It can be difficult to know how much budget to allocate to Influencer partnerships, for businesses looking to grow on social media, particularly Instagram. With factors like an Influencer’s following count, engagement rate, project scope, production costs, it clearly is challenging to put a fair price for a branded partnership. The cost of influencers is increasing in equivalence with their rising demand.
According to Influencer Marketing Hub, the social media collaborations and sponsorships not only have replaced traditional ads but also have grown from a $1.7 billion industry in 2016 to continue its upward movement to a $5.6 billion industry. These collaborations and sponsorships have become a huge part of social media strategies today.
As a fact, Influencer marketing has the potential to become an $8 billion dollar industry by the end of this year. So if you’re looking for a potential platform to market your business, now is the time to consider Instagram. Plus, Instagram influencer partnerships are by far proven the best performing platform for brands to get the exposure of new audiences quickly, with an approximate average of 3.21% engagement rate compared to 1.5% across the rest of social networks.
According to a Study by Influencer Marketing Company Linqia Reports of 2019:
- 39% of marketers surveyed with a digital marketing budget above $500,000 plan to increase their Influencer marketing budget.
- Almost 54% of them are planning to spend $250,000 annually in Influencer marketing.
- And almost 17% are going to spend more than $1 million.
Many rising social media stars would take on brand partnerships and sponsorships in exchange for free products, in the earliest stage of social marketing. Those days are long gone, whereas several micro-influencers are still willing to exchange free products for promotion but today’s biggest Instagram influencers have started charging major bucks for posting promotional products on their feed as their handles have become their main source of income.
No wonder that social media influencers have become indispensable for brands especially on Instagram. But if you were to ask an influencer how much money they would charge, you may be surprised to see the scope of answers that would come across. So, it has become very difficult to come up with a fair price when there are so many factors to consider.
When there is no one-size-fits-all pricing, many digital personalities adhere to the one cent per follower rule. From there you could take other factors into consideration such as engagement rate, client budget, campaign length and other partnership specifics.
The rates completely depend on the influencer’s niche and the geography – e.g. a high-end fashion influencer in US will earn more than a similar influencer with a south-east Asian audience. Similarly, a gaming accessories influencer will earn more than an influencer in the ‘motivational quotes’ niche.
|Follower Count||Rates per Post|
Creative mandates, timeline, production cost and rights affect the fee. Instagram Stories are usually part of a package deal, or included to sweeten the deal for the brand.
Partnerships With Influencers
A partnership with a big social media influencer could be a little pricey but the investment could really pay off! A series of Instagram uploads by a popular fashion blogger with over 500,000 followers and a cult following could sell out an entire product line within 24 hours.
On the other hand, Micro-Influencers are no less. Influencer marketing has evolved to become a key strategy for promoting your businesses and products on Instagram even those with less than 100k followers yield great results for businesses in 2020, through engagement with their followers.
As engagement rates continue to decline, more and more brands are seeing the value in partnering with Influencers with a small following but with high engagement. Micro-Influencers also add the benefit of reaching a smaller, targeted audience. It’s reported that Influencers with 50k to 250k followers tend to deliver a 30% better ROI per dollar spent than macro-influencers. The larger the Influencer, the lower the ROI. They also come with a smaller price rate than macro-influencers. In fact, last year micro Influencers posted 84% of sponsored posts worldwide!
The Cost of Creating a Post
You might have learned that there goes a lot of work into creating a perfect Instagram post or story! This makes it important to consider all the extras that go into getting “the perfect shot”. Therefore, it is advised to always know the cost production before you sign a contract.
If you’re not adding the production budget to the fee, make sure of incorporating those costs into your fee before agreeing to any offer. It is very important to have an idea of the expenses that would come up while executing the creatives for your partnership when negotiating with partners.
For example, many Influencers hire professional photographers and editors so they can be the most creative and get the best outcomes. If you know you’re gonna need some external help getting the shot, you’ll need to get the price quoted ahead of time so they can factor into the rate. Whether shooting across the town or around the country, you got to get the prices calculated for the travel prior to discussing your partnership terms.
Calculating Your Rates
It’s always a good idea to have a baseline price since your budget may heavily depend on the details. It could be frustrating for the agencies that are new to the game, to have no idea if they are getting a fair deal or not for the clients.
If you’re just getting started in the Influencer space, don’t be afraid to ask around! In an industry dependent on making connections, your community will be happy to share their advice. Making friends with other influencers within your niche is highly recommended.