With the influencer marketing industry expected to surpass $17Bn in 2023 and companies making an average of $5-$7 for every $1 spent, influencer collaboration posts and sponsored posts is a must for any brand willing to increase their brand awareness, their reach and overall profitability. However with celebrity/influencer rates surging to keep up with increased demand, it is very important for companies to know how much to pay influencers to promote their products and services. There are several factors to consider, in order to know that you are getting value for your buck.
Influencer Rates on Average
As a general rule of thumb the cost/number of followers is:
- Nano influencers (1000 - 10,000 followers): $10 - $100 per post
- Micro influencers (10,000 - 50,000 followers): $100 - $500 per post
- Mid-tier influencers (50,000 - 500,000 followers): $500 - $5,000 per post
- Macro influencers (500,000 - 1,000,000 followers): $5000 - $10,000 per post
- Mega influencers (1,000,000+ followers): $10,000+ per post
However there are certain factors to consider that affect these prices
Engagement Rates
For Instagram, the average cost is $250-$750 per 1k engagement
It goes without saying that the higher the engagement, the higher the asking fee will be. The average engagement rate is 1% to 3% (so if an influencer has 1 million followers, getting 30,000 comments per post is considered ok). Anything below that is bad engagement and anything above that is excellent. Influencers and Celebrities with many followers but with low engagement rates, tend to ask for more money, which reflects the amount of followers that they have. However you would be better off paying a celebrity with a less amount of followers but with a higher total number of engagement
Example: Influencer A has 1.2 mil followers and their latest posts get 1-2k likes. She might ask for $7000 which is on the low side of influencers with her number of Followers.
Influencer B has 600k followers and 6k likes per post. She might ask for $2000-$4000 and this would get you a better deal than choosing influencer A.
Their Impact/Status/Social Proof
This is a highly intangible asset to evaluate but there is a general rule of thumb to consider when working with an influencer: why are they famous and what is their status outside of social media. Generally, influencers that became famous from their work outside social media, like athletes, artists or actors tend to have more fanatic, their audience will be and the more they will actually influence them. An influencer, as the word itself indicates is someone who actually influences people, not someone who has many followers. Between 2 influencers with the same engagement, it is best to choose the one with a more "fanatic" audience, but this might also be reflected in their asking fee.
If a celebrity has the engagement that you are looking for, but their fame is only Instagram related and you have no way to know how fanatic their audience is, there are some factors to determine their value to your brand besides their engagement and their insights (you should always ask for their insights and audience demographics before working with an influencer). First of all there are many tools like modash https://www.modash.io/fake-follower-check/?influencer=%40dualipa which calculate how much of a percentage of an account's follower is fake. From our experience anything below 25% is great, as it is very rare finding a percentage less than that, especially in celebrities and mega influencers. Also if they have a blue tick, they are most likely legit.
Their content is also very important as well. If for example there is a mom influencer with great looking shots, who has a steady following, you can infer that she has a mom following who like her account. However, if the content is too "sexy" usually they are followed by an audience who is not likely to buy your products or services. Another dead giveaway that something is not right is if that person has a high number of comments that is roughly the same in numbers every time. There are many accounts that you will see have 400 something comments in EVERY post, which is not normal and if you look closely, you will see that these comments are fake looking. They have emojis or make random compliments that are unrelated to the post. Finally, when you start looking at multiple profiles, you will start getting a gut feeling (which is nothing more than subconscious recognition from experience, according to Malcolm Gladwell) that something is off and 99% of the time, you are correct, If something feels off, it probably is.
Example:
Influencer A is an a person who became famous through Instagram or Tik Tok posts and they are getting 3k likes per post.
Influencer B is a lacrosse athlete with 3k likes per post.
It goes without saying that all other things held equal, Influencer B's post will have a higher impact on their audience.
Type Of Post
The asking fee will differ depending on the type of post that you are asking the influencer to make. On general, influencers Instagram or influencer rates are increased on Instagram giveaways, as opposed to a simple post, as giveaways tend to generate 5X the engagement rate (as their fans have to comment and tag other accounts. in order to win the prizes) and this is reflected on the asking fee. Stories are way cheaper (but with a lower impression rate/impact) than posts, and video feeds are slightly more expensive than static posts, and as all things in life, the more complicated the post, the higher the price.
Agents
This should come as no surprise but if the influencers are working with agents, and the deal is made through them, the price will be higher, to reflect their cut. On average, influencers working alone, without agents, or if the deal is made through them directly, will get you a better deal.
Other Factors
-If it is a deal of multiple posts versus a one-off post. Ambassador type deals will be more expensive, but they will come at a lower cost per post.
-Timing, if you caught the celebrity on a busy season with a higher work volume, it will be reflected on the price. The same is true for celebrities that are relevant or hot at the moment, which will be reflected on an increased price as opposed to celebrities with the same engagement that are not in that situation.
-Your business: now this one is ambiguous but in most cases influencers will not want to work with you if they think your line of work is risky in some sort (like cryptocurrencies or NFT's, or even a product that is not market tested). The ones that will work with you will most likely ask for a higher fee than their usual one, to compensate for their risk.
How Much Should you Spend For an Influencer Sponsored Post
Everyone should spend according to their needs, goals and budget, but from our experience working with multiple celebrities or mega celebrities with 1 mil. followers/10k+ likes per post, any price below $6k for these rates is a great price, although it is very rare. For Micro/Nano Influencers if you can get a deal for a product exchange for a post (instead of paying a fee) or a percentage of sales, it is a win-win scenario. For mid tier influencers anything below $500 is a bargain.
Since it is a numbers game and most mega influencers will not even reply to your message, if you approach multiple influencers you will see an average price range for the influencers in your criteria, so anything below that will be a great deal.
How Much Should you Expect to Make per Sponsored Post
That is the million-dollar question, if you pay an x amount of money, how much will you make back? Is the ROI worth it? Unfortunately, that is the hardest question to answer, albeit the most important one. No matter what the level of your brand is, and if you are looking for exposure, social proof, brand awareness, the ultimate goal is to make sales. The biggest mistake that most small-medium businesses make, is to spend a disproportionate amount of their income in one campaign and expect immediate sales. Unfortunately, we had to find out the hard way. Just like when you make a facebook ad, you can’t expect to get immediate sales for your product when the audience comes in contact with your product for the first time, influencer sponsored posts work in the exact same way. A strategy that many companies make is that they run Instagram giveaways with influencers to gain followers and social proof with their product and after the campaign is over, they run ads to their newly acquired followers with offers or target new ones, using their shots with the celebrities for social proof. It takes a lot of trial and error and it would not be a good idea to use a big percentage of your budget on one campaign.
Benefits of Influencer Marketing and Celebrity Endorsement
As we previously mentioned studies show that on average you can make $6 for every dollar spent on influencer marketing, while it can reach to more than $18 if the fit is right. It goes without saying that a fan of a celebrity is more likely to buy from a company that is sponsored by the influencer they follow. Although they know the celebrity is being paid for the endorsement, (as they ethically should), they know that influencers put their reputation on the line when working with a company and they most likely would not work with a dishonest or fraudulent brand. This gives invaluable legitimacy and social proof to the promoted brand.
Also, something that is massively overlooked is the fact that up to recently a company would have to pay 3 parties to make a successful ad. They would have to pay the celebrity for the endorsement (and social proof), the camera crew to take the shots and videos and the medium to make the campaign (tv. radio, internet web/news sites etc.). With the rise of influencer marketing, you are only paying for the celebrity rates, as the medium (their social media profiles) and the camera crew are included in the price).
Loop Giveaways
A great alternative to working with celebrities or mega influencers without paying for their hefty rates are loop giveaways. Loop giveaways are celebrity campaigns where multiple accounts are promoted by one celebrity's post, thus splitting the fee and paying only a tiny fraction of the influencer's expensive rates, while getting the same benefits as if being promoted alone. In loop giveaways a huge money fee is offered to the celebrity's fans, if they follow a list of companies that are the sponsors of the giveaways. The fact that the followers have to follow a list of accounts is offset by the prizes, so each sponsor/promoted accounts gain massive followers, while having paid only a tiny fraction of the celebrity's fees.
With celebrities like Cristiano Ronaldo and Kim Kardashian asking for reportedly 1 million dollars per post, it comes as no surprise that very few companies can afford to work with them. That is where loop giveaways come in allowing for more brands to work with big celebrities at a more affordable price.
Problems With Influencer Posts
Well for starters, as we already established any celebrity with a reach which is enough to make huge impact to your brand will ask for a lot of money, and of course you are only paying for the post, while there are no guarantees on results. Besides spending a ton of money for the post, you will most likely need to spend double that amount on sponsoring the post on ads, to capitalize on the social proof of the celebrity images with your brand. Most companies, that are not multinational corporate giants, will not easily afford these fees, which come at a great risk, since anyone with even the slightest experience on marketing knows that you need to test multiple strategies before finding one that works. The higher the price, the higher the risk and the risk involved with celebrity fees is substantial.
In addition, that is true, if you manage to book a celebrity in the first place as most will not respond at all to your request. Influencer outreach is a tedious process and very time consuming, not only to find influencers to promote your brand, but getting a response from them in the first place.
If you don't want to pay $10k+ for an influencer post (which also comes at a great risk) and go through all the hassle of taking endless hours to find the right influencer and actually get them to respond, you can use a service like ours. We are offering Influencer posts for your brand on Instagram with famous celebrities of 1 mil+ followers/30k likes per post for under $500. We will get your product/service in 2 shots next the celebrity in a post in her profile and a story (of 1 million impressions), in addition to 1k+ new followers and 300+ emails to add to your email list. We are also offering guaranteed results, so you are not paying for the post, but for results. You can see more information here or shoot us an email at info@divestum.co.