It’s no secret that marketers rely on the relationships they build with influencers to spread brand awareness, earn links, and get introduced to a new market. It’s a tactic that we’ve all done. For me, I’ve written articles and created infographics that highlight the leading authority figures or top influencers in their industries for many years. The hope is that these individuals become aware of this content and proudly share it on their website or social channels.
Today, however, “influencer” is one of the biggest buzzwords in marketing - and brands are paying influencers big money to bring attention to their products or services.
One social media executive confessed to Digiday that the tipping was in 2014. “That’s when I feel brands really, finally accepted that social media was here to stay.” The exec adds, “Up until then, it was, ‘Is this thing worth investing in?’ And then Facebook and Instagram started giving out numbers, and brands said, ‘Wait, now we don’t have enough content to publish.’”
The executive also states that everything went wrong because they “threw too much money at them and did it too quickly. So in 2014, they were making $500 to show up and take some photos. Then it became $1,500. Now it’s hundreds of thousands of dollars.”
Perhaps the most troubling question in the interview was when the executive was asked, “How do you decide what you pay them?,” the response was, “We have no idea what to pay them. That’s the problem.”
“Right now, I separate their role as a ‘content’ producer and influencer. So I pay them, maybe, $4,000 for 50 images, fully edited, that I own. Then we talk about distribution. We’ll pay them to post two, four, six posts. We have to separate that.”
As someone who prides himself as an influencer, and a marketer who has turned to influencers as well, the confession from the executive had some valid points, along with some erroneous comments.
To clear things up, here’s a closer look at how much influencers earn and why they charge these fees.
How come influencers are getting paid?
Before we get into some figures here, let’s briefly explain why influencers charge brands or marketers.
For starters, influencers create, distribute, and promote sponsored content for brands. This is essentially a win-win. Creative individuals and authority figures are compensated for their time, money, and, effort that went into building those fan bases and establishing long-standing relationships. Brands are content because it gets their name in front of a new audience.
As Eric Dahan, the chief executive of influencer marketing network Instabrand, told the Los Angeles Times, "A trusted voice speaking to their personal audience, this is the most effective and organic exposure a brand can get.”
In other words, people don’t care about what a brand has to say. They do, however, care about what people like them have to say.
The influencer price tag.
Up until May 2016, there wasn’t much transparency in how much influencers make. That all changed when Who Pays Influencers was launched. This anonymous crowd-sourced list includes the real fees that were paid to non-celebrity influencers for social campaigns. For example, Payless Shoes paid an influencer, “$1,900.00 and a $75 gift card for three blog posts each shared at least three times on the social media platforms of my choice.”
Of course, the price varies. Some influencers charge around 50 bucks for a tweet, while an influencer with 5 million followers can charge around $100,000 for a campaign for three social media networks, along with a video post for each platform. Danielle Bernstein, the creator behind the Instagram channel WeWoreWhat, informed Harper’s Bazaar that she charges $5,000 to $15,000 for one piece of content.
And, YouTube celebs are cashing-in like no other group. Felix Kjellberg, a.k.a. PewDiePie, earned $10 million in 2015, while beauty guru Michelle Phan earns about $3 million annually.
Even though none of the social media influencers are taking advantage of this trend.
If you want a guest post to get published on a reputable and leading publication like Forbes, you could expect to pay almost $1,000. Successful bloggers could get anywhere between $50 to $6,000 for a guest post depending on the amount of traffic and Google Pagerank.
Do higher fees equal success?
While influencers can definitely be an assist, there’s also no guarantee that paying a higher fee will make a campaign successful.
You need to identify your key performance indicators in advance, such as total following, click through rate, or impressions. If the fees don’t align with your KPIs, then it’s certainly not worth the investment.
You also want to make sure that you and the influencer get along with each other and that the influencer gels with your brand and it’s values.
Amanda Pressner Kreuser, founder of Matshead Media, developed six questions to ask an influencer before hiring them;
- How do you relate to my target audience?
- What is your typical response time?
- Are you able to report your analytics?
- What were your most successful brand partnerships?
- Are you comfortable with these deal points?
- What is your "emergency" contact information?
How much should I pay influencers then?
Coming up with a budget for an influencer campaign involves a couple of factors.
The first is determining the scope of the project. Does the influencer have to create original content for your brand, along with promoting it? What kind of content are they producing (a tweet costs a whole lot less than a video)? How often do you need them to share this content? How many channels will it include? Do they have to travel for an appearance?
This all includes additional work and time, which means influencers will charge more. To be safe, set aside up to a couple thousand of dollars.
You also want to review the influencers total following on social media, as well as the amount you're willing to pay for impressions on those feeds. This means figuring out your cost per thousand impressions (CPM) - which can be between $25 to $75. ClickZ has a handy calculator to help you determine this figure.
After coming up with a budget, let the influencer provide their price. You may be surprised that it’s lower than you thought or that the influencer is more than willing to negotiate.
Final words of advice.
Yes. Influencer marketing is worth the investment. Besides bringing attention to your brand, it can be more affordable than launching an ad campaign. However, you have to do your due diligence first.
This means understanding the scope of your campaign, how much you’re willing to spend, and making sure that the influencer is legit - this means verifying that their followers are real - and that they’re the right fit your brand.
Also, don’t be worried if you’re first choice isn’t available. There are thousands of emerging influencers who will gladly accept a new project for a little less than you think.