keeping in mind as they may come up during negotiation.
If you want to use the sponsored content for your marketing material or on your channels you may have to add a little extra to the deal.
Time of the Year
There’s a well-observed phenomenon that ad spending is higher towards the end of the year.
And then goes through an early year slump while budgets are decided upon and brands recover from their Christmas spending spree.
Most influencers operate on multiple platforms and is often possible to negotiate a package that includes multiple platforms.
These deals are a value add because the multiple touchpoints reinforce your brand’s image and improve conversion rates, at a lower cost.
If you can guarantee an influencer works over a long period in the form of multiple collaborations, you will be able to obtain a lowered CPM.
With more and more people turning to create content online some of them are already famous from other careers.
Collaborating with them can be beneficial since they are often more known to a wider audience than online-only personalities but they come with a higher cost of activation.
Types of Deals
But not all deals are the same.
To make your life simpler, here are the most common kinds of payment deals when it comes to hiring an influencer.
A flat fee is paid in exchange for one or more posts on the creator’s platform.
This is the simplest form of payment as it requires no post-publish calculations.
However, it can be difficult to judge a fair price for a piece of content.
The brand pays the creator a percentage of profit for every one of its audience who purchases through them.
It’s generally disliked by creators since it does not guarantee any return for them.
Hybrid models are common: the brand can guarantee a minimum payment to creators while also a percent of sales as a bonus to the creator.
Products and services can be offered in exchange for a promotion.
This is often the case with smaller creators.
A hybrid approach is also common: providing free products along with flat-rate payments.
Influencer Seeding Marketing Campaigns
In a seeding campaign influencers are sent a sample of the product without any kind of agreement but just for the possibility of them organically creating content around it.
Typically deals will be structured around CPM with a fixed price per thousand views.
Paid out after a pre-agreed amount of time (often 30 days) the content is published.
This has the benefit of incentivizing good work from the creator while reducing the brand’s potential for overspending.
What is CPM
CPM, or Cost per Mille (Latin for one thousand) is a commonly used metric in influencer marketing and calculates the cost of a thousand interactions.
Often is agreed on a certain CPM before the campaign and after a certain time the interaction is counted and the payment is made based on the CPM rate agreed upon.
CPM by real views
With this model, the CPM is agreed upon in advance, and after, generally a month, the views are counted and the payment is made.
Ex. Jim agrees to sponsor a new drink for a $15 CPM. His video after 30 days has collected 100K views. The drink company is going to pay Jim $1,500 ($15 CPM X 100 thousand views).
CPM by average views
In this case, the final payout is agreed upon in advance on the base of the average amount of views the content receives.
Ex. Sal’s 20 most recent videos received between 80K and 120K views. A sponsor offers her a $20 CPM with 100K average views. Sal will receive $2,000 no matter the performance.
CPM by expected views
Expected views are a great tool when one recent video has over or underperformed sensibly.
Shaving off the outliers is going to be more representative of the actual results.
Type of Influencer Partnerships
Influencers are a versatile medium and they can be integrated into your marketing plan with many different types of content.
Here you can find some examples of the most common ones.
Keep your mind open to experiments with new and different ways that may benefit your goals.
Most common and simple promotion from an influencer.
A post showcasing your product and accompanied by a caption explaining the benefits/ their story with the product.
Similar to dedicated posts but for YouTube influencers.
While videos are about topics the audience finds interesting or entertaining you can buy a 60 to 90-second slot in the video with the creator introducing your product to the audience.
The influencer entices his audience to engage with your brand or your social media by offering the possibility to win one of your products.
Allow an influencer to publish from your brand’s social media and be in charge of them for a while. This is going to give more visibility to your channels and allow a different less business approach to social media.
Make influencers part of your team incentivising them to promote your brand with a part of the revenue.
Brand ambassadors are people with large visibility designated to raise awareness of a brand or product.
Instead of a collaboration limited to a specified amount of posts or content pieces brand ambassadors represent the brand, often participating in company events and doubling as spokespersons.
The Right Price for an Influencer on each Platform
Influencers are active and available on many different social media platforms.
Each platform has its characteristics and different kinds of content that are available.
Here we will give you an overview of how much sponsored content costs in various forms and on various platforms in our experience.
The right price for an influencer on YouTube
YouTube is the largest video-sharing platform.
It has over 2 billion monthly active users and hosts more content than anyone could see in their lifetime.
It is also a hub for content of any type allowing marketers to tap into any kind of community they are interested in.
Integration is the most common partnership with YouTube content creators.
Your product will be promoted in a 60 to 90-second segment inside a larger video.
Is beneficial if the video and the product can be easily connected.
In our experience, integrations in a tier 1 country can cost a CPM between $15 and $25. Larger YouTubers are relatively cheaper but often have a less engaged audience.
The previously listed factors come into play to influence the final number.
Dedicated Video Price
Due to the cost and time investment of creators to script and film an entire video related to your product, dedicated videos are more expensive compared to integrations.
We estimate that you can expect the CPM to be double from an integration at minimum.
Therefore, in a tier 1 country, you can face costs of $30 and above for each thousand views.
Once again the final cost will be affected by many different variables especially technical costs related to the video concept.
The right price for an influencer on Instagram
Instagram allows its users to share photos and short videos.
Is the main platform for many influencers and one of the most used channels by marketers to promote their products.
Sponsored Post Price
A sponsored post cost can vary wildly due to many factors, in particular, the size of the influencer following.
Nano and micro-influencers are relatively cheap and a single post can be agreed upon with a budget between $100 and $1000.
When it comes to larger influence the cost can skyrocket significantly into the tens of thousands.
For celebrities, the price inflates even more, and $1+ Million deals aren’t unheard of.
Sponsored Story Price
Instagram stories are slightly cheaper than posts.
By disappearing in 24 hours they are only available for a small amount of time but they have higher levels of interactions and can directly lead to your shop.
The right price for an influencer on TikTok
Since its emergence, TikTok has consistently shown how its algorithm is extremely powerful at matching content with viewers.
Thanks to this characteristic the potential reach of any TikTok influencer is much larger than their followers list and each piece of content can be expected to be served to an interested audience.
Sponsored Video Cost
As usual, the following size is the most important aspect to determine the cost of a sponsored video.
Micro and nano influencers on TikTok have average prices from $20 to $500 per post.
Larger influencers can require compensation of up to a few thousand dollars, with celebrities once again being able to cash in the most.
How do I know the right price for the influencer I want?
Many influencers, especially if they are not new to sponsorships, have prepared a press kit that will outline what are their prices and which channels they are available for sponsorship. Otherwise, you may have to directly pitch to them your plan and ask for their price.
Are influencer marketing agencies worth it?
Influencer marketing agencies are going to deal with influencers and ensure your campaigns run smoothly, for a fee.
Influencer marketing agencies can be game changers for many companies since they will relieve the marketing teams from having to deal with each influencer individually and will instead provide a single point of contact.
In international or cross-country campaigns influencer marketing agencies are often better equipped to deal with different languages and cultures.
Also, influencer marketing agencies have the tools and expertise to evaluate the potential and effectiveness of each influencer before launching the campaign, translating into better results.
Therefore influencer marketing agencies are a powerful tool that many marketers should keep in consideration when planning a campaign.
How much does it cost to hire an influencer agency?
The cost of an influencer marketing agency may vary drastically by the scope and size of a campaign.
Commonly the cost is between 15% to 30% of the overall campaign budget.
Generally, agencies prepare a pre-campaign brief in which they illustrate the plan for the campaign and the expected results.his document also includes a breakdown of the costs that take into consideration the fees for the agency services.
In some cases, agencies may prefer a fixed fee or will want a different type of deal.
What should I look for in an influencer marketing agency?
There are many influencer marketing agencies available on the market and finding the right one for your goals can be a long process.
That’s why we have an entire guide on how to choose the right influencer marketing agency.
But most importantly you should be looking at the previous works the agency has done, the ability of the agency to operate in the geography your campaign wants to target, and their communication and reporting abilities.
What to look for when pricing an influencer
As we have seen many factors come into play when is time to price an influencer collaboration. But is also important to keep in mind other aspects independent from the influencer that help marketers to decide whether or not to proceed with the deal.
Influencer marketing is projected to give a 5:1 ROI on average.
That means that for every dollar spent $5 should come back in.
Not all deals will bring in $5 or more for each $1 spent but this is a good measure to identify which influencers have good potential and who is underperforming.
The size of the following is the main aspect taken into consideration when calculating an influencer price.
But it is important to know that is not the only thing that matters and it could be inflated.
Looking at engagement, likes, and sentiment analysis around an influencer’s content is going to give a better understanding of what is going on with an influencer and what is the potential of a collaboration.