Paid Vs. Unpaid Influencer Marketing [Infographic]

Should You Pay Brand Influencers? Paid Vs. Unpaid Influencer Marketing [Infographic]

UPDATE May 2, 2019 — Influencer marketing is one of the fastest-growing forms of advertising today. With 80% of marketers saying influencer marketing is effective and two-thirds of marketers increasing their budgets in 2019, influencer marketing campaigns have taken off like turbojets.

In the wake of the growing industry landscape and as new influencer tiers emerge, however, the price of working with top social media stars has steadily risen. For brands whose marketing budgets aren’t large enough to support the cost of top-tier influencers, some brands may consider developing unpaid influencer marketing partnerships. While unpaid influencer marketing activations are rare, brands can elect to work with nano-influencers and brand ambassadors in exchange for free product.

But is it really “free”?

As we highlight in the infographic below, collaborating with social media influencers or brand ambassadors for unpaid activations is one way to reach social media audiences, but unpaid influencer marketing tactics come with hidden costs of their own.

Working With Brand Influencers: Paid Or Unpaid Influencer Marketing?

Unpaid Influencer Marketing Compensation Options

As the cost of working with social media influencers climbs—the world’s most followed influencers can now command around $100,000 and up to $550,000 for a single post —budget-conscious brands have the option to work with nano-influencers. In doing so, brands opt to compensate these influencers via alternative payments including:

• Free gifts
• Complementary products
• Access to events
• Vacations
• Pro bono services
• Publicity and promotion

Unpaid Influencer Marketing With Nano-Influencers

As nano-influencers have small followings between 1,000 and 10,000, they have less power to demand steep fees when working with brands. In fact, most nanos are perfectly content to work with brands in exchange for product gifts or other perks. This low upfront investment translates into a solid return-on-investment (ROI) for brands in addition to gaining exposure to highly engaged and niche communities.

Hidden Costs Of Unpaid Influencer Marketing

Despite the seemingly low expenses with unpaid influencer marketing sponsorships, nothing comes for free, right?

Brands like Daniel Wellington have reached millions on Instagram through unpaid partnerships, but this level of success should not be considered the norm. By definition, unpaid influencer marketing campaigns allow the “sponsoring” company little or no say in the brand messaging or finalized content. Brands can request that the influencer follows certain criteria, but without a written agreement or payment incentive, they have no leverage if the influencer goes rogue. Brands run the risk of being ghosted by an influencer, meaning they send a product sample and the influencer doesn’t uphold their end of the bargain.

Unpaid influencer collaborations are not easily measurable, thus the effort needed to discern any positive outcome from the social media marketing efforts might not be worth the investment of time. This is especially true for brand awareness campaigns.

Risks Associated With Nano-Influencers

Brands incur include the following risks when using unpaid influencer marketing tactics:

• Less Control Over Messaging: Little control over content, brand talking points, creative integration, or call-to-action (CTA).
• FTC: Campaigns can be flagged by the Federal Trade Commission (FTC) for improper disclosure.
• No Contract: No or overly informal contracts are used when working with influencers.
• Lack of Measurement: Reliable metrics aren’t available, meaning campaign performance is difficult or impossible to track.
• Nonexistent Review Process: Companies can’t require review of content before publication.
• Nonexclusive: No guaranteed exclusivity.
• Fewer Top Influencers: Typically excludes the ability to work with top influencers because they will always charge a fee when working with a brand.

Paid Influencer Marketing Benefits

For companies that desire more control over their influencer marketing investments, working with social media influencers through contracted, well-designed campaigns can help ensure positive outcomes for all parties. Also, instead of attempting to find, contact, and coordinate with influencers themselves, many major brands work with influencer marketing agencies that have experience executing campaigns with top content creators.

By leveraging paid influencer marketing, brands reap the following advantages:

• Brand Messaging: Influencers are compelled to use brand copy points.
• Content Review: Companies can review material, provide feedback, and make changes before publication.
• FTC Adherence: Disclosure is required by law, FTC guidelines are clear and unambiguous.
• Detailed Contracts: Brands may specify contract length, terms, and clauses that protect all parties.
• Tracking KPIs: Campaign metrics are well-documented with the use of tracking links and other tactics to measure performance.
• Exclusiveness: Brands can require exclusivity, meaning influencers can’t partner with brand competitors.
• Top Influencers: By paying influencer fees, brands will be choosier. A larger budget enables brands to work with more popular social media influencers who have a larger following.