Influencer marketing is an effective revenue-generating marketing strategy for both content creators and brands.
As many creators have entered the game, you’ll need to learn how to evaluate and manage collaborations with them.
But how do you learn more to have successful financial partnerships with influencers?
Through our guide to influencer payments.
In it, we discuss:
- The ways to pay influencers
- How to determine influencer payment rates
- Influencer payments for different social platforms
- Tools for managing influencer payments
Let’s get right to it.
6 Ways to Pay Influencers
There are several payment options that a brand can adopt when collaborating with influencers.
1. Cash payments
The creators' favorite payment method. It’s also a good way to attract influencers to work with you.
Influencers are potential entrepreneurs who want to make an income through their content.
The way most creators choose to get paid is through PayPal, as it allows them to receive payment directly into their accounts.
The upside: It's a way to attract talent and influencers with a larger following.
The downside: This payment method is mainly based on the return on investment (ROI) of the campaign and the value defined by the influencer. You will also need to track and benchmark your expenses.
2. Fixed rate + bonus
This is one of the best payment methods for both parties; brands and creators. Influencers are paid an amount for the post or campaign setup, and they receive a bonus based on sales.
Clicks, conversions, registrations, and more may be included in this bonus system.
The upside: It’s a payment method that interests most influencers as it helps them create a deeper connection with brands since they earn more based on their performance.
The downside: This method is often more expensive, depending on the rates brands offer.
3. Performance-based pay
This payment method has the lowest risk for the brand and is the most economical way to work with creators.
This payment method ensures that influencers will be paid if they achieve a certain goal related to purchases, bookings, or newsletter subscriptions.
Performance-based payments offer a percentage derived from conversions made through the creator's promotions.
The upside: It's an easy way for brands to get brand awareness on social media and collaborate with creators without risk. All that’s needed is a tracking system that will calculate the required actions, such as an affiliate marketing link.
The downside: It’s generally not one of the more popular payment methods with creators, and it’ll be difficult to attract influencers with a large audience.
A straightforward approach many brands and creators prefer.
In essence, costing is based on production costs per piece of creation, and the price is often determined by factors such as follower count and platform.
This method is preferred by larger brands that have the expected influencer marketing budget available even for more expensive campaigns.
The upside: It's a win-win for both brands and creators. Brands create relationships with larger creators who will prefer to work with them in the future, while creators get paid based on the content they produce.
The downside: It’s relatively difficult to determine the value you’ll receive from a post, as a variety of actions are often required for a successful influencer campaign.
5. Gifts & credits
This method is about the gifts a brand can offer the influencer they work with. These can be free product samples, special offers or discounts, or even credits to buy products.
The upside: It's a cost-effective way for brands to work with creators without incurring any practical costs.
The downside: This method will generally only attract nano-influencers (1-10k followers) who don't have a huge reach, which might
limit your campaign outcomes. Also, it’s a short-term method that isn’t based on strategic planning.
6. Content licensing fee
This way, you are essentially paying a creator who is already using your products or services to promote the content they produce for you.
This content is user-generated content (UGC), one of the most effective forms of content.
Content licensing can be done through TikTok Spark Ads, which allows brands to use content produced by other people and promote it.
The upside: It’s an extremely persuasive way for brands to advertise, as the content will be as realistic as possible. The entire production process is done by the creator and the brand has no additional costs.
The downside: This method cannot be applied to all brands, as UGC might not be a part of everyone's strategy.
Having seen all the possible payment methods to launch your influencer marketing campaign, let's now look at the factors that shape the price.
7 Factors That Affect Influencer Payments Rates
There are many people whose main occupation is content creation and its promotion on social media channels to the community they’ve created.
Most are professionals who make a living through their content. And, as you start collaborating with influencers, you’ll be contributing to their earnings as well.
This means that you must know the factors that shape influencers' remuneration.
The factors that we’ll see next help brands to better understand the influencer market and how to evaluate creators before hiring them.
Factor #1: Engagement rate
Perhaps one of the most important metrics that will determine the price of an influencer is the engagement rate.
Also, it's a factor that can make creators with smaller followings more valuable.
This is because brands want to drive more clicks and traffic to their ecommerce store and get more comments and shares of their campaign.
So the engagement rate is important, as it shows the percentage of an influencer’s followers who engage through clicks, comments, or shares.
In fact, micro-influencers with 1,000 to 5,000 followers on Instagram receive the most interaction, with an average engagement rate of 4.84%.
Factor #2: Number of followers
This metric might be the first one that comes to mind when thinking about pricing influencer collabs.
While we mentioned above that the follower count alone isn’t enough as a metric, it remains an important factor in determining a fee.
This number may not prove the real connection between creators and their audience but it shows their ability to increase their followers very effectively.
It’s also a hint as to those creators who have a deep understanding of a certain platform and what people there are looking for.
All of these are determining factors in deciding what price you’ll pay.
Factor #3: Reach
To a large extent, the reach depends on the followers an influencer has.
Usually, the more followers, the greater the reach.
So, for campaigns where the goal is to reach a wide target audience, brands should go for influencers with a larger following.
There is, however, the possibility that a creator will have a greater reach in the following cases:
- If you combine the created content with ads
- If the creator has discovered a trend and the platforms promote more of its content as a result
- If the platform promotes more specific content based on its algorithm
In these cases, working with a smaller influencer can be just as beneficial.
Factor #4: Exclusivity
Too often, we see campaigns with celebrities who work with the same brand for years while not working on their competitors' promotions.
This happens in the case of exclusive partnerships.
To do this, brands must negotiate with influencers to sign a non-compete agreement or exclusivity clause.
That means those creators won’t promote a competitor for the period defined by the contract.
Clearly, such an option increases the price quite a bit, since it limits the creator's collaborations in favor of a long-term partnership.
Factor #5: Type of content
The type of content greatly affects the price.
It defines the time influencers need to invest, what actions they need to take, and also their promotional actions.
You’ll appreciate that the time it takes to create an Instagram Reel will differ from the time needed to produce a long-form YouTube video.
So the prices of these two types of content will vary greatly.
Other factors that play a role in shaping the price of content production include:
- The size of the job
- The requirements of the brand
- The amount of creative freedom given
- The time frame of the project
Content doesn’t only have production costs; other hidden costs also increase the final price per creation.
Factor #6: Industry or niche
The industry affects the price of creators, as it reflects the value of the specific market.
According to research in the US, the tech industry is the most profitable for influencers on YouTube as that’s where they have the greatest media value. In contrast, the travel industry has one of the lowest influencer media values.
This shows us that the fees of the tech creators will be higher and lead to an increase in the prices of all creators of this niche.
Of course, this doesn't mean other creators can't be successful; it just reflects the market.
Factor #7: Influencer demand
Finally, an equally important factor is influencer demand.
There are likely to be niches with fewer creators doing serious work and making a positive impact.
This means that the higher the demand, the higher the fees set.
The less competition there is, the higher the prices can be, as brands don't have as many creators to choose from.
The corresponding theme also appears in seasonal campaigns, where demand increases rapidly. Let’s cover the influencer types you should know.
Payments by Influencer Type
The creator economy is growing rapidly, and more than 54% of 13- to 38-year-olds want to become social media influencers in the US.
Therefore, marketers need to categorize creators further, based on their characteristics and followers.
Some categories by influencer type include:
- Nano-influencers (1K to 10K followers): They are often undervalued but a great choice to reach niche audiences. Most of them settle for performance-based pay.
- Micro-influencers (10K to 50K followers): They have a decent following and receive performance-based payments, free products, or other payment types.
- Mid-tier influencers (50K to 500K followers): They usually charge by the influencer post.
- Macro-influencers (500K to 1 million followers): They are famous on social media platforms. They are professionals getting paid per post or through cash payouts.
- Mega-influencers (over 1 million followers): This category represents famous people or celebrities. They charge per piece of content.
- Organic influencers: This category includes independent follower count creators who have built a community while keeping in touch with their followers. They are extremely valuable partners.
- Personalities: These influencers are known through the entertainment industry and systematically create content about their lives and the products and services they use.
- Visual informants: They are social influencers who make a positive impact wherever they appear and influence the decisions of the public.
- Creativists: They are designers or content creators with an artistic nature who produce tasteful content and have built a personal brand on social media. They are often hired by brands to produce content for them.
Each of these types of social media influencers shapes the payment methods or remuneration, but it also depends on the platform they are on.
This is what we’ll see in more detail in the following section.
Influencer Payments for Different Social Media Platforms
A more basic distinction between influencers concerns the social networks on which they are active and have their community.
Before a brand proceeds to find the right partner, it will need to define the channels that will advertise its digital marketing initiatives.
The prices of the influencers are determined based on the types of produced content, and each social media platform supports different content formats.
Let's go into more detail to discover the estimated prices of influencers on different social media platforms.
Instagram remains one of the platforms with the most advertising activity.
According to a survey, the cost of Instagram influencers per post is:
- Nano-influencers (1K-5K): $10 – $50
- Micro-influencers (5K-20K): $15 – $110
- Mid-tier influencers (20K-100K): $35 – $350
- Macro-influencers (100K–1M): $185 – $2,500
- Mega-influencers (over 1 million followers): average minimum price $1,200
TikTok is one of the hottest platforms lately. Here’s how much money a TikTok influencer charges, according to the 2022 survey mentioned above:
- Nano-influencers (1K-5K): $4 – $25
- Micro-influencers (5K-20K): $14 – $50
- Mid-tier influencers (20K-100K): $30 – $145
- Macro-influencers (100K–1M): $151 – $793
- Mega-influencers (over 1 million followers): average minimum price $1,034
Facebook is one of the more traditional networking platforms, but it still offers advertising opportunities for brands that target an older audience.
- Nano-influencers (1K-5K): $25 – $100
- Micro-influencers (5K-20K): $100 – $800
- Mid-tier influencers (20K-100K): $800 – $2,500
- Macro-influencers (100K–1M): $2,500 – $10,000
- Mega-influencers (over 1 million followers): $10,000+
These price ranges are found in a survey that depicts the average cost paid per influencer marketing post in the US.
Note: All of the above values are estimates and come from surveys or relevant studies and statistics. Obviously, they may not correspond to actual prices, but they will give you an overview of the market.
Now that we’ve clarified the influencer payments on different platforms, it’s time to learn more about how to evaluate influencers before making an offer.
What to Look At When Pricing an Influencer
When it comes to making an offer to an influencer, there are a few things to consider to maximize the benefit of the relationship and help make the campaign a success.
To create an offer, you have to evaluate many factors to make the right investment.
Consider these four factors:
- The creator's metrics: As we mentioned in a previous section, aspects like engagement rates, type of content, and industry affect influencer payment rates.
You should collaborate with creators who resonate with your brand values and whose audience demographics are a good fit for your products or services.
Creator payment rates might be higher for your niche.
- Profit margin and influencer marketing ROI: Before you jump into an influencer marketing campaign, estimate your profit margin and ROI.
It’ll help if you know the cost per acquisition (CPA). If this cost is lower than the revenue you get from your client, then you should proceed to an influencer campaign and determine the price you’re willing to pay to get these clients.
According to a survey, every dollar a brand invests in influencer marketing generates $18.
So, make your calculations to estimate the appropriate price for your offer.
- Previous campaign performance: A safe way to estimate your offer is to ask the creators to share their results from past campaigns.
You can even contact the brands that have worked with the influencer you’re considering partnering with to discuss and evaluate the collaboration.
This way, you can determine how your campaign will perform and make a fair offer.
- Influencer rate cards: We encourage you to create scorecards to rate influencers based on the above elements.
In case you want to launch a campaign with many influencers, you’ll know how to make custom offers based on the expected outputs.
Clearly, pricing correctly is a matter of experience, and it takes time to learn how to evaluate your partners.
But there are also tools that make the process easier and can help you evaluate your offers.
4 Tools For Managing Influencer Payments
With the growth of influencer marketing, a new need emerged in the market. As a response, platforms that can help brands manage the entire influencer partnership lifecycle have been developed.
Clearly, if a brand’s needs are simple, solutions such as a spreadsheet or a basic budget-tracking tool may be sufficient.
But for campaigns with multiple creators, tools to help organize quotes, manage payments, and calculate ROI are essential.
These tools monitor the performance of creator partners and collect data for future use.
We’ll learn more about them below.
Tool #1: Insense
Insense is an all-in-one solution for running UGC campaigns with creators.
Insense allows brands or marketers to easily manage the influencer partnership process.
With Insense, you can find matching creators, communicate with them, manage your campaigns, and even automate the licenses, payments, and agreements.
The payments process follows a few simple steps:
- Straightforward legal agreements – since creators apply by responding to your campaign brief, they automatically agree to its terms and conditions
- Full digital copyrights – you can reuse any content you commission on Insense
- Automate creator payments – the billing system helps brands automate the process and it ensures all creators get paid for their delivered content
We've created a way for both brands and creators to ensure they get the value they agreed upon.
Contact us and we’ll guide you through our platform!
Tool #2: GRIN
GRIN is a creator management platform that helps brands leverage content creator relationships.
The platform handles the payments, commissions, and tax compliance and you can use it to track payment history and analyze your ROI.
GRIN allows discount codes as a payment method to help you achieve the highest return on your campaigns with minimum spending.
Also, the platform helps you ensure that your campaigns are fully tax compliant.
Tool #3: Upfluence
Upfluence is an affiliate and influencer marketing platform that drives more sales through creator marketing.
The platform provides brands with an influencer payment tool to proceed with secure, international creator payments.
Upfluencer’s pricing algorithm benchmarks the creator’s profile metrics to help you make an offer based on estimations.
Therefore, brands can connect their PayPal account for one-click payments and track their transactions.
Tool #4: CreatorIQ
CreatorIQ is an influencer marketing cloud that helps brands disrupt the creator economy.
The platform allows brands to execute payments with global compliance and supports different payment method options.
You can also manage your campaign-related payments while auditing the performance of your investment.
Lastly, CreatorIQ provides built-in privacy and tax compliance guarantees.
It’s time to wrap this up!
Now Over to You
Hey, fellow marketer!
Hope you learned all about influencer payments, how to pay them, and determine the prices through data-driven research.
This process might differ from creator to creator but now you know how to manage it.
Do you need any help to make the whole process easier?
Feel free to book a demo with Insense, and our team members will guide you on how to find creators and pay them through our platform.