Influencer Marketing

How Much Should Brands Pay Influencers? 4 Influencer Marketing Benchmarks to Determine Influencer Compensation

By March 7, 2019 No Comments

How much should I pay influencers on to create content?

When marketers report that among their biggest influencer marketing challenges is ‘finding the right influencers,’ it often comes down to the fact that their influencer mix and influencer marketing budget do not align with their overall influencer marketing strategy. Influencer compensation budgets can make or break influencer campaigns.

What makes the dynamics of influencer compensation so difficult is that there is no standardization and the model is always shifting. Even Reddit is experimenting by giving users the ability to tip creators they love. While many influencer marketing benchmarks are available, in the least, for social metrics like average engagement rate and impressions per post, influencer compensation remains uncharted territory.

Some social influencers charge thousands of dollars for a single Instagram post (Kendall Jenner was allegedly paid $250k for her FyreFest post), but there are many influencers who create content in exchange for free product. Concurrently, there are marketers who want an Instagram story, three social media posts, and six months of vertical exclusivity in exchange for free product. And while there are many factors to consider – the value of the product, influencer demand, and content usage rights notwithstanding – there is a massive need for alignment on appropriate influencer compensation rates if trust and healthy relationship are going to be maintained on both sides.

As an influencer marketing platform, we encourage marketers to take a data-driven approach to influencer incentivization and compensation by leveraging a mix of influencer marketing benchmarks and contributing cost factors to determine accurate influencer budgets.

Initial factors to consider include:

  • The influencer persona(s) a brand is activating
  • The social platform that activation is occurring
  • The value of the content created, including services contracted by the influencer to create the content
  • The cost of the product, incentive, or rate offered
  • Any premium considerations, such as influencer demand, exclusivity, past performance, and content usage rights

Every brand, product, and influencer is different, so often research can validate the brand’s assumptions on market rates. For instance, prior to influencer campaign activation, marketers can survey a small, relevant group of target influencers to better understand what types of incentives and compensation are most likely to encourage the desired campaign outcomes.

These factors help ensure the proper balance between motivation for the influencer and return on investment for the marketer. But that still leaves marketers little context for how arbitrary influencer rates compare to the rest of the influencer marketing industry. We also encourage marketers to employ a number of tactics that better enable them to design an influencer incentive framework that drives desired results based on influencer marketing benchmarks derived from historical influencer compensation data and performance.

With an understanding of the factors above, use the following influencer marketing compensation and performance benchmarks below to inform and validate your influencer budget and strategy.

Average Incentive Cost per Post (CPP) by Follower Count

Average Incentive Cost per Engagement (CPE) by Follower Count 

Average Engagements per Post by Follower Count 

Expected Engagement Rate on Influencer Content by Vertical (Instagram) 

Even when your influencer incentive and compensation strategy is working, it’s critical to remember that what works well for your influencer campaigns one month, might not the next. Marketers must make sure that their incentives are appropriate (that the product value is at least, if not exceeds, the benchmarked per-post metric), prioritize long-term influencer relationships, and also consider adjusting their influencer strategy and metrics based on changes in the competitive landscape (i.e. holiday season).