The influencer market is touted to soon be a billion-dollar market. With the ability of various influencers to influence different markets and encourage users to make sales, their importance can not be overemphasized.
Influencer marketing has been on the rise for the past few years and is soon to eclipse ad marketing campaigns. There are apps offering no ad subscriptions, and the use of ad blockers on mobile and desktop devices is more widespread than ever.
As of 2019, popular influencer Kylie Jenner charged at least $1 million per sponsored post on her Instagram page.
You must be thinking that’s a lot of money just for posting a picture on Instagram, right? Well, that’s what you get when you have a large enough following and know how to play your cards right.
Other influencers who have attained this similar status include Cristiano Ronaldo, who is currently the most followed person in the world. Back in 2016, he boosted Nike’s sales by a considerable amount—so much so that it increased their profit margin for the year.
Such is the effect of great influencing.
Influencer marketing 101
Now, not all businesses can afford to drop hundreds of thousands of dollars each time they have a new product to roll out. In fact, a majority of businesses can't survive that. And this is perfectly okay. There are influencers for different prices.
So when choosing an influencer, you need to think about your budget, product, demographic, and the audience your influencer appeals to. You can’t choose a shoe influencer to promote your jewelry business.
Pricing an influencer doesn't have a formula that is set in stone. It’s one of those things that you just have to pick up along the way and learn from your mistakes.
That being said, we’re going to look at some of the things you need to consider when you price an influencer.
Before you even start looking for one, the first thing you need to do is know what you want—your vision.
Having an end goal is what shapes your social media strategy. There are a few common goals brands have when searching for an influencer, such as:
Conversions and sales: This involves getting an influencer to showcase your product in an appealing way that would inspire people to purchase it. E.g., Ronaldo showing off a pair of Nike boots and saying it helps him shoot better.
Content creation: The majority of brands have issues when it comes to creating content and crafting stories to showcase their products. This is where influencers shine.
Once you’ve decided what your end goal is, you can begin the search for an influencer and price them to fit your budget.
Pricing your influencer
Here are 3 things you need to know about pricing influencers:
1. Follower count
This is one of the more obvious factors you need to consider when choosing an influencer. Influencers range from micro-influencers (1-50k followers) to full-blown celebrities (1 million followers and above).
In general, the more followers an influencer has, the higher the cost. But choose your strategy wisely.
For local businesses, you can get 10 micro-influencers for the same price as one macro influencer. For businesses with a wider reach, micro-influencers will not influence your sales that much because of their limited reach.
2. Influencer niche
Knowing what niche your influencer belongs to is incredibly important when choosing and pricing one.
You need to know the market in which you want to work in. Some niches are more expensive than others because of how hard it is to attract and convert potential customers/clients. For instance, you can easily find influencers to promote your makeup brand. But if you need a pet-friendly influencer who can promote dog food, your task becomes a bit more challenging.
The more unique the niche, the higher the cost of influencing in that niche.
3. Quality of content
Now it’s not enough that your influencer has thousands of followers. The question is, can they create quality content that resonates with that audience? You don’t want to pay thousands of dollars and get back sub-par posts that won’t look good or fit your brand’s standards.
Take a look at their portfolio and previous works to give yourself an idea of the type of content they put out. Do they upload haphazardly or do they take their time to properly create a sponsored post?
Instagram is an app based on photos and videos, so it should not be a surprise that better quality works take the cake when it comes to content.
A solution to an influencer who has poor quality content is to provide the content you want them to promote and pay a lower price.
4. Engagement rate
Having lots of followers is just half the job. You need to make sure that these followers are actually engaging; if not, it’ll all be for naught.
With Instagram’s new algorithm, if your posts don't get enough interaction within the first few hours of posting, they will show up less often in the feeds of your followers. This is why someone with up to 50k followers will average just roughly 2k likes per post.
For each influencer, check the engagements per post before engaging them. This will give you a better understanding of how to price them.
5. Quantity of posts
This is still an experimental metric to track when pricing an influencer but it's one all the same.
Quantity is sometimes important on Instagram. About 70% of posts go unseen, and why? Well, because of the Instagram algorithm. While we're not certain about how it all works, what we do know is that more is better.
When pricing your influencer, try to get the maximum number of posts out of them. This will help your brand increase visibility because of the higher chances of your brand being seen by the influencer’s followers.
One flexible point about influencer marketing is that you can always bargain. Bargain with that influencer who has high followers but low engagements. Bargain with that influencer who's operating in an oversaturated niche. And even bargain with that micro-influencer that has just under 4k followers.
You don’t always have to bargain regarding money. Some influencers are willing to collaborate for other forms of compensation. Some would settle for the exposure and others can do it for the free products.
Consider all these factors when pricing an influencer and you’re all set to go.