These days, in a world of overproduced and inauthentic advertising, consumers trust influencers' recommendations a whopping 61% more than a brands own social marketing. Therefore, it is essential to start collaborating with influencers within your field.
However, there are many factors to consider in order to get this important relationship right for both parties. For example, even if you’re familiar with influencer marketing and branded content, when it comes to influencer pricing, everyone seems to have a differing opinion.
The first thing to think about before you reach out to influencers is to consider your strategy and goals. You can do this by simply writing out your goals and specifying key performance indicators (KPI) in a spreadsheet or planning document. Use these KPIs for a good starting point:
Increase brand awareness
Increase sales (you can also track affiliate sales as a KPI in Shopify Collabs)
Now onto the very important but unique factor of influencer pricing. It is different for each platform.
Instagram influencer pricing:
Influencer rates should be based on follower count and engagement rate. The 2021 average cost for an Instagram post was $1170 and $906 for an Instagram story. Typically influencers will have rate sheets they have for the content they are willing to produce. Use those rates as defaults when modelling and predicting outcomes. Here are the typical prices influencers have commanded depending upon their reach:
Nano influencers (1000 - 10,000 followers): $10 - $100 per post
Micro influencers (10,000 - 50,000 followers): $100 - $500 per post
Mid-tier influencers (50,000 - 500,000 followers): $500 - $5,000 per post
Macro influencers (500,000 - 1,000,000 followers): $5000 - $10,000 per post
Mega influencers (1,000,000+ followers): $10,000+ per post
As a baseline, the industry standard is $100 per 10,000 followers. You can use the following formula as a generic guide:
$100 per 10,000 followers + number of posts + additional factors (i.e. expenses for shoot, usage, exclusivity) = total rate.
TikTok influencer pricing:
If you want to speak to a younger audience and have a budget, using a TikTok influencer is your best bet. You should know though that the cost of a TikTok is three times that of an Instagram post. This is because producing video content is more time-consuming than creating a photo. The average cost for a sponsored TikTok is $3,514. That’s the second highest after YouTube which averages $4,491 per video. TikTok’s algorithm allows for a superior level of engagement, making your chances of going viral much higher than on other platforms. The average cost per TikTok based on influencer tier is as follows:
Nano influencers (1000 - 10,000 followers): $800 per post
Micro influencers (10,000 - 50,000 followers): $1,500 per post
Mid-tier influencers (50,000 - 500,000 followers): $3,000 per post
Macro influencers (500,000 - 1,000,000 followers): $5,000 per post
Mega influencers (1,000,000+ followers): $7,000+ per post
You can use the following formula as a generic guide:
Cost per thousand (CPM) of an influencer = Average # of views, likes, and comments, from their last 5 pieces of content/cost of content.
There are several factors that affect influencer pricing beyond audience size and engagement rate. These include:
Exclusivity. An exclusivity clause, preventing your influencer from working with your competitors, will likely cost you. If this is something that us important to you, factor this in when you negotiate and budget.
Agency Fees. Many influencers are represented by agencies or managers, who typically charge additional fees.
Campaign length. This will directly affect influencer pricing. A one-time activation such as running a contest or promotion will cost less than a long-term endorsement contract.
Post combos (when you ask an influencer to post on more than one platform) will cost extra but maximizes the reach of the campaign by engaging multiple audiences.
Link in bio
Since you can’t put a link in a TikTok or Instagram caption, adding a link in bio is a good idea if your goal is to drive traffic. This addition will likely cost extra.
Now you are familiar with the pricing for both Instagram and TikTok, it is worth being aware of the different kinds of partnerships that influencers may command.
Affiliate marketing. This is a sales model where a brand pays an influencer to promote their products or services in exchange for a commission based on sales resulting from their referral. Affiliate marketing is popular with brands because there are no upfront costs. Depending on the influencer, commission rates can be anywhere from 5% to 50%.
Brand ambassador. This means the influencer will consistently share content about your brand and products. This is a long-term partnership and because your brand ambassador will be closely associated with your brand, it’s important you choose them wisely.
Sponsored content. A standard sponsored post will include either a photo or video and a caption. Typically, the influencer will create the content and in some cases, the product or service is featured in it as well.
Gifting. Some brands will send products to influencers in hopes of a positive feature on their platform. While you might be able to arrange gifting in exchange for a shoutout with nano and micro influencers, this tactic is less effective with larger creators.