The influencer market is expected to be a billion dollar market soon. With the ability of various influencers to influence different markets and encourage users to make sales, their importance cannot be overstated.
Influencer marketing has been on the rise in recent years and will soon eclipse ad marketing campaigns. Some apps don't offer any ad subscriptions, and the use of ad blockers on mobile and desktop devices is more prevalent than ever.
In 2019, popular influencer Kylie Jenner billed at least $ 1 million per sponsored post on her Instagram page.
You must be thinking it's a lot of money just to post a photo on Instagram, right? Well, that's what you get when you have a sufficient number of followers and know how to play your cards right.
Other influencers who have achieved this similar status include Cristiano Ronaldo, who is currently the most followed person in the world. In 2016, he drastically increased Nike's sales to the point where it increased their profit margin for the year.
This is the effect of great influence.
Influencer Marketing 101
Now, not every business can afford to waste hundreds of thousands of dollars every time they have a new product to roll out. In fact, a majority of businesses cannot survive this. And that is perfectly correct. There are influencers for different prices.
So, when choosing an influencer, you need to think about your budget, your product, your demographics, and the audience your influencer is reaching out to. You cannot choose a shoe influencer to promote your jewelry business.
An influencer pricing doesn't have a set formula. It's one of those things you just have to learn along the way and learn from your mistakes.
That being said, we're going to take a look at some of the things you need to consider when pricing an influencer.
Before you even start looking for one, the first thing you need to do is find out what you want: your vision.
Having an end goal is what shapes your social media strategy. There are a few common goals that brands have when finding an influencer, such as:
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Conversions and Sales: This involves an influencer presenting your product in an engaging way that would entice people to buy it. For example, Ronaldo showing off a pair of Nike shoes and saying it helps him shoot better.
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Customer engagement
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Content Creation: Majority of brands have issues when it comes to creating content and creating stories to showcase their products. This is where influencers shine.
Once you've decided what your end goal is, you can start looking for an influencer and price it according to your budget.
Pricing your influencer
Here are 3 things you need to know about price influencers:
1. Number of subscribers
This is one of the most obvious factors to consider when choosing an influencer. Influencers range from micro-influencers (1-50,000 followers) to full-fledged celebrities (1,000,000+ followers).
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 a macro-influencer. For businesses with a broader reach, micro-influencers won't influence your sales as much due to their limited reach.
2. Niche of influencers
Knowing which niche your influencer belongs to is extremely important when choosing and securing one.
You need to know the market you want to work in. Some niches are more expensive than others due to the difficulty in attracting and converting clients / potential customers. For example, 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 gets a little harder.
The more unique the niche, the higher the cost of influencing in that niche.
3. Quality of content
Now, it's not enough for your influencer to have thousands of followers. The question is, can they create quality content that resonates with this audience? You don't want to pay thousands of dollars and scavenge for substandard posts that won't look good or meet your brand's standards.
Take a look at their portfolio and past work to give you an idea of the type of content they are putting out. Do they download randomly or do they take the time to properly create a sponsored post?
Instagram is a photo and video based app, so it shouldn't come as a surprise that better quality works take the cake when it comes to content.
One solution for an influencer who has shoddy content is to deliver the content you want them to promote and pay a lower price.
4. Engagement rate
Getting lots of followers is only half the job. You need to make sure these followers actually engage; otherwise, it will all be for nothing.
With Instagram's new algorithm, if your posts don't get enough interactions within the first few hours of posting, they'll appear less often in your followers' feeds. This is why a person with up to 50,000 followers will average around 2,000 likes per post.
For each influencer, check the engagements by post before you engage them. This will give you a better understanding of how to assess them.
5. Quantity of posts
This is still an experimental metric to follow when pricing an influencer, but it is one nonetheless.
Sometimes quantity matters on Instagram. About 70% of messages go unseen, and why? Well, because of the Instagram algorithm. While we're not sure how it all works, what we do know is that more is better.
When pricing your influencer, try to get the most out of posts. It will help your brand to increase its visibility due to the higher chances that your brand will be seen by the influencer subscribers.
Final thoughts
A flexible point about influencer marketing is that you can always negotiate. Negotiate with this influencer who has lots of followers but few commitments. Negotiate with this influencer who operates in an oversaturated niche. And even negotiate with this micro-influencer who has just under 4,000 subscribers.
You don't always have to haggle for money. Some influencers are willing to collaborate for other forms of compensation. Some would be happy with the show and some can for the free products.
Consider all of these factors when pricing an influencer and you're good to go.