Alongside an influencer’s chosen platform, several additional factors impact influencer pricing. You should consider each of these seven factors before you start to work out your ideal influencer budget.
An influencer’s size is arguably the most important factor, as it determines how far your influencer marketing will reach. As a general rule, there are four approximate influencer sizes:
The bigger an influencer is, the more you’ll have to pay them. Using an influencer marketing tool, like Sprout, helps you find authentic influencers who are the right size for your campaign and budget.
The length and complexity of the content required from an influencer will impact the total price. For example, a single image post by an Instagram influencer will cost you less than three separate Reels.
This is often determined by the influencer’s platform, but also the types of content they usually produce.
If your campaign is time-sensitive or requires multiple posts, you’ll likely need to pay more.
It’s always worth tracking your campaigns in a content calendar through an influencer management tool like Sprout, so you can keep strict timelines for campaigns and track delivery of every post.
An exclusivity agreement ensures an influencer isn’t simultaneously promoting your competitor’s products.
This is usually beneficial, as it means you’re not losing any potential customers thanks to a post about a different product. But it will likely come with an added cost.
You can agree to pay your influencers in different ways. Some popular examples include pay-per-post, pay-per-view or pay-per-subscribers.
It’s always worth outlining your goals for each influencer marketing campaign first, as this will determine which pricing model is the most beneficial.
If you’re planning a long-term campaign with an influencer, this will naturally incur higher costs.
Plotting out content in a single interface, and easily managing approvals, can streamline more elaborate influencer campaigns and help reduce campaign costs over time.
Some influencers have large followings across several different platforms. Working with someone like this can ensure your campaign takes advantage of multiple channels.
However, you’ll need to factor the cost of posting across several platforms into your influencer pricing agreement. If you’ve decided to work across several channels with one influencer, make sure they’re tracking metrics across every post.
How to budget your influencer marketing costs
As these many factors and platforms show, influencer pricing can spiral out of control if it isn’t handled appropriately. Here’s how you can invest sensibly in influencer marketing, allowing you to drive successful campaigns that don’t become excessively expensive.
Define your goals
As with any form of digital marketing, successful influencer campaigns begin with clearly defined goals.
First determine the audience you’re looking to target. Then, outline the core aims you’re hoping to achieve with each piece of influencer marketing. Reliable goals can include:
- Building your brand awareness
- Improving your sales with a particular audience
- Increasing your follower count
- Generating new leads
- Furthering your social proof and community engagement
- Encourage more user-generated content
Ensure that you’ve clearly defined these goals before you start to search for an influencer, as they’ll gear you in the right direction.
Find the right type of influencer
You must source and work with the right influencer from the get-go to remain within your budget. Define the type of influencer you’re looking for and their audience as the first step in finding the ideal influencer.
For this step, it’s worth investing in a dedicated influencer marketing platform. Tagger by Sprout Social offers over 50 search filters designed to help you find authentic influencers that match your brand’s core values.
This reduces the time and costs associated with sourcing influencers early in your campaign.
Refine your value proposition
The influencer-brand relationship is a unique one. It’s important to remember that all influencer agreements should be mutually beneficial. Just like you, influencers also deserve to work with brands who value their time and creative effort, and offer them benefits in return.
At this stage, you can control your budget by refining your value proposition for influencers.
Consider what your brand can offer them, and work this into your approach. This might involve event invites, free merch or promotion on your account.
By treating influencer marketing as a two-way street, you’ll craft stronger relationships that result in successful campaigns.
Calculate ROI
ROI (return on investment) is the most important metric when considering influencer pricing. It clearly tells you whether the money you’re putting in is worth the expected result.
Apply this formula to calculate the ROI of a potential influencer campaign, as you’ll need it before you negotiate with an influencer.
(Total expected gain on investment – Cost of investment) / Cost of investment x 100 = ROI%
Remember to calculate it only after you’ve outlined your goals because your expected gain may not be strictly financial. It might also refer to increased trust in your products or other brand reputation boosts which are difficult to quantify.
Factor in operational costs
Influencer marketing can incur many creeping costs that eat up your budget.
To avoid this, discuss every aspect of production with your influencer before you agree to a deal, such as who is paying for any studio time, travel costs or other people like editors or crew members.
An influencer may have factored these costs into their price already. But if they haven’t, and you aren’t aware, these operational costs can balloon quickly.
Establish a delivery schedule
Late projects can affect influencer pricing too. That’s why it’s worth defining a content delivery timeline so both parties are clear on expectations.
Make sure you’re creating a brief, sharing this with your influencer and tracking everything through a single interface like Sprout’s Influencer Marketing tool.
Track your metrics
Track your metrics during and after your influencer marketing campaign concludes.
Tracking performance during a campaign helps you understand how your audience is engaging with the content. It also gives you an opportunity to modify or pivot future posts based on the current performance.
Meanwhile, tracking metrics afterward shows how successful the campaign was, based on whether it met your goals.
Ensure you’ve determined the right metrics to track based on your campaign’s goals. And then review this data to figure out what’s worked and what requires improvement next time.
Start an affiliate program
By using an affiliate program, you can control costs to make sure you’re only paying influencers on a success-based system.
This also improves the value you get from influencers on your campaign. However, it’s important to agree to an affiliate rate based on each influencer you work with, as their requirements may differ.
Refine your budget over time
Much like with many other marketing strategies, influencer marketing is a strategy that thrives through experimentation.
Once you’ve worked with a handful of influencers, compare how each campaign went, and how you found the process of working with them. Ask yourself, how much do influencers make our company right now? Use this information to determine the ideal cost and result for your company moving forward, and then apply this in your next negotiation.
By continuing to refine your budget and your expectations, you will gradually improve the results of your influencer marketing across all social platforms.
Implement successful influencer strategies without breaking the bank
Influencer pricing is not always easy, but it can be mastered.
Treat any influencer you work with respectfully, while keeping a close eye on your budget and the returns on your investment. With experience and careful tracking, you’ll find the right formula for your budget and strategy.
As you experiment, use Sprout’s influencer marketing budget template to keep a birds-eye view of your influencer costs and to help better negotiate contracts moving forward.
