After all the work designing an influencer campaign, the last thing you want to do is ruin relations with the influencer because of poor compensation. Regardless of quantity, some form of payment, compensation, or gift should be within every written agreement. There is no definite answer on how much to pay for an influencer. So, the best approach is to research how your industry pays for content and decide an appropriate amount for your budget and campaign.
Why should you pay Influencers?
Choosing a micro or nano-influencer because they offer to promote for free is not always the best choice for your campaign. Free influencers are not under a contract, so they do not need to follow the rules and guidelines of a brand. The quality of the content cannot be dictated, and the influencer can choose not to share the resulting analytics.
While free content is not always poor quality, the more effective strategy is to write an agreement to ensure brand standards. Compensation, like gifting and shout-outs, can be payment, but that does not always reflect the time or effort of the influencer's work. During negotiations, discuss what kind of compensation the influencer will accept.
Examples of Pay Per Post by Platform
A common form of payment is deciding on a flat fee per post or type of content, 49% of brands choose to pay a flat rate. This eliminates a lot of the guesswork compared to paying by engagement and simplifies the process. This process does not include all the factors that can go into payment but is ideal for campaigns with a single influencer or on a tight timeline. If an influencer is posting to multiple platforms with the same content, consider a bundle price for a package deal.
Factors That Influence Payment
Often, the amount to be paid may not be initially apparent. Like ad or film productions, a lot is happening behind the scenes. Not every agreement needs to consider everything that goes into payment. However, it is good to know the factors that affect the budget:
amount of views
amount of conversions
pay per click
cost per acquisition
duration of post and payment
on-set production expenses
No matter what factors you decide to use, it should be stated in the agreement what will be considered when determining payment.
Paying influencers is not an exact science, but there are ways of calculating how much an influencer campaign will cost in the end. Hootsuite devised some basic formulas for calculating the total rate of a given campaign.
For payment based on the amount of engagement, likely for micro-influencer campaigns:
Engagement rate per post + type of post (# of post) + additional factors = total rate
For payment based on the follower amount, likely for macro-influencer campaigns:
$100 per 10,000 followers + type of post (# of posts) + additional factors = total rate
For payment based on post engagement:
Average Price per Post = Recent Average Engagements x $.14.
For payment based on video content:
Price per Video = Recent Average Engagement x $0.16
Price per Story = Recent Average View x $0.06
Price per Story with Poll = Price per story (Recent average view x $0.06) + Price per Poll (hourly rate for extra labor)
For payment based on a contest:
Price per contest = (# of posts x $0.14) + (# of videos x $0.16) + (# of Stories x price per Story)
Remember that not every company follows the same rules, so these formulas are good starting points. Some statistics to keep in mind is around 42% of brands pay influencers based on the sales made, and 70% of brands track sales made by influencer marketing regardless of payment plans.
Affiliate Influencer Marketing Payment
As affiliate influencer marketing is commissioned-based. There are two payment models to consider when budgeting; pay per click (PPC) and cost per acquisition (CPA). Neither model is better than the other as they both have their pros and cons. The decision to choose a model comes down to your company's needs and budgets.
There is no one right way to calculate influencer payment. The important thing is that your brand is transparent about the process and is open to negotiation. If an influencer felt respected and compensated, they likely will want to continue working with you in the future.
Interested in working with ReelPaws for your next campaign? Check out our website and request our services!