Influencer marketing rates: How much are influencers rates?
Ensuring the best return on investment when employing influencers to grow your audience.
When Rachel Burton launched baby-carrier business Marsupi in Australia in 2018, she had little experience in social media marketing and had never worked with social media influencers.
In fact, the business groups she belonged to on social media were often filled with horror stories about influencer partnerships that had gone sour – or failed to deliver results, despite hefty payments.
But after experimenting with social media advertisements, which resulted in limited sales, Burton began investigating influencer marketing – and today it is a key part of her sales strategy. “We’ve worked with dozens of influencers now and it’s become really important to the business,” says Burton, who adds that some influencers can drive thousands of dollars in sales with a single post.
"We tried paid advertising, but it never got the same cut-through."
“Partnering with influencers is just the way marketing is done now. We tried paid advertising, but it never got the same cut-through.”
Burton attributes this to the strong relationships that influencers have built with their communities, which they can then parlay into sales. “There’s a sense of personal endorsement that isn’t there for other types of advertising.”
Burton is one of countless small-business owners around the world who have found success with influencer marketing. However, before launching any kind of influencer program, it’s important to understand how influencer partnerships are structured and how to negotiate influencer rates.
How much do influencers cost?
In short? The rates vary a lot depending on a number of key factors.
Some influencers are happy to post in return for free products; other, more famous influencers can command millions of dollars per post.
Are you looking to work with nano influencers, micro-influencers, macro influencers or mega influencers? Do you want someone with a huge TikTok audience or a dedicated Instagram influencer?
Although some websites claim to offer an earnings calculator tool and calculate the earnings of different creators, it's not a fool-proof method. One oft-quoted formula suggests that sponsored Instagram posts should cost roughly $100 per 10,000 followers, the reality is that when it comes to influencer campaigns, budgets are more nuanced.
Because unique marketing can range from highly produced video shoots to iPhone snapshots accompanied by a hashtag, it's likely your influencer marketing budget and pricing model will have a lot of options.
"Influencer marketing is definitely where art meets science."
“Considering the number of factors that can affect influencer marketing rates it’s hard to advocate for a one-size-fits-all policy,” explains Alice Kennedy, a publicist at Kate&Co PR who has worked on influencer partnerships for beauty brands such as Tarte and Bali Body.
“Influencer marketing is definitely where art meets science,” agrees Maxwell Mitcheson of Los Angeles agency TalentX Management, which represents some of the world’s biggest social media stars. “There are a lot of intangibles, but you can guarantee that every single additional term comes with an additional fee.”
Those intangibles might include everything from:
· An influencer’s audience size
· Their engagement rates
· What authority or niche they occupy
· The deliverables
· Usage of the assets created
· Exclusivity and/or non-compete clauses
The social media platform itself can also affect rates. Influencers on YouTube and TikTok can often command higher fees because video production can be more expensive and time-consuming than an Instagram influencer whose Instagram post is a photograph.
What to consider when negotiating influencer rates
Follower count
This is perhaps the most obvious factor when it comes to calculating social media influencer marketing rates – the more followers, the more expensive a social media influencer is likely to be.
This is definitely important. After all, it can indicate how effective an influencer or creator is at building an audience and community – and how much influence they command.
"Followers are not everything."
However, this is not the only factor to consider when negotiating influencer marketing campaigns and subsequent rates. “Followers are not everything,” explains Kennedy, who has seen firsthand how brands can fall into the trap of being blinded by "vanity metrics" such as counts without considering other factors.
Audience engagement
An influencer’s engagement rate – or the percentage of followers who interact with their posts – is arguably more important than follower count when trying to calculate and determine your marketing budget.
“In my opinion engagement rate is the most important thing for brands to consider when deciding to work with an influencer and how much to pay them,” says Kennedy.
She points out that plenty of influencers have fake followers – also known as zombie followers – that they have bought to bolster their follower count and attract advertisers across different platforms like Instagram.
Engagement rates are more difficult (though not impossible) to fake – and if an engagement rate is high, they’re more likely to have an authentic audience who trust their influencer marketing skills and may ultimately buy your product.
How to determine influencer engagement rate
To work out an influencer’s engagement rate, simply divide the number of public interactions on an influencer’s post by the number of followers they have and multiply by 100 for a percentage figure.
In other words, if an influencer had 20,000 followers and a post received 500 likes, their engagement rate would be 2.5 percent.
500/20,000 x 100 = 2.5%
If you prefer to leave the calculations to the experts there are also free online services like Social Blade that can determine influencers’ engagement rates on a variety of platforms. You can also look for an Influencer Marketing Hub or Instagram Engagement Calculator.
Scarcity and authority
Using creators with niche specializations offers the advantage that they can deliver an audience that is already interested in the product, and they have a sense of authority in the sector as a trusted marketer. For example, if you are a business that specializes in vegan burger patties and you promote your product using a vegan chef, you know that the majority of their followers already have an interest in vegan food, meaning you can directly advertise to your target market.
The downside to this is that there may be only a small pool of influencers who can speak knowledgeably to that audience, so they may command higher influencer marketing rates.
Tip: Ask for audience demographics
A large and highly engaged audience is one thing. But it’s equally important to work with influencers whose audience aligns with your target demographic, which is why it’s necessary to check influencers’ audience analytics.
For example, a bikini brand might be considering partnering with a social media influencer who posts photos of themselves in a bikini. At first glance, a large follower count and high engagement rate might suggest that the influencer is a good fit. However, a deeper look at the influencer’s analytics may reveal that 80 percent of her audience is male – meaning that she’s unlikely to generate many bikini sales.
Metrics such as gender, age and location are all available to influencers via the ‘insights’ section on social media platforms, and brands should ask for them before agreeing to any partnership says Kennedy.
How to structure an influencer deal
Agree on deliverables
In social media, "deliverables" are the finished product that an influencer posts, whether that’s a YouTube video, TikTok or Instagram story, blog post, Facebook post or photograph.
It’s important to agree on the exact deliverables, from the number of posts, if your agreement is pay-per-post, down to specific details such as the exact information, words, hashtags or social media handles that need to be included in the image or caption. Don’t forget to specify which channels should be used, as well as "live" dates – down to the hour, if that is important.
“The number one mistake I see is brands not giving influencers creative freedom."
While having clear parameters is important, Kennedy cautions brands against being too prescriptive. “The number-one mistake I see in my job is brands not giving influencers creative freedom,” she says, adding that “brands often really want to edit down the content to be a picture-perfect idea of how they want their brand to be seen.
“You work with an influencer because you like their content and you trust them to represent your brand, so you need to trust them to represent you in a way that their audience is going to respond to [as opposed to demanding a specific look and feel to the content]."
Exclusivity
Imagine working with an influencer only for them to post about a direct competitor’s product in the days or weeks following your collaboration? Not only would it dilute the impact of the campaign, but it could potentially reflect badly on your brand.
One way to avoid this is to consider working a category-specific exclusivity and non-compete clause into your influencer contract. This means that an influencer can’t post about a competitor's product during a specific period.
Jill Birmingham, influencer and partnerships director at Sydney agency MAXCONNECTORS, says exclusivity periods can range from one day on either side of a campaign period to two weeks, three months or even 12 months for bigger partnerships but are always determined on a case-by-case basis and come down to much money is being offered to the content creator.
“Exclusivity could be for a specific subcategory, such as dry shampoo, to a category like haircare, or a major category, such as beauty,” she says.
Birmingham warns, though, that exclusivity clauses always attract additional fees, “as they restrict an influencer from creating their usual content and can also have an impact on revenue as they have to turn [down] other paid partnerships.”
Mitcheson agrees that exclusivity clauses can be important, but for smaller brands they aren’t always necessary. “Take the beauty and skincare space,” he says. “It’s almost impossible to do a full face of makeup using just one brand and consumers know that.”
Deadline for content approval processes and live dates
It’s common for brands to ask for content approval, which provides the opportunity to review content before an influencer posts anything.
In this situation both the influencer and the brand should agree, up front about how many rounds of revisions are allowed within the scope of the agreement. Brands should also factor the approval process into their timelines and be realistic about how quickly content can be posted.
Fee, including production costs and agency fees
If the influencer has a large social media following, it’s possible that you’ll find yourself negotiating influencer marketing rates with their manager or talent agency. This will always incur an additional agent’s fee – or additional services fee (ASF) – which can be anywhere from 10-40 per cent. It’s a good idea to check whether the influencer fee is inclusive or exclusive of this fee, as it can make a big difference to the total budget.
Any collaboration may also involve what’s known as "production costs", which are the costs of creating content, such as makeup, hair, lighting or studio rental.
Rights and usage
It’s important to agree who owns the rights to any content that’s created – and where it can be used.
When an influencer photographs a product and promotes it on their social media page, they are often happy for the brand they have worked with to repost the image on their own social media channels (after all, this helps promote the influencer, too).
However, the brand isn’t automatically entitled to use that photograph on its website or in paid advertisements.
“Brands can usually only use influencer content for ‘organic’ usage,” says Kennedy, explaining that organic usage is just reposting the content to the brand’s account with no paid investment. “Once you put money behind it via advertising or boosting, that’s when it’s not organic,” she specifies.
If a brand would like to use the influencer content for advertising this will require a usage fee and must be negotiated separately.
“Sometimes influencers will only allow organic sharing of their content for a certain period such as six months, and then it must be removed from the brand’s social pages” adds Kennedy.
To avoid confusion, it’s important to agree on usage up front.
The rising cost of influencers
The world of social media is fast-paced, with everything from follower counts to platform features constantly changing – and influencer rates are no exception.
“Influencer marketing isn't what it was five years ago, let alone two years ago,” says Mitcheson, who represents TikTok creators like Noah Beck and Bryce Hall. He explains that as platforms mature and become more and more crowded, influencer marketing costs rise:
“Whereas before only a handful of brands were advertising with influencers, now there are so many more players in the space. It's competitive because there's only so much inventory that you can buy into as an influencer, so those prices keep going up and up and the allocation for those budgets have just gotten bigger and bigger."
How to reduce the costs of an influencer package
The good news is that there are lots of ways to reduce the costs of influencer marketing.
Don’t settle on the first number
“There's a lot of back and forth when negotiating influencer rates,” explains Kennedy, noting that brands should not be scared off by the initial figure an influencer or their manager provides. “In my experience, there’s almost always room for negotiation. It’s just about having a very open and honest conversation about what mutually beneficial objectives can be achieved.”
"There’s almost always room for negotiation."
She recommends that if you have a set (or limited) budget, it’s best to be up front with the influencer or talent manager, so you can work backwards to establish what you can afford.
Build a bundle
It is becoming increasingly common for influencers to deliver social posts as part of a package or bundle, which can be more cost-effective.
For example, you might choose to purchase several posts, across multiple platforms, or a package of posts and Instagram stories.
Plus, longer-term partnerships or repeat partnerships often deliver better value.
"Long-term partnerships feel more organic to audiences."
Mitcheson suggests that cheaper deliverables are not the only advantage of bundles. “Long-term partnerships feel more organic to the audience because you're getting hit repeatedly over time. We know that a consumer is more likely to convert after seeing an ad multiple times, not just one time.”
Consider gifting
Don’t have the budget for an influencer? Consider a gifting program, where influencers are ‘paid’ through products. This is how Lomas prefers to work with influencers, explaining that it often leads to more authentic partnerships.
“Our most successful partnerships have resulted from working with influencers that are aligned with our core values and have a genuine love for the product and brand,” she says. “When followers can see the product being used frequently in everyday life, and not just as a one-off post or story, they have more faith in the product meeting their needs.”
"Our best partnerships are with influencers that genuinely love our products."
Create impactful, visual experiences
Another option is to invite influencers to a fun event or trip (known as a "famil", short for familiarization). For example, a beauty brand might host an afternoon of pampering, or a children’s clothing brand might invite influencers and their children to a fun event targeted at kids.
If this is an option, don’t forget to create a photo wall or visually appealing backdrop or "moment" that influencers will want to post about.
Holding a fun – photogenic – event is a great way to develop a relationship with influencers, and hopefully some will post about the event and your brand.
Create discount codes
Offering influencers a discount code, which can then be used by their audience, is a great way to drive sales.
It also allows brands to track which influencers are driving sales, if they are each given different codes.
This approach is also often popular with influencers, as it can help build their own following if the discount is attractive to their audience.
Launch an affiliate program
Another tried-and-tested approach is to launch an affiliate program, where influencers receive a percentage of the sales they drive. To launch an affiliate-style program, brands need to work with an affiliate network, like Rakuten, or software for a sale to be tracked correctly.
Lomas offers every influencer a discount code, and in turn passes on a commission to the influencer who has delivered the sale.
“It's a great way for us to give back to those influencers we partner with and have supported our business.”
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