Trying to decide what to pay an influencer can be extremely difficult. While there are no standard formulas, there are key metrics to guide you. Let’s look into five that can help you negotiate your next partnerships confidently.
A creator’s follower quality is extremely important. Here are a couple areas to look into.
You will also want to look at an influencer’s audience in the specific market you are trying to reach. If an influencer is based in Spain, but has only 25% of their audience in Spain and your product is only sold in Spain, you may want to share that information with your partner and negotiate based on the target consumer.
Engagement rates and view rates are powerful metrics to refer to when negotiating influencer compensation. It helps marketers move away from paying influencers purely based on audience size, to a model that rewards influencers for the impact they have on your brand. Focusing on engagement will result in more value for your investment.
There is a lot of nuance here too. Make sure you look at these rates on different platforms, and compare results for organic content vs sponsored content.
Influencer marketing platforms like Traackr even provide budget calculators based on a combination of followers, engagement, past performance, and more to recommend compensation for sponsored and organic content.
Follower count is one of the most popular ways to determine influencer rates, but it should not be taken alone. I would encourage you to combine an influencer’s audience number with the other metrics in this list to get a full picture of the value their partnership could bring to your brand. There are 6 main types of influencers (although names can vary slightly):
Remember, it’s important to avoid using follower counts as a standalone metric for calculating rates because it lacks nuance. For example, platforms like TikTok are designed for content to go viral and reach far beyond someone's followers. Because of this, relying on the number of followers alone may not give you the most cost efficient partnerships.
Another thing to keep in mind is that each influencer tier can impact the various stages of the funnel differently. VIP and top-tier influencers are often great at generating awareness (video views, impressions, engagements), but they may not be the best at driving sales. Meanwhile, smaller tiers like mid and micro influencers may have less reach but might be more effective at driving sales. All of these elements should be taken into consideration when calculating budget.
Tip: Consider the difference between audience size and audience reachability. What percentage of the influencer’s followers actually see, or interact with their posts? Your influencer marketing platform should allow you to see their audience reachability.
Past performance is an important indicator of how that influencer’s content will work for your brand.
For potential partners, collect information such as:
After you have gathered information about the influencer’s performance, you need to align with your own budget. One way to help your brand make decisions about which influencers to invest in and at which level is to establish target cost-per-engagement (CPE) and cost-per-view (CPV) metrics.
By combining your assessment of an influencer’s predicted performance with your potential budget, you can determine if the potential partner aligns to your budget.
Because of all the factors that go into influencer rates, it can be hard to nail down a budget for your influencer marketing campaigns. Here are some tips to help you estimate your spend.
Even if you are unsure that you will pursue an influencer partnership, there is still value in reaching out to them. This can give you an opportunity to learn more about the influencer, and collect their rate to continue adding to your understanding of current rates.
Don’t forget to budget room for usage rights, white listing and content amplification (or boosting). Influencers are creators. If you can find the right partner, they will be making beautiful content for your brand that your audience will love. You’ll want to make sure you understand the costs, and have a budget set aside to take full advantage of that content if say… it goes viral!
Long term partnerships can be beneficial to both the influencer and the brand. If a creator is really hitting the mark for your campaign, think about expanding to a longer-term contract. This can be beneficial in many ways.
The platform and content format can drastically affect influencer rates. Make sure the rates you are receiving are broken out by these categories. Keep in mind that the more in demand, or time intensive that platform or format is, the more it will cost. A TikTok video is now usually more expensive than an Instagram feed post.