Digital marketing professionals are treating influencer marketing—a burgeoning industry that’s set to reach $5-10 billion by 2020—more and more like its own media channel. In fact, two-thirds of marketers planned to increase their influencer marketing budgets in 2019, with 17% of companies deciding to allocate over half their marketing budget for influencer marketing.
That said, marketers have struggled to ascertain the cost of influencer marketing. This is because the industry is still in its infancy and influencer rates are disclosed sparingly. The growing issue of fake followers and inauthentic influencers have also contributed to fluctuating influencer rates.
Through careful execution and measurement of our own influencer marketing strategies, we at Mediakix have identified trends in influencer rates for the past four years. We’ve also taken note of the various factors that commonly dictate the cost of working with influencers.
Influencer Rates Have Increased Over The Years
Influencer rates have climbed an average of 50% per year since 2017. We calculated this percentage based on a set of trusted influencers that Mediakix has worked with over the years. These influencers represent varying tiers, categories, and pricing levels.
Between 2016 and 2017, influencer rates increased 47%. A year later, the average rate jumped 60%, and between 2018 and 2019, it went up 53%.
This year-over-year trend can be attributed to several factors, and it does not mean that the price of influencer marketing will increase indefinitely. Many marketers, in fact, are opting to work with lower-tiered, cost-effective influencers or are optimizing their influencer strategies to spend more efficiently.
What Challenges Do Increasing Influencer Rates Pose For Marketers?
Rising influencer rates is a trend that’s to be expected—influencer marketing is a rapidly evolving industry that continues to gain traction across numerous business verticals. Influencers have honed their craft and influencer strategies have become more sophisticated, driving up demand. This gives influencers the control to hike their rates.
Increasing influencer rates is feared by marketers—so much so that nearly 40% of U.S. marketers agree the rising cost of influencers is a leading challenge in the space. This turbulent pricing model poses a major pain point to marketers who are trying to harness the power of influencers. Measuring ROI is already difficult, and the fact that rates are on the rise is enough to cause concern amongst marketers on a budget.
In order to combat increasing rates, marketers and influencers should prioritize influencer authenticity. Partnering with influencers who represent your brand’s values and who truly back your product or services as opposed to one-off, transactional engagements will ensure their audience responds well. It will also help stabilize influencer rates and generate positive ROI.
10 Factors That Affect Influencer Rates
There’s a host of factors that can determine how much an influencer charges. It’s rare that an influencer charges a flat rate. One travel influencer said in an interview with Digiday, “Everyone now can set their own rate based on what they are able to get,” meaning influencers charge in a manner similar to any business offering a service.
While not an exhaustive list, the following should be taken into consideration to calculate influencer rates:
- Social Channel – Will the influencer publish sponsored content on Instagram, YouTube, or some other social channel? Depending on the social channel, the format, messaging style, audience type, creator resources, and other factors will vary. Influencers may have a flat rate no matter what platform they post on, but many alter their rates accordingly.
- Size – How many followers or subscribers does the influencer have, and how many will they potentially reach? Influencers with massive followings typically command higher rates, while influencers with more modest fan bases will cost less. This is not always the case, but more impressions generally translate to higher cost.
- Engagement Rates – How much engagement does the influencer generate on organic versus sponsored content? A mega-influencer may have more followers, but how much of their audience is meaningfully interacting with their content? Don’t sacrifice quality for quantity.
- Category – What category does the influencer specialize in (e.g. fashion, lifestyle, family)? Popular niches such as fitness or beauty tend to have more influencers available, making their category more competitive. Less popular areas, such as tech or gaming, may be pricier because their area of expertise is hard to come by.
- Content Format – What type of content will the influencer create (photo, video, Story, blog post, etc.)? Based on the format of the sponsored content, influencers will spend varying degrees of time and resources to create it. The more time and resources used to produce the content, the more it will usually cost. The lower the input, the lower the cost. Also consider the value derived from specific types of content. For example, an in-feed Instagram post might get buried within user’s feeds. A Story, however, may entice viewers to convert right away.
- Campaign Deliverables – How much content will influencers have to create? Is it a one-off campaign in which the influencer publishes a single sponsored YouTube video, or will they publish a series of videos featuring your product over a longer period of time? Some campaigns require bigger time investments and more deliverables, whereas some are simpler and take less time to execute.
- Seasonality & Demand – Is your campaign seasonal and how in demand is the influencer you want to collaborate with? Q4 (think: holiday promotions and prep for new year) typically comes with the highest demand, driving up influencer rates. Additionally, in-demand influencers can command higher fees.
- Reuse & Licensing Rights – Do you plan to reshare or repurpose the influencer’s sponsored content? Some influencers may charge more for your brand to reuse their content. Don’t forget to outline these terms in your influencer contract.
- Exclusivity – Do you want the influencer to sign an exclusivity clause that prohibits them from promoting competitors for a set period of time? If so, consider the fact that influencers who agree to this are eliminating another potential source of income, especially if they’re in a competitive niche. This element can jack up the price of an influencer engagement.
- Production Costs – Will the influencer have to factor in production costs (e.g. video equipment, editing software, etc.) to ensure professional quality? Remember, low effort normally means lower cost relative to a collaboration that requires high effort. If an influencer is expected to produce a high-quality video, the influencer will need top-of-the-line equipment, a professional videographer, more detailed editing process, and any other elements necessary to professionalize the end product. If so, expect the influencer rate to rise.
Estimating Influencer Rates With Influencer Tiers
Ever find yourself asking, “How much do Instagram influencers make per post?” Marketers can use influencer tiers to bucket creators by relative price ranges. Tiers represent brackets of influencers depending on their number of followers. We’ve broken down influencer tiers for Instagram—the channel rated the most important for influencer marketing strategies in our 2019 survey.
- Nano-influencers – 1,000 – 10,000 followers
- Micro-influencers – 10,000 – 50,000 followers
- Mid-tier influencers – 50,000 – 500,000 followers
- Macro-influencers – 500,000 – 1,000,000 followers
- Mega-influencers – 1,000,000+ followers
Knowing the reach of an influencer is not a hard fast way to determine Instagram influencer rates, but it does give marketers an idea of what price tag to expect.
How Much Do Instagram Influencers Cost By Tier?
We can break down Instagram influencer rates into the six influencer tiers:
Naturally, as influencer tiers progress, influencer rates also increase.
- Nano-influencers – Free products or nominal amounts of money (up to $500).
- Micro-influencers – A couple hundred to a few thousand dollars ($200-$4,000).
- Mid-tier influencers – Anywhere from a couple thousand to ten thousand dollars ($2,000-$10,000).
- Macro-influencers – A few thousand to several thousand dollars ($5,000-$25,000).
- Mega-influencers – Several thousand to hundreds of thousands ($10,000-$150,000).
- Celebrities – Several thousand to several hundred thousand dollars ($20,000-$500,000).
How To Find Influencers Within Your Brand’s Budget
In order to identify influencers that won’t break the bank, brands should first determine their influencer marketing budget. Without knowing how much you’re willing to spend on influencer marketing efforts, it will be more difficult to find influencers within an affordable price range. To find influencers within your budget, brands can:
- set influencer marketing goals and develop a strategy
- leverage influencer discovery tools
- partner with an influencer marketing agency
Determine Your Brand’s Influencer Marketing Goals & Strategy
Influencer marketing budgets often stem from your brand’s goals, as well as the strategy you employ. Perhaps your goal is brand awareness, so achieving social engagement and earning new followers are important KPIs. Or maybe your sole objective is to drive sales. Your influencer marketing strategy will vary depending on your campaign goals. Once you’ve established your goals and strategic plan, you can move forward with identifying influencers appropriate for your brand’s budget.
Use Influencer Discovery Tools
By leveraging tools, such as influencer databases or free discovery resources, brands can pinpoint influencers who are better financial fits. Influencer databases give marketers the ability to research reputable influencers using filters and other search parameters. This can help ensure your brand spends within your means.
Work With Experienced Agencies
Another alternative is working with an influencer marketing agency, such as Mediakix. An agency strategizes, executes, and manages influencer marketing campaigns and boasts unmatched expertise in the space. Agencies also have insights into influencer rates due to their working relationships with trusted influencers. In effect, agencies are experts at budgeting for campaigns of all sizes and will help your brand find influencers within your budget.
How Do You Know If An Influencer Rate Is Reasonably Priced?
As mentioned earlier, influencer rates can be unpredictable. Below are a few ways marketers can best determine if an influencer rate is fair:
- measure return on influencer marketing investment
- evaluate previous campaign performance and influencer rate cards
- consult our industry influencer rates chart for price guidelines
Influencer Marketing ROI
By understanding how to measure influencer marketing ROI, marketers can better assess if the price was worth the results. ROI is the percentage of each dollar invested that will yield a profit. Start by asking, “Did my campaign drive positive ROI?” Positive results can mean you simply achieved your goals, but it technically means you spent efficiently.
For example, a campaign that drums up temporary buzz around your brand may not be worth the cost of working with an expensive influencer and all the associated costs that come along with it if it doesn’t translate into tangible value. But a campaign that sustains long-term benefits, like immediate sales and lifelong customers, is likely worth the investment.
Previous Campaign Results & Influencer Rate Cards
If you’re tasked with deciding whether an influencer rate is justified before moving forward with them, do some extra research into their past branded collaborations to see what kind of results they generated. If they’re well-known in the space and can provide insights into previous campaigns, you should be able to judge if their rate is reasonable.
It’s also a good idea to request an influencer rate card—something many influencers will have prepared for advertisers. Once you’ve compiled enough influencer rate cards, you’ll begin to understand and anticipate the going rate more successfully.
Industry Influencer Rates
You can also use our influencer rates chart that breaks down cost by influencer tiers as a general guide. A rate that seems suspiciously out of line from these guidelines can be a red flag. Unless there’s a good reason (e.g. the influencer has agreed to strict terms and conditions and will have abnormally high production costs), influencer rates should typically fall into the ranges we’ve outlined.
In the end though, influencer rates will continue to shift amid the changing tides of the influencer marketing industry—and there are always outliers. Depending on a myriad of factors, influencers will charge at their discretion. It’s up to marketers to use their best judgment to strike a fair deal.
To best position your brand, establish various influencer relationships, run diverse influencer campaigns, and measure the ROI of all influencer efforts. Better yet, learn how our team of experts can help your brand generate ROI with top influencers here.