In a fairly new industry such as influencer marketing, the topic of budgets, payment, and pricing can be an ambiguous one. Different creators, agencies, and even brands price their campaigns differently, making a set ‘industry standard’ hard to quantify. But, how much should brands really be pay influencers, and how can this be appropriately calculated? In this article, we unpack influencer pricing, dispel common misconceptions, and attempt to give you a better understanding of how it works, and how to calculate your budgets.
What goes into influencer pricing? Let’s get down to basics.
A common misconception is that both brands and influencers calculate how much their rate of pay is, based on a creator’s following and engagement rate. In other words, the higher the levels of following and engagement, the more an influencer will get paid. Whilst these factors are of course considered and do influence the direction of pricing, there is so much more that goes into budget and payment determination. The time taken to produce content for a campaign, the reach, the brand or PR agency’s relationship with a creator, an influencer’s values, the saves, shares, DMs and engagement, the usage rights, exclusivity, data, audience relationship, quality, experience, niche, creativity, effort, availability, and energy are all factors that determine how much brands pay influencers.
And, what does the brand get in return? Sales, new followers, campaign storytelling, ambassador association (credibility), and content that they can later repurpose on their own channels.
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Both the effort and the reward is worth how much brands pay, so it is important that they approach influencers with accurate and fair pricing strategies if they want to foster long-lasting and fruitful partnerships. For example, when we spoke to German fashion creator, Leonie Hanne, she mentioned that she will occasionally create free content for brands, based on the fact that they have such strong relationships, and that she truly loves the collaborations she has done with them in the past. So, when you are approaching an influencer you feel really matches your brand for the first time, it’s important you get it right.
Why work with influencers?
In light of everything that has happened thus far in 2020, brands are experiencing a heightened realization of the need to humanize themselves, whilst influencers are becoming brands. Influencer marketing works so well because brands are able to work with a platform that is a real-life embodiment and communication channel for their values, image, and ethos. Influencers aren’t just a ‘paid space’ or mention, they represent genuine voices with dedicated and concrete followers – their audience is invested in their lives, supporting them and championing them.
Also, when working on campaigns, influencers essentially provide the full production and amplification package. Not only do they plan and create content for campaigns, but they also post and publicize that content – roles that brands would have traditionally outsourced from different departments. Aside from this, they have spent an extended period of time learning how to perfect the content they create so that it resonates with their audience. The way that brands and even consumers sometimes see influencer marketing is without the full understanding of what goes on behind the scenes, so in order to understand how much brands should pay influencers, we need to clarify what really goes into content creation.
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I’ve had a few shitty comments and DMs since I started speaking about about the problem with ‘gifting’ and a lot of those messages come from a severe lack of knowledge over what a content creator/influencer ACTUALLY DOES. I also worry that often, creators/influencers themselves don’t put enough worth by what they do because from the outside it seems like such a privilege to have this job or hobby. So I’ve broken it down a bit more here. Tell me again how all of this work into a post is fairly compensated by a lipstick? Let’s continue having these conversations so we can continue to bring transparency to the influencer industry. Is there a certain type of influencer who’s just in it for the free stuff or the fame? Who bungs up a 3 word caption against a selfie holding a product to a mirror and doesn’t give a crap about building authority or an audience? Yes. Should they be treated the same as content creators who have made this a craft and who expend time, energy and effort into building their personal brands? NUP. Let’s start by opening our minds, and the conversation and start to understand everything that goes into the content creation process. What would you add to this to educate others into what goes into being a content creator/influencer?
Below, we have included Vix Meldrew’s breakdown of the myths vs. reality of content creation:
Myth: Influencer writes a blog post, puts in a picture, and publishes it to a platform.
Reality – Influencer researches keywords/competitors, fleshes out ideas, drafts post, writes a post, optimizes copy for SEO (heading, keywords, metadata, etc.), proofreads, plan accompanying photography, takes photos or hires a photographer, optimizes images for SEO (alt tags), publishes a blog post, promotes blog post across social media channels, creates Pinterest graphics, share to Pinterest regularly.
Myth: Influencer takes a picture, writes a caption, adds hashtags, publishes.
Reality: Influencer plans picture idea, mood boards/Pinterest, hires a photographer/self-shoots, styles the picture (environment/location), edits the photo, plans in grid for cohesion and branding, works out optimum times to post, researches and curates hashtags, drafts caption, edits caption, scheduling/publishing, engages with comments/responses.
Myth: Influencer takes a picture, writes a caption, shares to Stories.
Reality: Influencer plans picture idea, mood boards, hires a photographer/self-shoots, styles the picture, edits the photo, researches and curates hashtags, engages with DMs.
Myth: Influencer records video, edits video, edits to YouTube/IGTV/TikTok.
Reality: Influencer plans video idea/storyboard, hires a videographer or self-shoots, films, edits the video, YouTube optimization or IGTV/TikTok captions, hashtags, and strategy, engages with comments.
What to take into account when planning your pricing
Now that we have mapped out what really goes into influencer content, as well as the reasons for working with influencers we’re going to explain 5 key things to consider when mapping out your pricing and putting together your strategy.
- Seasonal – The demand for influencers ebbs and flows. You want to plan in advance when it comes to working with creators, especially when they may already have a lot on their plate, or more offers coming in. If you are doing a campaign for the holidays, for example, you shouldn’t be reaching out to plan something for the week of Christmas when it’s already December 12th.
- Leave time for the influencer to come up with the creative concept, capture content, and submit in case you have any revisions.
- Depending on how well known the influencer is and if they’re experiencing tremendous growth, some talent will provide a fee based on their projected audience size of when the content will go live.
- Duration – will this be a quick and painless project, or is it long-term and providing them consistent payments?
Key takeaway: Plan your strategy in advance, and have conversations early. This eliminates any frustration of talent passing on a campaign. The talent will want to confirm if a potential project is moving forward if they have another offer coming in.
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Finding influencer contracts a bit of a minefield? I’ve attempted to simplify some of the terms that may crop up, here! Which ones have you come across before that have left you confused? Which terms do you wish they’d just bin? What terms would YOU like to add? Save this for when ya might need it!
Scope of Work:
What are you asking for when you are approaching influencers? This section covers things to consider when planning out your pricing and deciding how much to pay influencers.
- What are your “nice to haves”?: link in bio, swipe ups, carousel.
- The difference in rate asking for a 3 frame Instagram Story vs. a 5 frame Instagram story.
- Does the influencer need to purchase props, shoot in a particular setting, will they receive the product (how long will it take to receive), does it require wardrobe changes?
- Static vs. video content – prices vary depending on the type of content. Some influencers hire a photographer/videographer, some can capture it themselves. Sometimes a brand will supply the photographer/videographer so they’re hiring the influencer as “talent” only.
- Instagram post – a single image post is inexpensive compared to a post with multiple images/video content (carousel).
- Look past their social channels and their engagement – Understand why an influencer is credible in their space. Are they bringing their credibility from other work? For example, When you partner with LeBron James, you’re not just paying to work with LeBron James, you’re paying to sit beside him, the LA Lakers, Nike, and any other project he supports.
Key takeaways: Influencers have rates, and there is no magic number, as each person takes in numerous factors to price their content. There are a lot of levers to play with, but understand what is important and what the objective of the campaign is. Are two Instagram Story frames going to severely impact the overall goal?
Usage & Rights:
- Asking for perpetuity is out of the question.
- It’s great you have this asset/image, but does your brand utilize the assets elsewhere (website/blog, newsletters, paid), or do you just reshare it once organically?
- You can always secure a licensing fee if you need to reuse an asset. Carve a small portion of your budget towards this.
- Whitelisting is a premium – While it’s fantastic to have, some influencers still want to control their likeness/brand, and who can potentially receive that message.
Key takeaways: Would you pay an insurance company for coverage you wouldn’t use? Be realistic and honest about what your brand will do with the content. Two-thirds of brands repurpose content. If you’re the third that doesn’t, find out how much it is to license a piece of content from each influencer (per month, per 3-months, and what channels), set aside some budget or pull from your paid media budget for when the time is right. Worst-case scenario, if you don’t use the budget set aside, you can utilize those dollars on a test campaign.
Campaigns often involve a lot of cross-departmental teams and stakeholders. When everything goes smoothly and content goes live – it’s amazing. But if the next day an influencer posts something about your direct competitor it might hurt your campaign.
- The standard for exclusivity is +/- 1 day for beauty, +/- 3 days for fashion.
- Larger product launches that are supported with other initiatives we suggest pushing for a larger window but expect to pay a premium.
- Is the influencer known for travel? – They might have pushback on exclusivity if it infringes on them not working with other vendors for a long period of time without compensation. A lifestyle influencer who doesn’t travel as much might be more inclined with suggestions.
- Exclusivity is mostly thought of as influencers not mentioning competing brands, but you can create flexibility in categories. For example, if your luxury brand creates products across different categories; outerwear, knitwear, and accessories, but the main business is in outerwear. You can create flexibility by limiting an influencer to partner with competitors – but they can’t do any outerwear posts for a period of time.
- What is the cost of them turning down other opportunities?
Key takeaways: Understand the main objective of the campaign. Is it an always-on messaging post for social, or is it a large product launch campaign that the full company is behind?
Relationships with influencers
- Pre-existing relationships with influencers can potentially lead to preferential rates, bonus content/posts.
- Long term partnerships: This is the holy grail for influencers if they can find a brand that they truly love and consistently provides a stream of income they can speak to their audience more genuinely about their ongoing journey with the product or brand.
- Payments – If you can pay influencers sooner <30 days you’ll be surprised how much they are willing to do if there isn’t a delay in payment.
We hope you gained a little more insight into how much you should pay the influencers you work with and what you really need to consider when planning out your influencer marketing budgets and strategy. If you want more information on how to do this in a comprehensive way, visit Style Coalition or explore our software below!