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How much influencer should be paid?

When a company plans its budget for influencer marketing, the question arises: how much to pay influencers? It depends. As influencer marketing generates results for brands, influencers have become adept at getting higher commissions for the work they do for brands. The price a company pays an influencer for participating in an advertising campaign is based on six characteristics. 

Number of followers

The size of an influencer’s followers determines the coverage offered by brands. Influencers with a large number of followers allow companies to make their brand known to millions of people. That is why influencers with a large number of followers charge companies high commissions.  Depending on the industry and objectives, a company might split its budget to pay micro-influencers who can help target segments of its target audience. 

Influencer engagement and performance

Brands should look for influencers whose audience is engaged by their content. Broad coverage could generate impressions. Engagement is a metric of an influencer’s potential to drive people to buy a company’s products. If a company wants influencers’ followers to post comments, share posts and click on posts published by influencers, they should spend more on influencers with a very high engagement rate. 

Social media platforms

Influence rates change according to social media platforms. When a company calculates how much to pay influencers, it should consider the time and effort to create the posts. For example, a ten-minute YouTube video takes longer than a 30-second story. In general, influencers adjust their price according to the type of format linked to a specific social media outlet.

type of campaign

The results of a company’s online campaign influence how much influencers should be paid. For example, one story on Instagram does not require the same time and effort to create three Instagram Reels. The quantity and quality of content affects influencers’ commissions. 

If a company expects a longer engagement from an influencer, an influencer’s commission might increase. 

The exclusivity

If companies want an influencer to refuse other collaborations to work with them exclusively, they should expect to pay more. Depending on the type of exclusivity agreed with the

companies, influencers will have to establish a higher commission with the companies.

Properties

If a company wants to have influencer content or the right to reuse it on other channels, it should expect additional costs. Paying extra to have influencers’ content available for a certain period of time could be a worthwhile investment because reusing influencers’ content on paid channels can generate more results for brands. 

Calculating Influence Rates

There are some guidelines used in the influencer campaign industry that can help companies calculate a fair price to offer influencers. The price could be $110 per 10000 followers.  As more and more companies work with influencers, they face competition to work with influencers who have a large number of followers. Popular influencers are in high demand and consequently brands have to offer an attractive payment to secure a collaboration. 

Choosing a compensation model

Companies can use the above information to calculate a fixed fee for the collaboration of an influencer. Pricing based on an influencer’s performance could minimise the risk of overspending, because a company will only pay for actual results. 

Pricing based on performance

Companies set prices based on certain KPIs related to their online advertising campaign. Also the number of clicks, the number of conversions, etc. Each influencer will be paid according to their performance. 

Revenue sharing and affiliation

This model works if the objective of an online advertising campaign is to increase sales via promotional codes or affiliate links. Influencers are paid a % of the revenue they generate for a brand. Influencers are paid according to the number and value of sales they produce during an online advertising campaign. Determining how much to pay an influencer is an important decision when planning the influencer marketing budget for a company.

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