How Much Should You Pay a Social Media Influencer?
There’s a lot to think about before spending your marketing budget at work. Between research and surveys, Facebook ads and video advertising, you have a lot of options. One way to see a good ROI in marketing costs is through social media influencer marketing.
But how exactly do Influencers work? What tasks and promotional work can they do for your company?
When working with social influencers, it’s about your goals. For now, we’ll stick to two main ways our clients win with influencer marketing, and talk about how an influencer can help you achieve big results in 1) Brand awareness and 2) Growing your followers.
Goal 1 - Increasing Brand Awareness
Most companies are interested in growing their brand awareness via social media marketing. Here are some ways a social media marketing influencer can help:
Instagram Photos and Videos
If your goal is to increase brand awareness, then there’s almost no better way to do it than by partnering with an influencer to create an instagram story or post about your company or product. Having an social influencer work to increase brand awareness would look like them posting a picture with your product and/or recommending your product to their Facebook and Instagram followers.
Want to learn more about brand and marketing efforts in general, read Branding vs Marketing: What's the Difference?.
Vlogs and Blogs
Influencers might also reference your product in a written blog or vlog (video-blog) on any number of platforms.
Let’s look an example:
Say your goal is to increase your brand awareness. You own a restaurant and you want to host a cooking lesson event in the dining room and kitchen of your location. To market your event, you might have a local cooking and food vlogger talk up one of your secret recipes. Ideally they will have a high amount of video views and would be well known in the area. They might even have a million followers. Somewhere in the video content you would have the vlogger recommend attending your event to their viewers or to go to your restaurant for similar recipes. They will need to also include a link or a button on that same platform. Then, you will at minimum drive website traffic to your page and/or social media accounts.
This type of marketing is often denoted as being a paid sponsorship by the influencers right on the page. It is so typical that consumers are happy to watch their favorite vloggers share their recommendations. Finding the content a change from the normal, it is seen as entertaining and informative.
These days, there are so many influencers online that it’s “easy to find an influencer that matches a company’s ethos” (eMarketer). The key in any case is knowing which influencer to choose.
We know most companies can’t afford Selena Gomez, Kendal Jenner or Dwayne “The Rock” Johnson for promoting their products so we turn companies onto nano- and micro influencers. These are people in the power middle influencer range. They have 2,000 or more followers and aren’t necessarily going to even charge for product promotion. Sometimes, they will simply exchange the follower growth they get from promoting your product (and the product itself) for the work they do. That’s because most of the time, it’s just a hobby or side hustle when they’re at that 2k-followers level. It’s not until you get into the tens of thousands and hundreds of thousands of followers that the pay rate dramatically increases. At that point, paying influencers requires a much much bigger budget.
Goal 2 - Growing Your Followers
If your goal is to grow your followers I would suggest doing a giveaway, sponsored posts an influence creates in order to promote a company’s product or service. Give-aways are an easy way to reach your target and potential customers.
Let’s keep going with the cooking class event example. The approach here would be going a step further and inviting the vlogger to attend your event. The vlogger could even (drum roll please) offer a give-away for tickets to the event in exchange for both tickets himself and the photo op it will give him when he goes. That might be a total of $95 out of pocket for you (aka those three tickets you just gave out), which is pretty good deal. Overall, having him there would be a big selling point and would bring your current customers as well as the vlogger’s followers to your event. Both you and the vlogger could receive more followers from promoting the class, especially if your restaurant is the kind of place his potential followers were already going. This could be a win-win for both of you, and that’s the point. I hope you can see now how endless the possibilities really are.
Once you know your goal and the result you want them to bring, then we can talk about marketing pricing and negotiate your business deal with an influencer.
Influencer marketing is a great way to build awareness without breaking the bank.
Most of the time, working with nano-influencers is not only cheaper, but ideal for tracking real engagement. One interviewee with The New York Times agrees: “There is such a saturation at the top…We’ve seen a real push to work with smaller and smaller influencers because their engagement is so high…”
Still not sure social media marketing is the way to go? Check out this blog to learn 9 Reasons Why Your Business Needs To Be On Social Media.
Influencer Rates and Pricing
According to MediaKix, typically professional influencer marketing cost is based on their “popularly, engagement, past performance, “it” factor, production quality and niche skills”.
At Caffeine we think about a few factors when determining influencer marketing and spending. We look at how many impressions they get per post and think about what type of engagement and collaboration our clients would want to do with them. We also think about the fact that our clients are going to get a free piece of content from it that they can use on their own social media. When we manage giveaways for our clients we look at the cost per thousand impressions in relation to how much Facebook Ads would cost for comparison.
With the quickly booming industry of influencer marketing, experts agree that it’s a challenge to report on exactly what to charge and most say it depends. Later shares that “many digital marketers adhere to the one cent per follower (or $100 per 10K followers) rule”. But any given social media management or talent agency might stick to a formula with less than 1 cent per follower as an average price. Hootsuite remarks that often “…influencers will have a press kit describing their rates and the types of partnerships available. Depending on the campaign, bundled content or special rates can also be worked out to reduce labor and costs.” That means influencer pricing is set just like any other talent or marketing contractor, and you can expect to pay them relatively similarly. Depending on their business model, they might even charge using packages or straight fees. Moreover, Ignite Visibility agrees there’s no exact formula that regulates the factors that affect the cost of an influencer. There are, however, ways to go about calculating how much you might spend on each influencer and where you might set your budget.
Engagement for Brand Awareness
According to Scrunch, the most effective way to measure an social influencer’s ability to help you with engagement is their impression metric. It’s important to note that only Instagram influencers with their account set to a business account can see their impression number. Impressions denotes how many people see their content; it doesn’t explain interactions, just how visible their content is. In other words, impressions quantify an influencers reach.
If an influencer posts without good engagement and low response from their followers, there’s no real point in using them to advertise your product. It’s the opposite (having good engagement metrics) that makes the real difference between using an influencer to market and not using them. Hootsuite says engagement rates can be found by taking “all engagements on a post (likes, comments, clicks, shares), dividing by follower count, and multiplying by 100”.
Check out the industry standard engagement rate for Instagram (Scrunch):
Less than 1% = low engagement rate
Between 1% and 3.5% = average/good engagement rate
Between 3.5% and 6% = high engagement rate
Above 6% = very high engagement rate
Now, let’s implement all this information in an example to learn how to pay social media influencers. We’ll use the cooking vlogger and the restaurant owner example.
Originally, the owner found the influencer on YT, but at first she only wants to use him for Instagram marketing. (That’s good budgetary thinking because youtube influencers get paid more, especially if they’re in the gaming industry (VOX). This particular vlogger has 5,500 followers on their Instagram account. When he posts he is expected to get about 300 likes, 20 shares and 40 comments. He tells you, the business owner, that the production costs are low so he will require a $200 charge per post on Instagram.
To find his engagement rate, following the formula above from Hootsuite, we add 300+20+40 and divide that by 5,500. Then, that outcome gets multiplied by 100, which gives us a 6.5% engagement rate.
As far as engagement rates go that’s a great number. You’ll definitely sell tickets from his post. But to determine whether his rate of $200 is fair, we’ll use the Later’s $100 per 10K followers rule. According to that rule, his rate is on the affordable range based on his followers to engagement ratio.
Digiday says the pay rate of YouTube is about $2,000 per 100k followers.
Just for fun, let’s say our cooking vlogger does have 6,250 YouTube Subscribers. He might charge $125 dollars to briefly mention your restaurant and event in one of his regularly scheduled cooking videos. That’s an incredible deal seeing as how engaged his audience is on other platforms.
As you can image the higher the engagement rate, the more expensive the influencer will be. The amazing thing is any give macro influencer might have a lower engagement rate than nano- and micro-influencers, which is - in part - why they are our go-to for promoting your small business.
Give Aways for Increasing Followers
Give-aways are contests where a blogger / influencer asks their followers or users to do something in exchange for a prize. The prize is part of a product or service promotion and is handled by the influencer for a fee. Later shares that “one [particular] lifestyle blogger with 170K followers and a 4.5% engagement rate charges $500 for sponsored giveaways”.
Honestly, that’s pretty good for instagram influencer marketing. Imagine all the work that goes into gaining 170,000 followers and then retaining 4.5% of them as an invested, impressionable, active audience. You’ve entertained, informed and inspired so many people and have amassed a fairly big audience size. Now, you can charge $500 for a give-away to help other companies grow their follower count. That must be an amazing feeling. On top of that, as a paid influencer, you’re actually contributing to the social media platform’s culture within your niche.
Influencers aren’t the only people who impact the culture. Did you know you can grow your influence too - whether you are a millennial influencer or not. Check out 4 Ways Millennials Can Grow Their Influence to read more on this topic from our founder, Evan.
As a company owner, if you’re goal is to increase your followers on Instagram and Facebook, finding influencers within your niche will be valuable to you. When looking to attract a wider target audience, look no further than a give-away to help you win.
According to MediaKix, here’s a simple way to calculate your ROI: First, add up your expenses. This includes how much you spent of your time and money before, during and after the campaign. Next, add up your return (purchases, followers, leads, etc). Finally, divide those two numbers and then multiple it times 100. BOOM. You’ve got your ROI.
Many companies are seeing a huge impact in their ROI with influencer marketing as part of their holistic marketing campaign. If you want help partnering with an influencer to achieve your marketing goals, click the button below.
Before I had the chance to work with influencers, I thought they were probably mostly self-obsessed and would be really hard to work with.. In this blog post False Assumptions About Social Media Influencers I share insights on my judgmental attitude vs. the opportunities I now believe influencers bring to the table.
Social Media Intern