The landscape of proper payment for influencers can be difficult to navigate for brand marketers. To create high-quality content, produce content at scale, maintain long-term relationships, and do it all within a set budget is a challenge for many in the industry. To help you understand the factors to consider and best practices for incentivizing and paying different kinds of influencers we’ve created this blog post to be your guide.
5 Factors That Impact Influencer Rates
With a set budget in mind, there are a few influencer factors that play into payment and incentives when collaborating with influencers. There are five factors brands should continue when selecting and paying creators:
- Influencer Persona: Mega- or macro-influencers will always require cash payment, while micro-influencers and below will accept branded incentives (i.e., product and/or gift cards).
- Type of Content: Video content requires much more time and effort from an influencer than it does to create a static photo and therefore requires a higher incentive value.
- Content Value: If a brand repurposes an influencer’s content at any additional touchpoints (e.g. web, OOH, in-store), additional payment may be required.
- Premium Asks: If a brand is asking for anything in addition to content creation (e.g. influencer demand, exclusivity, content usage rights), a higher payment is needed.
- Past Performance: If a brand has worked with an influencer who is a consistent top performer, it may want to consider increasing influencer payments.
5 Brand Factors That Impact Influencer Rates
It is important to take an introspective analysis of your brand when crafting a payment strategy. A good understanding of who your brand is, how you’ll pay influencers, and the budget you have to work with will ensure you make the most effective incentive decisions in your influencer programs.
Here are five factors about the brand that can impact how you pay creators:
- Brand Type: Your brand type or vertical will determine the incentive or payment you provide (i.e., most luxury brands won’t use discounts as incentives and instead use VIP experiences).
- Brand Affinity: Brands with higher brand affinity will have an easier time recruiting influencers and getting them excited to partner and post about your brand.
- Brand Equity: If your brand is lesser known by an influencer’s audience, then you may need to compensate creators more to want to work with your brand.
- Fulfillment Process: Different forms of payment will have different fulfillment requirements. Ideally, you want to have digital fulfillment (i.e. eGift cards or cash via PayPal) in a reasonable amount of time (we recommend within 30 days of completing campaign requirements).
- Budget: Depending on a brand’s overall budget for influencer spend, the budget for payments might be smaller/larger but should always be carefully thought through based on the brand’s goals and influencer persona.
How Do Brands Pay Influencers
There are 6 types of influencer payments and incentives for creators: Cash, Branded Rewards, VIP Experiences, Exclusive Access, Promo Codes, and Product Gifting. While cash is the most desired form of payment for an influencer fee, there is no specific incentive that is inherently better than the others. Take a look at your current or planned program and identify which methods will be most impactful based on your budget and the product or service you plan to promote.
Cash payment is when a brand compensates a creator for sponsored content via check, PayPal payment, or other money transfer methods. Cash is typically the most desired form of payment by influencers. Just because you are incentivizing influencers with cash doesn’t mean that you need to allocate your entire influencer marketing budget towards incentives. Not sure how much to pay creators? Check out our benchmark report which includes industry benchmarks for creator payments.
Branded rewards are when a brand compensates a creator via unique products, swag, product samples, or gift cards. Unlike a generic cash reward, users will receive free branded product in exchange for producing an organic post to share with their online networks. This likely means they are genuinely interested in your brand, making their posts more genuine.
Branded rewards, can also re-engage your influencers in your customer journey. For instance, gift cards can be used towards a future purchase, swag can elevate the offline impact of your influencers, and product samples are your next reviews in the queue. You’re creating new touchpoints while also adding value at every stage.
VIP experiences are when a brand compensates a creator with an exclusive experience like event tickets, free or discounted travel accommodations, or entertainment activities. Buying is an emotional decision. Experiential incentives and rewards have the power to engage the sense and generate positive emotions in the ways that objects do not. They become memories that your influencers consciously and unconsciously associate with your brand, increasing brand affinity, sentiment, and customer value over time. In fact, objects have the opposite effect – once attained, desire diminishes exponentially as focus shifts to acquiring the next thing.
Experiences also align your brand with today’s cultural norms. Wealth, affluence, and the definition of a well-lived life is not measured by what consumers have, but what consumers have done.
Exclusive access payment is when a brand compensates a creator via early, discounted, or unique access to new and existing products or services. In a similar vein of experiences – consumers today want access, not objects. The proof is in some of the most profitable companies today: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.” – The Battle is For the Customer Interface, Techcrunch
What they all have in common, is that they provide consumers access. The battle for consumer engagement will be decided by who can provide the easiest/fastest/best/strongest access. By rewarding influencers with direct lines of access to your brand, products, or desired experiences, you create an intrinsic cycle of motivation to remain influential and reinforce their brand loyalty.
A promo code payment is when a brand compensates a creator via linked discounts or special offers on brand products or services. One of the questions frequently asked is, once someone is proven to be influential for your brand – how do you know that they will stay influential? What you don’t want to happen is for your influencers to spam all of their followers and lose their impact.
One way to guard against that is to provide always-on promo codes and perks on the condition that your influencers continue to deliver value to your brand. Similar to many employee advocacy and brand ambassador programs, as long as they remain influential, they’ll retain access to the reward.
Product gifting is when a brand compensates a creator via product or product samples in a unique way. Often products are stylized in gift baskets or complemented by other products to elevate the compensation experience. Because of the costs associated, value-driven and the added control afforded, product gifting and sampling should be used strategically. Depending on your brand and vertical, product samples can come at a higher cost than promo codes and other branded rewards, often due to fulfillment alone.
When activating influencers to create content, gifting or sampling programs offer you control over the exact product and posting guidelines you want influencers to follow – while still allowing for creative freedom. It’s also an opportunity to recognize and reward high-quality content creators in your influencer program.
How To Pay Influencers
A pre-payment incentive is when brands offer payment to creators prior to their post. Brands use this compensation strategy to ensure sufficient effort is put into creating high-quality authentic content and entice creators to participate in campaigns with guaranteed compensation. Also, when a brand chooses to incentivize influencers with product, a pre-campaign incentive is required – this is what allows an influencer to create the content (i.e., the product). The most common pre-campaign incentives are sending eGift cards for product purchase, sending promo codes for product purchase and free shipping, or actually shipping the product to the influencer.
A post-payment incentive is compensation to creators after content has been posted. Brands leverage post-payment incentives to confirm all influencer contract requirements have been completed. For instance, if a brand required an influencer post 2 Instagram Stories and 1 static post, they would then deliver the incentive to the influencer after all content requirements have been completed. The most common post-incentives typically include gift cards or cash.
Performance-based incentives are when a brand compensates a creator based on key metrics of content performance like impressions, engagements, or clicks. Brands use this method to encourage influencers to create impactful content and gamify the collaboration. In other words, a brand can reward influencers when they drive a conversion vs. being rewarded just for sharing or producing engagements. This is particularly common when executing an affiliate program.
Surprise & Delight
A surprise & delight payment strategy is when brands compensate creators via unexpected products or gifts. Brands use this method to bolster positive sentiment and create long-term relationships with influencers. A surprise & delight model works particularly well if a brand has smaller incentives and rewards budgets, or passionate influencers who don’t necessarily require a robust incentive and rewards strategy to motivate them to post about your brand. It demonstrates that you not only value your customers, but provides that customer with an exclusive experience that elevates their positive feelings towards your brand while creating major fomo.
How to Pay Different Influencer Personas
Macro-influencers should be paid cash incentives. These incentives will need to be negotiated based on a variety of factors including, but not limited to: average impressions per post, average engagement rate, comment sentiment, audience demographics, exclusivity, image rights, and costs associated with content creation.
Most influencers will share a media kit with the marketer breaking down their analytics and audience demographics as well as a rate sheet with initial price points. Keep in mind that influencers are used to negotiating, especially with a brand that aligns with their values, so use any listed pricing as a starting point. Working with influencers on a long-term partnership is also a great way to negotiate many posts for one fee.
In general, an average industry-wide CPM range of $3 – $10 is a good benchmark when considering the average impressions an influencer’s post receives. However, there are always exceptions to this rule.
Micro-influencers can be paid cash, gift cards, products, or a combination of these. Considering the average industry-wide CPM range of $3 – $10 as a good benchmark, for micro-influencers, you can also include the cost of the product within this CPM calculation.
Gift cards with a specific value allow influencers to selectively opt-in if they are interested and minimizes time for negotiation. Gift cards also incentivize influencers to complete the partnership if they only get paid after they complete the campaign requirements. Cash is preferred among influencers, so consider incentivizing with cash before upping the actual dollar amount.
Note: Some of these incentives may need to be negotiated based on a variety of factors including, but not limited to: average impressions per post, average engagement rate, comment sentiment, audience demographics, exclusivity, image rights and costs associated with content creation.
Advocates, Referrers & Loyalists
For advocates, brands can incentivize with a small gift card ($10 – $25) for the completion of a review or a survey.
For referrers, brands can incentivize with a promo code to use in-store or online for sharing a link, following a page or inviting a friend.
For loyalists, who are truly just fans of your brand, typically no incentive is required.