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Tips & Guides — 13 Jun 2022
Decreasing influencer marketing costs with partnerships
More and more brands are relying on influencers to boost their marketing campaigns. Undoubtedly, this is a good sign and opens up space for profitable partnerships. But when the demand for supply increases, prices tend to rise.
Influencers have become a huge trend in brand campaigns. Thus, marketers already see them as indispensable to their strategies to promote a product or service. Despite the favorable scenario, brands often face higher prices than expected or have difficulties establishing the costs to team up with an influencer.
The prices charged by influencers can vary greatly depending on the platform and tiers, for instance, defined by the number of followers. If you are looking to understand more about the topic, this article will discuss the key challenges brands and marketers face with influencer marketing to know how pricing is set.
The prices consider the amounts typically charged by influencers to promote campaigns or actions desired by brands. However, it does not take into account the effort and time spent by digital marketers to find and partner with influencers. Generally speaking, the budget for influencer marketing comes out of their marketing spend and efforts, and 49% of companies spend less than $10,000 on influencers. Only 8.6% can spend up to $500,000.
Another point to consider is the prices set for each social media channel. On YouTube, for example, we can observe that the average cost is between $50 and $100 per 1.000 views. On Twitter, a mega-influencer ( 1M +) charges about $2.000 per tweet, while on Instagram, the same category can charge up to $10.000 per sponsored post. The table below shows the costs for influencers by platform:
Currently, about 50 million people around the world call themselves content creators or influencers, according to Signal Fire, which studied the economy of creators. That number is likely to rise as more and more people decide to become part of this field. Add to that the fact that other social networks are entering the market to compete with the big platforms and attract and make new influencers, as we see with TikTok.
We can say that the average social media influencer earns between $30.000 and $100.000 annually from product advertising. However, this amount can vary significantly depending on the number of followers and an influencer’s ability to bring desired results to a brand.
Understanding how influencers currently make money or how much they expect to earn helps brands and marketers better plan their expenses. Take into account that influencers who turn this into a career have several resources added to their final revenue. They work as affiliates, create and share content on more than one social media platform, make sponsored blog articles, and many have a digital product, among other things.
The market rose to $13.8 billion in 2021, indicating steady growth expected to expand to a colossal $16.4 billion this year. The past few years show that influencer marketing has grown dramatically. Pandemic has accelerated this growth in 2020 and 2021, and it is expected to continue in 2022, exponentially driven by platforms like Instagram, TikTok, Facebook, and YouTube.
Currently, Instagram is still the leading platform where brands search for and engage with influencers the most. In fact, the culture of being an influencer, which includes making money by sponsored posts, started when Instagram was launched on 6 October 2010. By that time, big celebrities started to join Instagram, and by noticing people wanted to see their life’s in posts and engaging with them, they began to look for ways to monetize their image.
The fact that Instagram has become the principal source for influencers brings new challenges for digital marketers for many reasons, including the difficulty of finding influencers and knowing if their followers are genuine.
Cases of influencers with large follower bases but who do not provide relevant results are not uncommon. For example, this famous influencer on Instagram with 2 million followers did not sell 36 t-shirts. Below, you’ll learn more about marketers’ main challenges when searching for an influencer.
Is it easy to find the right influencer for a brand by matching interests, viewpoints, and content? Well, not really. With so many social networks and options, more and more digital marketers are having a hard time finding influencers that are a perfect fit for their brand.
There’s also the number factor. Many brands are tempted to choose influencers based on the number of followers, but that’s not necessarily what the brand always needs. The result of not selecting the right influencers to fit with the brand is running unprofitable campaigns. Investing a little time and finding the right person will pay off in the long run.
Many social networks do not provide resources for brands to find influencers that align with their values and vice versa or to negotiate rates.
Instagram, for instance, is one of the top social media platforms for influencers, but it is also where digital marketers find the highest prices for advertising their campaigns. It became even more difficult for influencers since Facebook bought Instagram. Suddenly, the platform began to focus more on ads while influencers and content creators faced a lack of alternatives to profit. The only way to make money was through sponsored posts, which often increase influencer marketing costs, and not every company can afford it.
In this case, marketers must think about working with multiple channels instead of relying on only one platform. Beyond that, marketers need to know which kind of content is more suitable for the brand’s needs. For instance, an in-depth topic or a product that requires a user test is better illustrated in a video or a blog post rather than a sponsored post with images.
When calculating the cost, influencers must also consider other factors, such as the engagement rate, the budget, the campaign’s duration, and other specifics of the partnership. Many digital marketers can start by adhering to the rule of $100 per 10.000 followers, but the truth is that there is no standardization of the fees that influencers charge for their service.
So, one of the market’s current challenges is defining fair costs for influencer marketing. This is even more common with macro-influencers or celebrities, who usually charge high fees for each post they publish on social media. For instance, macro-influencers like @itsLivB, which has an estimated price per post, can range from $308.33 – to $513.88, which is quite expensive for businesses.
Instead, seek out or build partnerships with micro- (10k – 100k) or nano (0k – 10k) influencers and offer rewards previously defined by you, such as product samples and discounts. However, be careful how you define your goals. Some influencers do this as a profession, and money is still one of the main ways to pay for their work.
Unfortunately, fraud is everywhere, and influencer marketing is no exception. Research shows that up to 20% of influencers with 50,000 to 100,000 followers have purchased many followers, often out of a desire to gain social media exposure. As a result, about 15% of advertisers’ influencer marketing spend is lost to fraud, costing them $1.3 billion annually and representing a huge waste of marketing effort.
A digital marketer can identify these influencers by verifying certain aspects, such as a very high number of followers but no comments or signs of genuine engagement. Brands that want to avoid fraud need to thoroughly research the influencer before working with them.
Even if the number of likes and comments matches the number of followers, they can be gained through bot accounts. Marketers can employ several tools to discover or dive deep into the comment section and identify the fake accounts that like and comment on posts. For instance, Social Blade investigates the influencer and the rate of growth. Influencers that truly grew overnight are rare. An authentic influencer has an engaged audience that does not rise suddenly, but gradually.
Another point is the engagement rates. The general average is 6% to 12%. This means that an influencer with 1.000 followers will have at least 60 likes at an engagement rate of 6%. Finally, check the content. Unless an influencer is a major celebrity, getting thousands of likes and comments for bad or not meaningful photos and videos is almost nil.
To find the correct answers, marketers need to understand the environment of the social media platforms an influencer operates on and what type of content typically grabs the attention of their target audience.
It’s essential to find a suitable influencer because you invest in them while entrusting the brand’s name. Besides, brands that want to get good results when working with influencers need to give them creative freedom. Once the audience comes across content that naturally sounds like their favorite influencer, they are more likely to pay attention to their sponsored post.
Examine what factors led to a particular influencer gaining their audience. Did he teach them something, or did he become famous because of a scandal? All of this should be considered as your brand will be associated with an opinion leader.
Also, be realistic about the results you expect from an influencer. They are great for increasing brand awareness and even introducing new names to the market most of the time while building trust. The audience may be interested in the brand in question but may not necessarily make a purchase immediately after hearing from an influencer.
As we talked about before, influencers are a key element of a marketing strategy. However, they are still a challenge. So, if there’s no single rule that applies to all influencers, how can brands set the right price and still compensate influencers fairly for their work?
One way is to rely not only on the number of followers but also on an influencer’s engagement rate and other factors, such as the type of content and access to a niche audience. Costs, such as a special photoshoot, are also a factor; after all, this is part of the influencer’s job. So the final price suggested by Hootsuite is:
Engagement rate per post + extras for type of post (x #of posts) + extra factors = total rate.
Basically, your brand’s goals should also be considered when choosing the ideal influencer. For brands aiming for high awareness, the number of followers and engagement rate is significant because there is no point in having numbers that do not represent action.
If you want access to a specific audience, micro-influencers may be more relevant, as they usually have a closer relationship with their followers. Finally, pay attention to engagement rates, especially if you want to get conversions. Add up all the factors that go into a post: likes, comments, clicks, and shares, divided by the number of followers and multiplied by 100.
As you may have noticed in this article, the influencer marketing market is still based on numbers and divides influencers into different categories. However, this metric is not always able to account for the complexity of the topic and leads to many of the challenges mentioned above: difficulty in finding the right influencer, dependence on social networks which have their own rules, challenges in defining accurate prices, and, in the worst case, fraud.
Above all, what makes marketers’ jobs even more complex is the lack of predictability. Even if a brand can and will pay thousands for an influencer or celebrity on social media, it is not guaranteed to reach the expected audience. In addition, marketing budgets are often wasted on oversaturated channels, which makes it impossible to compete effectively.
By learning about the principles of outbound-based marketing, you can make influencer marketing expenses and returns much more predictable by paying for actions, instead of focusing on numbers.
For instance, micro- (10k – 100k) or nano (0k – 10k) influencers usually deliver good results despite a smaller number of followers, as they strive to provide content that matches the tastes of their target audience, and, above all, are more affordable. Trust, you need only pay for the desired actions.
One of the most common ways to work with outbound-based marketing is by establishing partnerships. After choosing your partners, you’ll pay only for desired actions, which lowers the expenses. Moreover, partnerships allow brands to test a multichannel strategy by employing several channels at once and avoiding wasting their resources.
Changing your approach to your currency marketing campaigns won’t happen overnight. For marketers used to performance metrics, the shift to outcome-based marketing could be challenging. We, therefore, recommend that you explore this topic further in our eBook.
Influencer marketing is growing every day, providing new opportunities for marketers who want to expand their brand and people just starting in this area. With competition increasing between platforms for people’s attention, one way to reap the rewards is to establish long-lasting partnerships with influencers and marketing partners.
This model also allows new businesses and marketers to pay for meaningful results instead of counting numbers. Consider a platform that helps you do this, such as Affise Reach, which facilitates partnerships with influencers who want to work as affiliates. The platform allows brands and digital marketers to find influencers more efficiently and connect with them directly.
Reach also makes it possible to find the right partner that stands out and build long-term partnerships without constantly searching for new influencers. This allows brands and marketers to discover influencers interested in promoting their products within set targets and reward their influencers accordingly each time new targets are reached.
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