In 2020, influencer marketing become a $5-10 billion industry. Marketers are investing a lot of money in influencer collaborations to increase their brands’ visibility.
For anyone who is planning to leverage influencer marketing, the first question is about the cost involved.
How much does influencer marketing cost?
How much does an influencer charge per sponsored post?
Despite being commonly asked, these questions do not have clear answers.
The cost of influencer marketing is hardly ever talked about, and there is no standardization of prices either.
This can leave marketers confused about how to negotiate with influencers to reduce the cost of their campaign.
To help you, I am going to discuss a few factors that can help you determine the cost of your influencer marketing campaigns.
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Which Factors Decide the Cost of Influencer Marketing?
Influencers, who have just started their career, might agree to promote your brand for freebies or barters. Normally on social media. But if you want to collaborate with the top influencers in your niche, and create meaningful, authentic partnerships paying influencers is non-negotiable.
After all, they give you access to their audiences and put in time and effort to promote your products.
But how can you decide what the right price is?
Here are a few factors that can help you determine the real cost of your influencer marketing campaigns:
1. Campaign Requirements
The more work you expect from your influencers, the more you need to pay. This can get even more complicated on social media.
That’s a no-brainer. So, before you approach an influencer, make a list of requirements that you expect them to fulfill.
Certain influencer marketing campaign requirements can increase the cost of your influencer marketing.
For instance, if you want them to include backlinks or cover topics that require substantial research, be ready to shell out more money.
For sponsored social media posts, do you expect them to respond to comments?
Do you want the right to repurpose the content they create on social media?
If your answer is yes, you should know that the pricing will increase.
Similarly, for sponsored videos and blog posts, the length of the content can be a major deciding factor.
2. Social Media Platform
When it comes to social media marketing with social media influencers, not all social media platforms are considered equal.
With the success of IGTV videos, shoppable ads, and Instagram Story, Instagram emerged as the most popular social media marketing channel for working with influencers.
Image via Mediakix
Just like the popularity, the cost of influencer marketing on each of these channels is different.
As a general rule, the cost of leveraging popular influencer marketing on social media channels is higher due to the increased demand.
3. Number of Followers
Until a couple of years ago, the number of followers was the number one factor to determine the social media marketing cost.
The number of followers an influencer has gives brands insights into the amount of reach they can get in any social media marketing effort.
According to a report by Influence.co, sponsored post rates increase with follower growth.
The rates increase significantly when an influencer crosses the 100K follower threshold on any given social media platform.
Image via Influence.co
According to him, brands can quote $250 for a sponsored Instagram post to influencers who have less than 50K followers.
With the addition of each 100K followers, brands should add around $1000 per Instagram post.
However, if you are collaborating with celebrities or superstars, you need to pay way more.
For instance, Kim Kardashian, reportedly, charges more than $250,000 for one sponsored post on Instagram.
While influencers with a greater follower base tend to charge more, partnering with these mega influencers doesn’t always guarantee a successful campaign.
While the number of followers is an important factor, it isn’t the only one.
Some influencers inflate their following on social media. A great way to find out whether an influencer has real or fake followers is to look at the engagement on their posts. Especially on their Instagram Stories.
Genuine followers are likely to engage with the content an influencer creates. This is evident when you look at Instagram posts.
You can evaluate the engagement an influencer can help you drive by looking at the number of comments and likes on their posts.
To evaluate the engagement rate of an influential blogger, you should look at the number of views, comments, and social shares.
You can also check out the details about their blog traffic, bounce rate, and the average number of pages viewed per visit.
A higher engagement rate means that the influencer can help you generate better quality leads and more revenue.
This makes it obvious that you need to pay more to influencers who have engaged followings.
5. Website Traffic
If you want to collaborate with influencers for sponsored blog posts, you need to look at their website traffic.
The higher the traffic, the better chance you have to reach a bigger audience.
You should focus on the amount of organic traffic an influencer gets.
Decent organic traffic can help you gain a better ROI from your marketing campaign.
But this also means that you will need to pay influencers more.
6. Means of Communication
How are you finding the right influencers to partner with?
If you are reaching out to them via a talent agency, your need to increase your budget further.
All talent agencies take a commission to connect brands with the right influencers.
So, their fee is likely to add to the cost of your influencer marketing.
Influencers, who work with talent agencies, usually have a lot of experience in their industry. They also tend to demand a higher fee for their expertise.
7. Your Industry
Your industry and the product you are selling can also affect the cost of your influencer marketing.
Promoting luxury watches will definitely cost you more than promoting a brand of chocolate.
Generally, expensive products require bigger budgets because the influencer marketing cost is higher for them.
Sponsored post rates vary from industry to industry. Travel and entertainment are the most expensive industries for Instagram influencer marketing.
Image via Influence.co
How Can You Reduce Your Influencer Marketing Cost?
Influencer marketing can be economical and effective if you strategize your campaign well.
If you want to boost your digital marketing campaign ROI, you should try to reduce costs and maximize returns.
Here is how you can create a cost-effective influencer marketing strategy to reduce the cost of your digital marketing campaign:
1. Determine Your Campaign Goals
Before you reach out to influencers, make sure you have a clear idea of what you want to achieve.
Define your goals and KPIs clearly. This can help you manage your resources more efficiently.
Not just that, setting clear goals can also help you find and partner with influencers who best suit your influencer marketing campaign structure and business values.
2. Understand Your Target Audience
Understand who your target audience is to develop a successful influencer marketing strategy for your brand.
For instance, if you want to target millennials, you need to run a campaign on the social media platforms that they use the most.
If your audience is on Pinterest, but you choose to promote actively with YouTube videos on your YouTube channel, it’s a waste of money.
To use your influencer marketing budget efficiently, find out who your target audience is, what their interests are, and who they would trust.
3. Work with Micro-Influencers
A great way to keep the cost of your influencer marketing low is to collaborate with micro-influencers.
They might not have massive audiences, but their engagement rates are generally higher than most mega influencers.
They can help you engage and convert more people.
And the best part is that micro-influencers charge considerably lesser than more established influencers.
4. Repurpose Influencer-Generated Content
How can you get the most out of your influencer marketing budget?
Repurpose the content that influencers create for you.
This can help you increase the shelf life of your influencer-created content, ensuring that the content stays relevant even after a campaign gets over.
You can re-post the same content or change its format.
For instance, you can repost photos shared by your influencers with a unique caption. Or, you can also feature the posts you like the most on your brand’s profile.
For instance, Daniel Wellington picks up one photo every day and shares it with #DWPickoftheDay hashtag.
Image via Instagram
Another way to repurpose your influencer content is to write an article based on a video.
You can get as creative as you want with this strategy.
But remember, you should always ask for the right to repurpose influencer-created content before you begin the campaign.
You might have to pay them more, but repurposing content can reduce your advertising costs.
Ready to Start Your Next Influencer Marketing Campaign?
There are no standardized rates in the influencer marketing industry. A sponsored post can cost anywhere from $100 to $100,000. Meaning this can be difficult for a small business to pay for.
The cost of influencer marketing relies heavily on your industry, campaign goals, and the influencers you choose to work with.
You should consider all of the factors we’ve discussed above to determine the cost involved makes sense in running your influencer marketing campaign.
Which other factors can affect the cost of influencer marketing? Please share your views in the comments section below.