Navigating the Tricky World of Influencer Compensation
Influencer compensation and how it is determined has been a hot-button issue lately. If you’re new to the industry, the different compensation rates can seem random. You’ll find very little consistency across follower ranges or content verticals. Each influencer wants a different rate. This can be overwhelming for brands trying to initiate and manage influencer campaigns. First things first, influencer marketing is not a media buy. If you’re trying to justify influencer marketing spend the same way you measure TV, radio or billboard buys, you’re going to come up short handed. Make sure that you’re ready for influencer marketing.
Ok, you’re ready? Good, we thought you were.
Influencer marketing is not a media buy-- it’s a creative process that is unique to each program. Much like other creative roles, there are a lot of variables that go into setting the price. Think of it like commissioning a painting from an artist. You’ve got to deal with each person individually. For the sake of simplicity, there are a few main factors that play into compensation: who you are, who the influencer is, and the content ask.
Who Are You?
When you come knocking on an influencer’s door, the first question they’ll want to know is “who’s asking?” Having lots of name recognition is usually helpful for a brand. Influencers want to build up a list of great brands they’ve collaborated with. This can help legitimize the influencer’s presence in the world of advertising. Your brand plays a big part in the determination of compensation, but it’s not always cut and dry.
A smaller influencer may want to work with a big brand and so will settle for a smaller compensation because of the value they derive from the partnership. Conversely, large brands can be a turn-off for influencers who are cautious about branded content in their feeds-- big brands are recognizable and may come across as inauthentic so they may charge more per post. The ultimate factor is lifestyle match. If the influencer is a perfect lifestyle match for your brand, they will probably be excited about the partnership and willing to negotiate. Your job is to convey the brand values, goals of the campaign, and the reason that you think each influencer will be a good fit.
Who is the Influencer?
There are a few factors that you need to take into account when evaluating an influencer. Reach is the easiest and most apparent. However, you cannot reliably determine compensation (or value) based on reach alone. An influencer with 30,000 followers may charge more than an influencer with 1 million followers. In general, larger following will require higher compensation. Next, you should think about engagement, influencers whose photos spark lively conversations and may help reveal brand sentiment or other learnings for your products will be more expensive than influencers who simply post a photo and get little interaction. But remember, not all engagement is equal. The final factor you should take into account is quality. Will this influencer create a unique and appealing photo or video for your brand? Will they take time creating the content, dreaming up interesting ways to incorporate your products into their life? Some influencers even have to pay professional photographers to shoot their content, so that cost per photo may get passed on to you. Higher quality content will cost you more than a haphazard selfie with your bottle of juice, piece of candy or tube of lipstick.
What Content are You Asking For?
Your most important job is to be very clear about what content you are asking for. The more you have outlined up front, the more likely it is that influencers will want to participate and the content you get will be higher quality. The most ideal way to conduct an influencer campaign is to set up the expectations up front, give lots of resources and examples and let your influencers post freely. The more you dictate content, the more expensive it will be to have influencers agree to post. Additionally, dictated or heavily controlled content is more likely to be deleted from the influencer’s feed because it is not authentic to their style. Another consideration is timing. How many posts are you looking for? Some big names won’t do single branded posts in their feed-- they only engage brands for longer term projects. Some influencers are just the opposite and will never post more than twice about a brand. The number of posts you’re soliciting from influencers will affect the price as will the timing. A post around Christmas is going to cost more than a post in the middle of January because there is tons of brand competition during the holidays.
The final pieces to think about with content ask and pricing are content rights and exclusivity. The main question you should ask yourself is “what am I going to do with the content created during this campaign?” Some campaigns are only looking for reach and engagement, the posts go live on influencer feeds and that’s the end of it. However, many brands are looking to repurpose influencer content for their own social media feeds and even paid advertising campaigns. If you plan to repurpose content from influencers, you’re usually going to have to pay more for that content and negotiate the content rights and usage up front. Influencers almost never transfer copyright for their work over to brands. However, most influencers are happy to make usage deals so that you can use the amazing content to promote your brand in other ways.
If you’re looking for exclusivity with an influencer, meaning that they agree not to post about your competitors within a designated time period, you’re gonna have to pay up. It is very reasonable to expect exclusivity within a photo (ie no other brands are promoted within the photo or caption promoting your brand) but any exclusivity beyond that can become expensive because you are paying for the potential loss of other brand deals that come up.
Understanding the ins and outs of influencer compensation isn’t easy, and it takes time. Each influencer is an individual and you learn the. Relying on the expertise of reliable partners like SEEN will benefit the programs you’re putting together. The key is communication and building a relationship with them.