Do you know how much an influencer marketing campaign costs? Or how much you should be paying an influencer?
If you’re not quite sure, don’t be worried. I’m like you. I didn’t know much before I did the research for this blog post.
And in truth, there’s no exact science to figuring out how much you should pay influencers, as one social media executive explained to Digiday: “We have no idea what to pay them. That’s the problem.”
While there isn’t a clearcut answer to this question, there are some guidelines used by marketers, agencies, and influencers themselves. There are even tools to help you calculate how much to pay specific influencers.
We are going to share all these in this blog post. If you are interested, let’s dive in.
6 factors that affect the cost of influencer marketing
Before we dive into the guidelines used by marketers, agencies, and influencers, I would love to briefly cover the factors that affect the cost of each influencer marketing campaign.
This is because the guidelines below might not always apply to your influencer marketing campaign. Understanding these factors allows you to adjust your rates accordingly so that you can find a price that works for both you and the influencer.
1. Social media platform
The social media platform chosen for the campaign is one of the key factors that influence the cost. As you’ll read below, the cost of influencer marketing varies across channels. It’s as though each social media platform has its own “market” rate.
Instagram tends to be the top choice for social media influencer marketing, followed by YouTube and Snapchat. Generally, influencer marketing is less common on Facebook and Twitter.
musical.ly, a less well-known yet massive social media platform, is becoming more popular for influencer marketing. Companies like Coca-Cola have partnered with influencers on musical.ly for their campaigns.
Traditionally, brands look at the potential reach of an advertising channel to decide how much to pay for an advertisement. Hence, the number of followers of an influencer became a consideration when deciding how much to pay an influencer. The idea is that the more followers an influencer has, the more people the brand could reach. So influencers with a larger following will usually charge more.
According to Digiday’s state of influencer marketing report, ‘The number of followers is still the gold standard for a social star’s “influence”’.
But as it’s possible for people to buy fake followers to inflate their follower count, brands are also looking at other metrics to price their influencer marketing campaign.
Engagement is one of the alternative metrics that brands have been using. While it’s easy to buy fake followers, it’s harder to buy fake engagement (though, it’s not impossible). When influencers can get their followers to engage with their social media posts, the influencer marketing campaign becomes more effective for the brand as those followers are essentially engaging with the brand.
Furthermore, social media algorithms are prioritizing engagement. The more positive engagement a post gets, the more people will see the post. Influencers who have higher engagement rate are more likely to have a greater reach.
Hence, the higher the engagement rate the influencer gets, the more expensive the campaign will be.
The product you’re selling (or the industry you’re in) can also affect the cost of your influencer marketing campaign. Hiring an influencer to promote a sports car will generally cost more than hiring an influencer to promote a fruit juice.
A good rule-of-thumb is that the more expensive your product is, the more expensive the campaign will be.
5. Direct partnership or through an agency
Chelsea Naftelberg, associate director of content and partnerships for the social media agency, Attention, shared with Digiday that “if you are working with a talent agent instead of directly with an influencer, expect to pay a little more to take their fee into account.”