How much does influencer marketing cost?
It’s not easy to evaluate the cost of an influencer marketing campaign. This is because influencer rates depend on several factors. Here are the things you need to know to estimate the price of an influencer-led marketing campaign:
- Level of influence (reach and engagement)
- Industry or product type
- Involvement and creative brief
- Social media platform
- Payment method
First thing’s first, we thought it necessary to answer this question:
Should you pay influencers, and how?
Yes, with influencer marketing becoming an integral part of almost every marketing strategy, you need to remunerate influencers for a partnership!
Influencers are professionals whose activity consists of entertaining their audience, growing a digital community of followers. When asking for their services for a campaign and determining its conditions, you must enter into a contractual relationship with them.
The advantage of an influencer-led campaign is that it can be considered as a contemporary advert for your product. Influencers are their own ‘media’, and touch thousands, if not millions, of followers– and so potential consumers. Therefore, if it is their professional activity, they must be compensated for doing their job.
By the way, influencers must disclose that they are working with a brand by defining a campaign publication as a sponsored post (using hashtags like #sponsored and #ad), as mandated by the FTC laws on transparency.
Nonetheless, remuneration can take several forms.
Depending on the influencer’s reach or discussed theme, the type of remuneration can be diverse:
- One or several free products (beauty products, the latest video game or phone…)
- Tickets for a free trip or participation at an event
- Financial compensation
- Or others!
In general, if the remuneration isn’t adapted, the influencer will be less likely to respect the conditions of the partnership. You therefore won’t be assured that the influencer’s publication featuring your product will match your expectations.
What factors impact the influencer rates?
1) Level of influence (reach and engagement)
The price bracket is above all determined by the strength of the influencer on social media: the number of followers, number of views, and engagement rate. All of these factors determine their overall influence.
The engagement rate of an influencer’s audience is the relation between the number of likes, comments, and shares over total views or followers and can be expressed as a percentage. In other words, it can be considered as the audience’s activity report.
The price of an influencer is thus always calculated in terms of their audience.
To give a very basic estimate WebFX, suggests that influencer marketing costs can be found by taking off two zeros to the number of followers. Therefore, an Instagram post from an influencer with 10k followers would cost $100.
However, Influence4you is careful about taking into account engagement rates to counteract the possibility of an influencer buying their followers. To identify fake accounts and detect fake likes, Influence4you offers clients a fake follower checker tool to indicate the percentage of real followers versus fake followers in the influencer’s audience.
This is why micro-influencers, smaller accounts deemed ‘more authentic’, can offer better marketing ROI even with fewer followers due to higher engagement rates. The extent to which an audience is active and engaged on an account determines audience quality and is, therefore, part of a more accurate calculation.
WebFX also publishes its pricing guide in terms of views, starting at $1,800 per month for 100k to 200k page views. Price can therefore be based on the results of a campaign. You can hence determine the final amount on ROI, like a pay-per-click, acquisition, or views.
Ultimately, reach is undeniably important, but engagement is just as crucial. Keep in mind that the average engagement rate for influencers on Instagram on sponsored posts (according to an Influence4you study) lies at 2.5%.
2) Industry or product type
The category of the product presented by the influencer, or the sector of the brand they represent, also defines the price charged by the influencer. For example, the rates in the very competitive beauty industry are double that of an influencer campaign in the gaming industry, which is dominated by 5 or 6 trusted video game publishers. More low-key book influencers, for example, should be happy to be gifted a book to run a post for a brand. In the luxury vertical though, it’s a whole different story. More likely, you’ll invite your chosen influencer on an exotic photoshoot abroad, gift them products and pay a compensation fee for the partnership.
3) Involvement and creative brief
Thirdly, you’ll need to figure out what you want the influencer to do exactly. How much effort will the influencer need to put into this publication? Depending on the creative brief and the client’s demand for the partnership, prices will vary.
This also means the format required will have different associated costs. Stories are the cheapest, due to their short-lived nature, which will limit overall reach. Videos are priced at around 50% more than a post. A video will demand more effort to create, presumably requiring the influencer to feature themselves with the product, as well as being a longer format. However, video is also proven to be the format with the most engagement due to its shareable nature, and gives more engagement metrics, meaning it will yield higher results in terms of ROI.
Geography is another important variable affecting influencer marketing rates. The cost of investing in an influencer marketing campaign depends primarily on the market price. This can be different depending on the country. Both the cost of living and the intensity of brand competition in different sectors vary. For example, and perhaps unsurprisingly, the price for a campaign led by a Mexico-based influencer will be lower than one based in the USA.
However, the market’s maturity in terms of its adoption of influencer marketing practices also comes into play. How much do people in different countries follow influencers, and how do they respond to influencer content? The availability of creators per region will also determine the costs of partnerships, as well as cultural factors like the likelihood of influencers accepting to run commercial content on their accounts.
For US-based influencers, for instance, these commercial practices are still more widely accepted than in the UK due to higher market maturity and the number of influencers available. However, the conversion rate for audience clicking on links is higher in the UK than in the US, according to a study by Imagency. This is therefore something to keep in mind if you’re running a campaign in several countries.
5) Social media platform
Finally, where the campaign will be posted, or chosen platform(s), will dictate price variations. The cost of leveraging different platforms vary with the platform’s own popularity, and the practices of audiences on these platforms. Instagram is by far today’s number 1 platform for influencer marketing. In 2019, the value of Instagram influencer marketing had already been estimated to be worth over $1.7 billion by Mediakix. This is because more than 80% of its 1B+ active users follow at least one brand on the social network.
This makes average costs for a sponsored post on Instagram higher than other platforms. It is followed by YouTube. The new kid on the block, TikTok, is definitely one to watch for influencer marketing growth. Actually, it is posited to have overtaken Twitter and Facebook already!
According to Izea, average costs for a Twitter status in 2019 were at $422 and roughly the same for Facebook, with a (wordier) blog post on Facebook at $1,442. On Instagram, the average cost for a photo posted was $1,643 and a whopping $6,700 for a YouTube video. (Keep in mind that higher prices on YouTube are due to the necessity of the video format. In fact, average prices have gone down compared to the year 2017.) On Snapchat or Instagram story, Influence4you determines the cost of a story resulting in 10k views averages $600.
On TikTok, codes are still in the making. Its algorithm is less predictable and the popularity of influencers still mutable. This means prices are still variable. Nonetheless, Influencer Marketing Hub created an influencer engagement and earnings calculators; according to it, the cost of a post by top TikToker Charli d’Amelio is $56-94k.
Influence4you’s platform enables you to manage your marketing campaigns independently, suggesting influencer costs according to their social media platform.
These rates give you an idea of price variations depending on the platform on which a post is posted by an influencer, but they remain averages. You’ll need to adapt prices according to your industry and creative brief.
6) Payment method
As mentioned previously, it will be possible to compensate some influencers by simply gifting them items. This is usually the case for nano- or micro-influencers. However, with social influencer freebies tapping into a billion-dollar industry, it is always important to check with your tax authorities, even though influencer tax laws are still lacking in clear guidance in most countries.
That’s why more settled influencers often operate from within an agency. If represented by an agency, this means you will also have to add agency fees to the campaign cost.
Paying influencers can get complex for companies, and that’s why Influence4you also takes care of ensuring influencers are correctly paid. When it comes to remuneration, Influencer4you helps you to:
- easily remunerate influencers
- edit your invoice in the correct format
- generate a global report of your campaign
And that’s all of it! Though it can be hard to calculate the exact ROI of influencer campaigns, it’s definitely worth it. In fact, influencer marketing campaigns cost 2 to 10 times less than paid ad posts on Instagram or YouTube. And yet, they have the same engagement rate.
Now it’s up to you to make it happen!
To take it further, take a look at our study on influencer’s engagement rates, or how to choose the right influencer.
For more information, visit our website here: Influence4You