Original Post by, Lexie Carbone
In the world of social media and branded partnerships, how much does influencer marketing cost?
For businesses looking to grow on social media, particularly Instagram, knowing how much budget to allocate to influencer partnerships can be difficult.
With so many varying factors to take into account– like an influencer’s follower count, engagement rate, project scope, and production costs — it’s no wonder it can be challenging to put together a fair price for a branded partnership.
To help demystify the topic, we spoke to Instagram influencers, talent managers and social agencies to find out the real influencer marketing costs and going rates for branded partnerships in 2019.
Why Brands Are Investing in Influencer Marketing Costs and Projects
Instagram influencers continue to be a hot topic in social media, and by the looks of it, you can expect to keep seeing more of these social stars flooding your feeds.
These collaborations and sponsorships have nearly replaced traditional ads and are a huge part of social media strategies today.
According to Influencer Marketing Hub, it has grown from a $1.7 billion industry in 2016, and is expected to continue its upward movement this year to potentially become a $5.6 billion industry.
In fact, influencer marketing is on pace to become an $8 billion dollar industry by 2020! So if you haven’t started collaborating with influencers to market your business on Instagram, now is the time.
Plus, Instagram influencer partnerships are by far the best performing platform for brands to reach new audiences quickly, with an average 3.21% engagement rate compared to 1.5% across all social networks.
More than ever before, we’re seeing brands and businesses investing a high portion of their budgets to influencer marketing — simply because, when done right, it works!
According to influencer marketing company Linqia reports in 2019:
- 39% of marketers surveyed with a digital marketing budget above $500,000 plan to increase their influencer marketing budget
- 54% are planning to spend more than $250,000 annually on influencer marketing
- And 17% are going to spend more than $1 million
So what exactly is a fair asking rate? How do you present your value to potential partners? What are important things to consider when agreeing on a collaboration?
In this post, we’ll be covering exactly how much influencers are charging and exactly what they’re charging for.
Let’s Talk Money: Calculating the Cost of Instagram Influencers
In the earliest days of influencer marketing, rising social stars would take on brand partnerships in exchange for free product.
Those days are long gone — while there are many micro-influencers still willing to exchange free product for promotion, today’s biggest Instagram influencers are charging major bucks to create posts for brands as their accounts have become their main source of income.
There’s no question that social media influencers have become indispensable for brand campaigns, especially on Instagram.
But if you were to ask an influencer how much money they charge, you may be surprised to see the scope of answers across the board:
So how do you come up with a fair price when there’s so many factors to consider?
The Current Market Challenge: Setting Fair Influencer Marketing Costs
While there is no one-size-fits all pricing, many digital marketers adhere to the one cent per follower (or $100 per 10K followers) rule, but only as a starting point for their calculation.
From there, you can adjust and take other factors into consideration, such as engagement rate, client budget, campaign length, and other partnership specifics.
However, influencer rates can still vary quite a bit. Collectively’s latest influencer marketing report states: “The guiding principle for influencer-brand collaborations is simple: influencers and brands are in a position to mutually benefit each other. There’s more than one way brands can provide value, but cash is king.”
Instagram influencer, Matt Crump (@mattcrump) shared his fee guide with Later, including the his rates per post:
He added, “Creative mandates, timeline, production costs and rights affect the fee. Instagram Stories are usually part of a package deal, or included to sweeten the deal for the brand.”
For Shane McCloskey, Director of Sales at influencer platform, Influence.Co, how much influencer marketing costs is a question he regularly gets asked:
“Is this a fair rate?, How much should we be paying a particular influencer for their posts, Stories, YouTube videos, etc.? –the answer is fairly simple and always the same: it depends.” shared Shane.
He also adds, “In my experience of chatting with agency and brand partners, there is absolutely no standardization in how influencers charge for partnership collaborations.”
So with no fence lines in place, influencer marketing is still the wild west for many businesses and influencers alike. Some may be underpaid for influencer services, while others will have over charged for their services compared to others in their field.
“An influencer with a million followers on Instagram may charge $100 for a post, while an influencer with ten thousand followers on Instagram also charges $100 for the exact same post on their feed,”Shane noted.
The current challenge for both influencers and brands is to be both fair and competitive in the market.
Misty Gant, Senior Vice President of IMA Agency shares “We calculate this [rates] based on the reach, impressions, engagement and industry of the influencer. This allows us to be competitive and ensure we are getting the most value for clients.”
As Misty points out, an Influencer follower count isn’t the only thing to determine cost, or a suitable partnership. But to help break down the budget, we’re taking a closer look at how macro- and micro-influencers determine their rates.
Partnering with Big Instagram Influencers (100K+ Followers)
A partnership with a big influencer often comes with a big price tag, but the investment can really pay off!
Considering advertisers spend upwards of $5 million (excluding production costs) for a 30-second Super Bowl commercial to reach more than 100 million viewers — who may or may not be the brand’s target audience — a influencer partnership with a niche audience doesn’t seem like a bad business idea.
A series of Instagram posts by a fashion blogger with 500,000 followers and a cult-following could sell out an entire product line within 24 hours.
Travel and lifestyle blogger, Christina Galbato (@christinagalbato) (223k followers) shared with Later that she charges a rate of $2.2K per post and $700 per story.
She also adheres to the rule of $100 per 10,000 followers to calculate her rate.
One lifestyle blogger, with 118K followers and a 2.5% engagement rate, shared her rates with Later including different package options:
Another lifestyle blogger with 170K followers and a 4.5% engagement rate disclosed similar rates listed as:
- $1000 per Instagram Post
- $500 per Sponsored Giveaway
Wishing to remain anonymous, the lifestyle blogger noted that: “This rate includes endorsement of service/product on Facebook, Instagram (along with a story mention), Twitter, or Pinterest.“
Similarly, a popular travel blogger and photographer with 100K followers and a 9.2% engagement rate listed their content creation at a similar rate, priced at:
- $1000 per Instagram Post
- $1200 per Instagram Post + Blog Post
- $200 per Instagram Story
- $2000-$5000 for a 60-Second Product Video
A rate of $1000 seemed to be the average price per single Instagram post among larger influencers with ~100k followers, offering varying rates for additional services depending on the business’s needs.
Partnering With Micro-Influencers (10K – 100K Followers)
Influencer marketing is poised to become a key strategy for promoting your business and products on Instagram, with micro-influencers (those with less than 100k followers) yielding great results for businesses in 2018.
In fact, last year micro-influencers posted 84% of sponsored posts worldwide!
As engagement rates on Instagram continue to decline, more and more businesses are seeing the value in partnering with Instagram influencers who have a small (or “micro”) but highly-engaged following.
One of the biggest benefits of working with micro-influencers is that they tend to retain higher levels of engagement than top-tier influencers.
Micro-influencers also have the added benefit of reaching a smaller, targeted niche. For example, travel bloggers Taylor Loren (aka “Taylor from Later”) and Elaine Rystead of Local Wanderer (64.8k followers) have a loyal following of people who love to travel and stay cool places. That’s why it’s no surprise their picture-perfect post led to 4 bookings in only 20 minutes:
Since the traveling duo typically charges around $500 per post, the hotel was able to make back their investment in minutes.
In a recent influencer marketing study, Neoreach concludes “the larger the influencer, the lower the ROI”.
Yep, you read that right!
It’s reported that influencers with 50K to 250K followers deliver a 30% better ROI per dollar spent than macro-influencers, and 20% better than influencers with 1+ million followers.
They also tend to come with a smaller price tag than larger influencers. After reaching out to a fashion blogger in Los Angeles with 80K followers and a 7.1% engagement rate, Later received her media kit, listing her pricing as:
- Single Instagram Post: 1 for $300, or 2 for $500
- Post across all platforms (Instagram, Twitter, Facebook, Blog): $400
- Per look, or two looks for $600
She also notes, “Rates vary based on services. Services offered include modeling, blogging, LOOKBOOK art direction and social media consultation.”
Later also received rates from a health and nutrition blogger, with 30K followers and a 7.3% engagement rate. While she had similar pricing, it included a wider variety of pricing options in her media kit:
- Dedicated Instagram Post: $325
- IG Giveaway: $350
- Brand IG Takeover (min 2 photos + Stories): $250 per day
- IG Caption Mention (No visible product): $75
- Series of 5 IG Stories: $85
- Series of 3 Dedicated Posts: $825
- Series of 5 Dedicated Posts: $1400
If you’re a small business, working with micro-influencers could be an effective and affordable way to grow your business in 2018. You can learn more about if micro-influencer marketing is right for you here!
In-Kind Influencer Partnerships
While cash is the most desired form of payment, in-kind campaigns can still be a meaningful exchange. Collectively reported “54% of influencers say they would be more likely to post in-kind, or in exchange for free product, if they’re a true fan of the product or brand.”
Many influencer with a smaller following are happy to do in-kind partnerships, especially when they are already a brand advocate.
If you’re a larger brand reaching out to a follower looking to grow, the chance to repost an influencer’s photo to your larger audience may even be an added incentive!
When asked how she calculates her influencer marketing costs, blogger and micro-influencer Nicole Sadozai (@nicolesadozai) answered, “The best advice I received was at the Create & Cultivate event in Atlanta in 2016. My mentor for the day, blogger @nany spoke about how important it is to know your worth and how valuable your time is.
“Regardless of how large or small your following is if a brand is asking you to create content for them you really need to consider if this is something you are willing to do for free.”
Marketers have become familiar with paying teams of photographers, creative directors, and producers to build out their digital campaigns in the past, and should look at influencer marketing in the same light.
Influencer Travel Partnerships
Much like press tours, brands are putting together Instagram influencer getaways, sending influencers on vacations across the globe — inviting them to relax, hang out with their friends, and, of course, post all about it.
It’s no surprise that these luxury getaways come at a steep price tag, as brands tend to spare no expense when it comes to the extravagant accommodations.
Revelist looked at one beauty brand, Tarte’s Instagram influencer getaway and estimated the cost of the trip. The list of expenses includes travel on private jets, food and drink, swag, and activities.
The trip’s grand total is a whopping $338,640, but Revelist notes this is only a modest estimate. These trips can easily exceed half a million dollars, since Revelist’s estimate doesn’t including the cost of paying the influencers, trip staff, and other expenses.
While these numbers may seem high, consider this: the average 30-second national ad costs $342K, while a one-page magazine ads runs approximately $250K — and these ads may or may not even reach the brand’s target audience. However, a series of Instagram posts by a fashion blogger with 500,000 followers and a cult-following could sell out an entire product line within 24 hours.
Check out our blog post, Here’s Why Brands are Taking Instagram Influencers on Vacation, to learn more about how these brand getaways work.
The link in your bio is prime real estate –and influencers are teaming up with brands to use it for affiliate marketing.
In most cases, influencers are set up with a unique URL that offers their followers a special discount. Once followers click through to the site and makes a purchase, affiliates will receive a percentage of the sale!
While some influencers may prefer cash upfront, affiliate programs can be a real win-win for both businesses and affiliates (and followers receiving the discount!). Your influencer partner will be much more likely to continue sharing about your product with a continued incentive than they otherwise would for a one-off partnership.
The Cost of Creating the Perfect Post: Calculating the “Extras”
As you probably know, there’s a lot of work that goes into creating an Instagram post or story! That’s why it’s important to consider all the extras that go into getting “the perfect shot”.
Matt Crump (@mattcrump) advises influencers to: “always know the costs of production before you sign a contract.”
“If there’s not a separate production budget in addition to the fee, make sure you’re incorporating those costs into your fee before accepting the offer,” warns Matt.
Here are a few potential costs that should be included in a project’s rate:
It’s important to have an idea of what it will take to execute the creative for your partnership while negotiating with partners. For example, many influencers hire photographers and photo editors so they can spend their time in front of the lens.
If you know you’ll need some extra help getting the shot, you’ll need to get price quotes ahead of time so they can be factoring into the rate.
Travel blogger Monica Stott (@thetravelhack) advises, “Influencers may also need to pay for a photographer and props and capturing just one image can be a full days work. Most influencers aren’t just taking selfies in their bedroom anymore so the costs soon add up!”
And now with Instagram video taking over the platform, influencers are pressed to seek out a whole new set of skills.
Viral Nation says increased pricing for video should be no surprise, and estimates, “Production time and costs can ultimately cost you an additional 40–50%, if not more depending on the scope and production value of the content”.
Whether you’re shooting across town or in another country, you’ll want to make sure you’ve calculated your travel cost prior to discussing your partnership terms.
For example, many LA influencers hit the desert to capture the perfect mood for the products they are shooting. This means they need to calculate the cost of gas, along with the time spent on the road.
Monica (@thetravelhack) also notes, “For me, it’s whether I’ll need to travel to a location to shoot the photo. I can usually tag new campaigns onto press trips but sometimes I’ll need to arrange a whole new trip. This can be pricey!”
It’s important to not only consider the price of travel, but to also calculate the value of your time spent to get there.
Many large influencers are now represented by agencies to coordinate their brand partnerships. Since most of these agencies are equipped with seasoned negotiators, they often come with a handling fee.
Christina (@christinagalbato) shares, ‘I am fortunate to now be at a place where I work with a manager, who handles all brand negotiations for me.”
Hiring a manager can be crucial for influencers who are making a living on the platform, or are being reached out to by brands frequently. “To sum it up, when a brand reaches out to me, my manager and I speak with the company to establish the scope of the collaboration,” Christina explains.
An agency or manager can also help take some of the negotiation pressures off their clients.
“We then put together a package rate and go back & forth negotiating something that works for both the brand and I. The goal of this negotiation process is to make sure that I am getting compensated fairly for my time and for access to my audience, and to also (whenever possible) increase the number of deliverables on my end, which in turn increases the size of the campaign and my rate.”
“For example, if a brand initially just wants 2 Instagram posts, we will work to push that to 4 with a competitive package rate.” Christina also notes.
And that’s not even the half of it. Misty at IMA Agency shares, in addition to influencers rates and cost of production, “brands can also expect to pay an incremental cost for additional usage rights outside of standard social reposting, exclusivity requirements, additional images for brand use, paid media (boosting) requests, and white labelling content.”
Again, it’s important to remember you’re not only paying Instagram influencers for their following or engagement rate but often times for their ideas and content creation. Today’s influencers have become pros at concepting, shooting, and executing mini-campaigns for brands and should be compensated accordingly.
Nailing Down the Details
When discussing costs and campaign specifics, Nicole (@nicolesadozai) advises Instagram influencers to “get your media kit ready and start planning for the long term instead of right now. I started my blog by viewing it as a business from the beginning and it paid off in a big way. Hobbies are fun but a business will pay the bills!”
Nicole comments, “I almost always present my rates to potential partners via my media kit. It’s always the most straightforward approach when it comes to brand partnerships. This way, we both know what we are getting as well the services I offer and the type of content I like to create.”
Monica (@thetravelhack) also presents her costs with an influencer media kit she created with Canva, and notes, “…there are so many variables for each campaign that I always let them know it’s a rough guide. I always try to arrange a phone call with the brand to talk about deliverables and fees.”
Monica says her approach is beneficial for both herself and potential partners, adding, “This helps me understand exactly what they’re looking for so I can create a bespoke package for them but it also reassures them that I’m professional and I know what I’m doing!”
Media kits and contracts are an important part of scoping out your campaign expectations and requirements and should be included in all influencer marketing agreements, like any other business partnership.
Again, there is no “one size fits all” rate when it comes to influencer marketing costs, especially when it comes to content creation. Often times, there’s a lot of “extras” that go unaccounted for in collaborations.
Setting clear guidelines and objectives from the get-go can help you better prioritize your budget and help avoid unexpected expenses.
Get Your Free Influencer Media Kit Template!
Enter your email to get your fully customizable template sent straight to your inbox
GET THE TEMPLATE
Setting Clear Goals For Your Partnership with Instagram Influencers
With so many varying rates, content offerings and different types of Instagram influencers, how do you know which type of partnership is right for you?
Toni Daly, influencer marketing specialist at Hypertly says, “Businesses looking to get into the influencer space should make sure to do their research and choose influencers who align well with their brand.
Although the ROI in influencer marketing isn’t instant, having familiar faces back your product or brand helps establish trust among potential customers, which is invaluable in the long run.”
It’s important to spend more time thinking about your strategy and campaign goals than the dollar amount associated with your campaign.
Misty at IMA Agency advises influencers “really focus on their niche and create high quality content.” She also shared, “At IMA we strive to create authentic connections between brands and influencers — which is paramount to being a credible voice and authority within their community. They should also continue to focus on their engagement rate – this is a key measurement we look at when vetting potential partners for our clients.
Setting up crystal clear Instagram marketing goals will drive initial planning decisions on whether to execute campaigns based on short-term partnerships (for example, three Instagram posts about a new product release) or longer-term contracts that specify ongoing deliverables over an extended period of time.
“I don’t often do one-off posts with brands, so most of my collaborations involve multiple Instagram posts,Instagram Stories, YouTube and/or blog content.” shared Christina (@christinagalbato).
“When negotiating these larger collaborations, I offer package pricing. For example, if a brand wants 3 posts on my page, the total rate at $2,200/post would be $6,600, but I’d offer them a package deal of 3 posts for $6,000. This gives the brand a bit of a deal and helps to lock the campaign in more quickly.”
Toni Daly also notes, “Using influencers to generate brand awareness can be beneficial for almost any business, as long as the goals of the partnership are established early on. What are you trying to achieve when collaborating with an influencer? Are you looking to build brand awareness, gain social followers, or are you looking for direct sales?”
Influencer Marketing Hub predicted a trend towards brands cultivating more long-term relationships with influencers in 2019.
Monica (@thetravelhack) shared, “I don’t do one-off posts on social media and only work on bigger packages which will usually include a blog post, a video, a newsletter feature and a small package of tweets, Facebook updates, Instagram grid posts and Instagram Stories.”
Monica also commented she prefers long-term partnerships as opposed to one-offs:“I find this is most beneficial for everyone – the brand gets more exposure, my readers get more information about a product and I get to focus on one big job at a time and avoid all the admin of little jobs.”
Without first determining exactly what you will gain from your Instagram influencer partnership, you can’t appropriately value the influencer’s effort or set your budget.
Once your company has a clear set of objectives in mind, it will become much easier to determine whether an Instagram influencer’s fees are aligned with the value they offer and the outcome you’re looking for.
Think about what you’re looking for in the Instagram influencer’s audience to do as a result of your partnership. Are you looking to gain followers? To increase sales? Build brand awareness?
These are all great things to consider when determining the value of a potential Instagram influencer marketing partnership.
Setting a Budget and Calculating Your Rates
While your budget may heavily depend on the details, it’s a good idea to have a baseline price, or starting point to work from.
Shane McCloskey (@influenceco) comments, “It’s particularly frustrating for agency partners who are new to the game, because they have no idea if they are getting a good deal or not for their clients. While we do not provide guidance on negotiations (self-service model), we do request that creators shed some light on their “starting rate” for posts when setting up (or editing) their profiles on influence.co.”
He adds, “This data is very valuable for brands and agencies to understand if they are in the same ballpark on the cost of a collaboration as a particular creator – all before reaching out or engaging with that particular creator.”
If you’re just getting started in the influencer space, don’t be afraid to ask around! In an industry based around making connections, more often than not, your community will be happy to share their advice.
Monica (@thetravelhack) also suggests utilizing your network, and comments, “I highly recommend making friends with other influencers within your niche so you can chat to each other about the campaigns you’re being asked to work on.”
She also shared, “I worked on a campaign once with six other travel bloggers and one blogger wasn’t being paid while the rest of us were paid a substantial fee. He had no idea he could have asked for payment and had been working for free. Businesses will always try and pay as little as possible so connect with a trustworthy circle of friends so you can double check what everyone else is being paid.”
At the end of the day, your rates may look quite a bit different than an influencer in the same position. While it’s important to do the research, at the end of the day make sure you set your rate a number you can confidently stand behind.
Matt (@mattcrump) advises influencers simply charge what they think they’re worth — especially with so many factors that will be personal to their brand and unique partnerships.
He also reminds influencers, “Over time, your audience will grow and you’ll make more of a name for yourself, so you’ll be able to charge more every year, hopefully!”
Calculating the ROI of Instagram Influencers
Influencer marketing gives brands a unique opportunity to reach a niche and engaged audience.
Although it may initially seem like a risk to invest large amounts of money into influencer marketing, it’s important to consider exactly what you are paying for and, most importantly, measure the results.
After analyzing more than 2,000 influencer campaigns, Neoreach calculated a total earned media value (EMV) averaging 5.2x per $1 spent. This means that every dollar spent on influencer marketing results in five times as many interactions compared to the same marketing dollars spent on paid advertising.
Jordan Haugan, director of business development at August United says, “The marketing leaders we work with are under immense pressure to prove to their executive teams not only the typical engagement metrics you’d expect in any campaign (impressions, engagements, etc.) but business metrics (sales lifts, purchases, etc.).
Some of the most common performance metrics you can use for measuring the impact of your influencer marketing are:
- Engagement rate: likes, comments, shares
- Brand sentiment: how people are talking about your brand
- Traffic: customers visiting your website
- Sales: conversions and revenues generated
Jordan also notes, “We urge the brand leaders we partner with to put conversion tracking systems in place to attribute all the deeper, meaningful metrics we can show (beyond eyeballs and engagement) while looking at campaigns holistically — after all, for an audience to take action, you need an audience!
As with everything, use campaign performance data to see which influencers drove the best results (and why), and use this data to inform how you construct future campaigns.”
There’s no doubt Instagram influencers will continue to dominate in 2019! Have any other tips or tricks for calculating your influencer marketing costs? Let us know in the comments!