Lately, it seems like all kinds of brands are getting into bed with social media influencers.
In the earliest days of influencer marketing, rising social stars would align themselves with brands in exchange for free product. Those days are long gone: Today, influencers across every major vertical charge for their marketing services--and the most successful ones have created multi-million dollar businesses around their social presence.
The price of fame (and mentions)
So how much will it actually cost to get your product in the hands--and on the feeds--of your favorite influencers?
The highest paid personalities--those with massive followings on YouTube--actually earn far more. It's been reported that beauty guru Michelle Phan earns $3 million a year. Comedy duo Smosh rakes in $8.5 million annually. And the richest influencer of them all, Felix Kjellberg--a.k.a. PewDiePie--earns a cool $12 million dollars a year.
Fortunately, you won't need millions in VC funding to finance your first influencer program. (Only those with celebrity-sized followings can demand exorbitant rates).
Because influencers haven't had a reliable way of comparing their own pricing with their social counterparts, they often base their fees on what someone has offered them in the past--or what they simply feel their time and effort is worth.
The lack of transparency may soon change, as a new site called Who Pays Influencers, launched earlier this month. On it, you can find real fees that were paid to non-celebrity influencers for social campaigns.
There's no vetting of the posted info (so take what you read with a grain of salt) but the site does provide a window into what well-known brands are paying lesser-known influencers .
Do higher fees guarantee greater campaign success?
Not necessarily. For now, rates aren't closely correlated with key performance indicators, such as total following, click through rate, or impressions--and they're certainly not tied to sales. Talent fees are almost entirely based on what influencers feel they're worth.
This can be perplexing for brands and marketers, who are trying to understand why one fashion Instagrammer charges three times more than another with the same social media following.
Not only do fees fail to line up with KPIs, but the amount paid for a campaign doesn't reflect the intangible: how professional and accommodating an influencer is to work with and how much effort he'll put in to ensure that the entire project is a success (although you can make an educated assessment of the latter value beforehand by asking these six questions).
One thing important to keep in mind: you have the upper hand when it comes to influencer pricing.
That's because there are literally thousands of influencers (with numbers exploding by the day) who are actively growing their followings in the hopes of landing endorsement deals. If your first-choice influencer isn't available (or is out of your price range), you're sure to find several excellent alternatives who are a fit with your brand, budget, and program requirements.
So what should I expect to pay?
To come up with a budget for talent--that's just what you're paying the influencer, not the cost of program management or social amplification--first list out all your requirements for social content development and promotion.
Do you need the influencer to create original photos, videos, and blogs--in addition to promoting your brand on their social channels? How many assets do you need them to post? Will the influencer need to travel for the project ? How many social channels will she need to share the content on?
Each additional requirement means more work--and further leverages the value of the influencer's audience--so keep that in mind when coming up with a target budget. Plan to pay in the range of a few hundred to a few thousand dollars per social asset (with a text-only tweet the least expensive option and video the most).
Next, consider the influencer's total following on social media and determine how much you're wiling to pay for impressions on those feeds. Your cost per thousand impressions (CPM) may be considerably higher for an influencer than other forms of marketing (figure between $25 and $75 per thousand followers) because these audiences are very niche and highly engaged.
Once you've assessed both the value of the project requirements and the desired CPM, you should arrive at a project rate range. Keep your budgetary cap in mind--but don't share it immediately with the candidates you're targeting. Instead, let each influencer provide the pricing they feel is fair for leveraging their time and audience. Very often, you'll find that influencer candidates will come in with a lower bid than what you'd expected to pay.
If your top choice comes back with a much higher number, you should definitely feel empowered to negotiate. There's usually quite a bit of room to come down.
Is influencer marketing worth the money?
The early signs point to "yes" -- an influencer program can be a good investment (and you're bound to pay less for an influencer program than for a small ad campaign).
Despite the lack of standardization in pricing, working with influencers can definitely pay off. For every dollar marketers spend on influencer programs, they receive an average of $9.60 in earned media value (EMV) according to RhythmOne's Influencer Marketing Benchmarks Report and Guide. That's a pretty impressive ROI, and often worth extra time spent researching, negotiating, and working with influencers.