How Much Should You Really Be Paying Influencers?
As influencer marketing gains traction among brands, influencers are quickly catching onto the value they hold within the branded partnership and the impact of their sponsored endorsement. A recent trend within influencer marketing across several social media channels is that influencers have started requesting monetary compensation in addition to free product, per sponsored post they are partnering with brands on.
Meaning, if you’re partnering with an influencer on two Instagram posts, two Instagram stories, and one blog post, the influencer you are partnering with will likely pass along their rates for an endorsement on each social platform and the total cost of the sponsored partnership. Luckily, most influencers are open to discussing the terms of the partnership and are willing to negotiate their rates depending on the popularity of the brand, the cost of the product the brand is offering, and their need for the product. Regardless, influencers are getting more aggressive with their “ask” and are pushing brands to pay them in addition to sending free product.
So, how should brands really be paying influencers? Unfortunately, the answer isn’t as simple as paying every influencer a set amount, unless, of course, the brand’s budget is large enough to do so. The pricing of each social media influencer partnership should be evaluated on a case-by-case basis based on the value each influencer brings to the partnership. Here are a few guidelines on how you should determine the value of each influencer partnership and how much you should pay influencers, if at all.
Upon ironing out the details of a sponsored partnership, if an influencer requests ‘x’ amount of money in addition to requesting free product, it’s a best practice to ask that influencer to send you their media kit. A media kit will tell you two things: whether that influencer has a portfolio of the content they’ve created—and if so, how good their content is—and whether they’ve worked with brands on sponsored partnerships before, because let’s face it, most influencers show off the big-name brands they’ve partnered with in the past.
It will also provide insight into the influencer’s work and if they’re worth the amount they say they are. Now, this doesn’t mean that influencers who throw a Word document together with a few images and random metrics are worth the big bucks. In fact, most brands don’t even look at the metrics influencers include within their media kits. Why? Because there’s no proof. Brands should be able to identify the influencer’s target audience and average engagement rate by diving into their profile, rather than having the influencer, who may have altered the metrics to their advantage, present these metrics to them.
A media kit should serve as a portfolio of the influencer’s work, and you’ll be able to easily identify which influencers are sending you their media kit to showcase their portfolio and make a case for why they’re worth ‘x’ amount, and those who only put a media kit together solely because it’s a trend within the influencer space.
If an influencer presents a buttoned-up media kit, with a portfolio of high-resolution photography, examples of sponsored content and a list of brands they’ve previously worked with, they’re more likely to convince the brand that they’re worth paying, especially if the brand’s goal within their influencer marketing strategy is to obtain high-quality imagery.
Partnership Price: Minimum of $200 for 1 Instagram post + 1 Instagram Story
*Must give copyrights of their images to the brand*
Pro Tip: if an influencer tells you they’re currently updating their media kit and they aren’t able to send it to you, they probably don’t have one and they’re throwing prices out there based on the trend of influencer partnerships rather than the amount they have been compensated from other brands.
As engagement is a primary component of any influencer marketing campaign, it’s important to evaluate each influencer’s follower-to-engagement ratio on their account prior to negotiating any form of compensation. As a general rule of thumb, our team scales the strength of each influencer’s engagement by taking 7% of their follower count to determine the minimum amount of engagement their content should be receiving.
For influencers that have hundreds of thousands of followers, with minimal engagement—within the hundreds range—on each of their posts, they have less to leverage within the partnership. Although their account may appear to be reaching a large audience, only a handful of those followers are engaging with the content they share, therefore, the brand should only pay the influencer for the people they are actually reaching. On the contrary, for influencers who have tens of thousands of followers, with strong engagement—within the thousands range—on each of their posts, the brand is more likely to offer that influencer a higher priced product or offer them money in addition to free product, as their content is reaching a larger audience and is generating more engagement.
Partnership Price: $200-$300 for 2 Instagram posts + 2 Instagram stories
Pro Tip: if an influencer has less than 10,000 followers, the brand should negotiate only sending free product in exchange for post rather than offering them monetary compensation. The reason for this is because influencers with less than 10,000 followers don’t gain insights into the performance of their posts and they aren’t able to include a link within their Instagram story. This is less beneficial for the brand because they aren’t able to view the impression metrics from the influencers post or monitor the traffic that influencer drove back to their website.
One Post Partnership vs. Campaign-Based Partnership
Brands who are interested in building campaign-based partnerships within their influencer network, meaning partnering with each influencer on multiple posts across multiple social platforms, are most likely going to need to compensate each influencer in addition to sending free product. The reason for this? It’s more beneficial for the brand to partner with influencers on multiple posts rather than a one-off post.
Multiple “touches” increases the likelihood that the influencer’s content to appear more authentic and the repetition of the brand exposure will familiarize the influencer’s audience with the brand and its products and services. It also gives the influencer the opportunity to communicate the brand’s key messaging and carry out conversations with their followers to discuss his or her experience with the products. Although one-off posts may be a good way for smaller brands to introduce their company to a larger audience of consumers, building campaign-based partnerships helps generate more brand exposure and familiarize those consumers with the brand.
Partnership Price: $300-$500 for a minimum of 3 Instagram posts + 5 Instagram Stories + 1 blog post (if applicable)
Pro Tip: negotiate, negotiate, negotiate! Influencers prefer to partner with brands on multiple posts because the sponsored product appears more authentic within their profile and because the influencer has the opportunity to make more money and get the most out of the partnership. Since influencers tend to prefer this type of partnership, the brand is more likely to negotiate a price both parties can agree upon.
As the popularity of social media influencers continues to increase, brands need to evaluate whether an influencer’s rates are based on a trend within the space, or if their endorsement of a brand is as valuable as they say it is. With more and more influencers requesting compensation in addition to receiving free product, brands need to determine how much they’re willing to invest in each partnership within their influencer campaigns based on three factors: the influencer’s media kit and how they showcase the quality of their work, their follower-to-engagement ratio and how many people their content is reaching, and the type of partnership the brand is looking for.