Seventy-four percent of consumers rely on social media to help them make purchasing decisions. And the influencers on social media are the ones affecting those decisions. Trust in brands is declining, while the power of influencers is on the rise.
So why aren't more marketers putting money into their influencer marketing programs? Many feel influencers don't require compensation. But if you're paying for things like advertising and content, why wouldn't you pay for influencers too?
Research shows that for every $1 marketers invest in influencer marketing, they get $6.50 back. Because of this, 55% of marketers plan to increase their influencer marketing spend this year.
If you're still hesitant to shell out cash to social influencers, you're not alone. Many marketers are still debating the pros and cons.
On paying influencers, Rugby Stores' Max Robinson says, "The pros are that you can almost always expect an increase in traffic and social media interaction, purely due to the social media following that these influencers have. However, the main con is that often this alone isn't enough to warrant the price that some influencers will charge."
Let's take a deeper dive into the pros and cons of paid promotions.
1. The influencer feels fairly compensated
When you provide compensation for influencers in exchange for their partnership, the influencer feels appreciated and that the work is worth it. Influencers invest a lot of time and energy into working with your brand, especially if you've recruited them to create original content on your behalf. By paying them for this effort, you're showing that you value the influencer and their contributions.
2. You can establish a contract
Before you agree to a partnership, you need to set some ground rules. Create a contract that both you and the influencer can agree to. Having a contract ensures the partnership is fair and a sure thing. This way, your brand will feel secure knowing the influencer will deliver on what was promised, and the influencer will feel secure knowing your brand will pay them the agreed upon fee.
3. You can request to review content before it's published
When you have a contract, you can also include a requirement that the influencer's content be reviewed before it's published. This allows you to have greater control over the influencer's portrayal of your brand, and makes sure you and the influencer are on the same page in how you position your brand.
4. You have potentially powerful results
"An influencer promoting and amplifying your message, your brand, to their audience means credibility, it means additional reach and it means you get an outsized modifier to the conversion process," says Rand Fishkin, founder of Moz.
There's no doubt that partnering with an influencer can have huge benefits for your brand. In fact, customers acquired through word-of-mouth have a 37% higher retention rate. Paying the influencer ensures a stronger partnership, which could mean a higher ROI. If the influencer feels like they've been treated fairly, they'll also be more likely to be a better brand advocate.
1. The partnership could feel inauthentic
With more and more influencers partnering with brands, consumers are starting to catch on. Be careful in how the influencer promotes your brand. If it seems inauthentic, it won't resonate with their followers and will seem like the influencer has sold out.
"One key in influencer outreach is the research you put in before you reach out and ask," says Robert Rose, chief strategy advisor for Content Marketing Institute. "Have a very good feel for where they're headed, what their goals are, and what they care about."
When you're researching influencers to partner with, take a look at what brand partnerships they've done in the past. If they've partnered with many brands, your brand may get lost in the mix.
2. The influencer's fees are higher than the ROI of a partnership
Often, influencers will come prepared with a pay rate. This means you should also have an idea of what you want to pay the influencer. Do your research on the going rates for influencers in your industry with similar-size followings. For example, influencers with the potential for 10,000-50,000 monthly impressions are paid, on average, $175-$200 for a blog post.
Be fair with what you pay the influencer, but don't go overboard. If the fees are too high, it may end up costing you more than you gain from the partnership.
3. Results are not guaranteed
While working with influencers has been shown to be beneficial for brands, it doesn't guarantee that it will have the desired results. Because there is a risk, your brand could end up paying an influencer, but gaining nothing. To avoid this, make sure you do your research and choose to work with an influencer who is right for your brand and your audience. Don't be afraid to negotiate the fees with the influencer to ensure you both have a mutually beneficial relationship.
Determining Influencer Compensation
The truth is it's not really a question of whether or not to pay influencers, but how. Compensation doesn't always have to be in the form of cash. It could be the gift of a product, promotion of their platforms by your brand, exclusive access to an event or something else.
"It's important to focus on ways to help the influencer," says Michael Brenner, CEO of Marketing Insider Group. "Help them build their brand. Help them reach a new audience. Help them gain access to insights and content for their audience."
The influencer wants to know what's in it for them. Why should they work with your brand? As long as you are able to answer that question and come up with compensation that everyone is happy with, you'll have a strong influencer partnership.
Do you offer compensation for the influencers you work with? Why or why not? Share in the comments below: