How did you choose the last restaurant you ate at? Who told you about that new brand you can’t seem to get enough of?
Chances are, there’s at least one thing in your life you’ve adopted because of influencers. They’re akin to trusted friends who constantly recommend new products and places, only they do so on a larger scale.
Influencer marketing has become one of the most popular marketing trends today. And, considering the results it delivers for brands, it’s here to stay.
There’s only one problem: Brands and influencers don’t always agree on payment models and value. Sometimes, there’s a significant gap between businesses’ marketing budgets and influencer expectations.
But not to worry—here’s an in-depth look at how to pay your influencers.
Note: The influencers and brands discussed below were found during our online research.
In this article:
– A breakdown of how much marketers spend on influencers
– Types of influencers (and their value to marketing campaigns)
– Top ways to pay influencers
– Do influencer payments change based on the social media platform?
– How to pinpoint how much to pay creators and influencers
– Best practices to follow for social media influencer payments
– Helpful tools to manage your influencer payments
A breakdown of how much marketers spend on influencers
Predictions show that the influencer marketing industry will reach a whopping $37.38 billion by 2027. This value reveals just how much businesses are willing to put toward their influencer marketing budgets.
Costs vary depending on the type of influencers, type of content, social media platform, and target demographic. Generally, businesses can spend anywhere between $10 per post to $1 million and above. Industries spending the most on this form of marketing include fashion, beauty, travel, entertainment, retail, and tech.
The influencer marketing landscape has evolved tremendously over the years. Some years back, influencers would work for gifts and no money. These days, gifts have become the icing on the cake—influencers expect to be paid for their input. While some still accept gifts as payment, you’ll undoubtedly have trouble finding them.
Types of influencers (and their value to marketing campaigns)
As mentioned earlier, costs can vary depending on the type of influencer. Content creators generally fall into one of the following categories.
Nano-influencers
They typically have 1,000 to 10,000 followers. While this isn’t a broad audience, don’t let the numbers fool you. These influencers often have a strong impact on their followers because they’re highly engaged.
Some followers consider them to be online friends or acquaintances, so they trust their opinions. They’re ideal for niche-based or location-based promotions. Elle Linton is a perfect example of a nano-influencer. She’s a brand ambassador for businesses in the fitness niche, like Liv Cycling UK.
Micro-influencers
They have 10,000 to 100,000 followers. Through them, you reach a broader audience than you would with nano-influencers. Despite their large numbers, they still maintain their relatability, so they also have high engagement rates.
They’re also ideal for niche or local campaigns, but they do charge more than nano-influencers. Esthetician Sean Garrette is a micro-influencer working with Dior skincare.
Macro-influencers
They have 100,000 to 1 million followers. This is where many vloggers, podcasters, and TikTok and Instagram influencers fall. Their most significant pro is their broad reach, but they have lower engagement rates than smaller influencers.
They’re suitable for campaigns focused more on numbers than relatability. Niko Valdes is an example of a macro-influencer. He works with high-profile brands that want to reach as many people as possible, like Amazon.
Mega-influencers
This is where the likes of Mr. Beast, Kylie Jenner, and famous Hollywood celebrities fall. They have millions of followers, so they’re suitable for marketing campaigns focused on maximizing reach.
However, they typically have low engagement rates. They also operate across numerous niches, so they may not be the best choice if you’re looking for partners specializing in your industry.
Top ways to pay influencers
One of the most common issues brands face is determining the best ways to pay content creators. To help you, we’ve compiled some of the most common payment methods and explored their pros and cons.
Pay per post
This is the most common payment model for modern influencers. Basically, you pay for each piece of content your chosen content creator posts on their platform. Its greatest pro is that it’s straightforward, as payment is based solely on posts.
But it can be risky, as some influencers may not take the time to connect with your brand or product—after all, they get paid either way. It can also be expensive, particularly when running long-term campaigns and complex content.
Pay rates may also be high when working with influencers with large follower counts, as they charge more per post than nano and micro-influencers.
Gymshark employs a pay-per-post payment model, paying $100 to upward of $5,000 per post. This approach has helped the brand become synonymous with fitness-oriented lifestyles.
Commission-based
Under this payment model, brands pay influencers for direct business outcomes or actions, like sales or link clicks. Its greatest pro for businesses is that they only pay for specific actions. For influencers, it allows them to maximize their earnings since they’re not static.
However, this model also presents some disadvantages. Influencers who don’t achieve agreed-upon outcomes may be unable to earn, and businesses can find tracking all outcomes challenging.
Luckily, there’s a solution for this. With Bitly, you can track the number of link clicks per influencer by creating unique, branded short links for each one.
Various brands are transitioning to commission-based payments to improve their returns on investment. An example is Fern & Petal, which partners with influencers to showcase its wellness products via its Ambassador Program.
Free products or services
This model involves paying influencers with gifts or credits. Its greatest selling point is that it’s cost-effective, as brands only incur product costs. However, it can limit campaign outcomes, as most influencers today expect to be paid for their work.
Some companies have had tremendous success using this model. One such company is Daniel Wellington, a watch brand that received mentions from over 7,200 influencers on Instagram by sending them gifts.
Pay per engagement
This approach involves paying influencers based on their ability to drive interactions with their content. Metrics considered under this model include likes, shares, comments, and views. Essentially, you set a baseline cost for each metric and multiply it by total engagement.
It’s cost-efficient, as it aligns payment with actual results. It also motivates influencers to create high-quality content to maximize their earnings. However, it’s also risky.
Influencers can inflate metrics by engaging followers artificially. They may also focus more on vanity benchmarks, such as likes, over valuable metrics like improving brand sentiment and increasing conversion rates.
Flat fee
A flat fee is a fixed amount of money you pay influencers for their services, regardless of performance. It’s one of the most common payment models, as it’s straightforward for all parties. However, it can be expensive to maintain, as your campaign may not yield sufficient returns to cover the fixed rate.
Fashion companies like Forever 21 use this payment model to increase brand awareness. Influencers get a flat fee for posting pictures of their favorite Forever 21 outfits and tagging the brand.
Performance-based
Under this method, influencers get paid for achieving specific results. It’s economical for brands, as they pay for actual campaign outcomes. However, most influencers are skeptical about it, so it can be challenging to attract them.
You’ll definitely have a hard time finding macro and mega influencers for this type of payment model, as they can secure campaigns that pay them flat fees.
Airbnb is a top brand that pays based on performance. Influencers can feature Airbnb listings on their pages and earn for every booking made through their links.
If you choose this approach, here are some strategies for setting clear and measurable performance targets:
- Define campaign objectives: They could be increasing product sales, boosting website traffic, or increasing brand engagement.
- Identify key performance indicators (KPIs): Your objectives will determine your KPIs. For example, if you want to increase web traffic, click-through rate (CTR) can be an ideal KPI.
- Set SMART goals: Your goals should be specific, measurable, achievable, relevant, and time-bound. Rather than setting a vague goal like “increase CTR,” set a SMART one, like “boost CTR by 10% by the end of the year.”
- Use trackable metrics: Only use metrics that are attributable to an influencer’s efforts. You can use promo codes or attach UTM parameters to influencer links. If you choose the latter, use Bitly’s URL shortener to shorten and brand your links.
Affiliate links
This is a type of performance-based payment model where influencers earn commissions based on conversions. Numerous brands have adopted this approach, including Amazon Associates, which pays influencers for conversions or sales attributed to their affiliate links.
This model is cost-efficient for brands, as it allows them to pay for measurable results, like sales and clicks. However, it can be challenging to attract influencers, as there’s no guarantee they’ll earn from their efforts.
Affiliate links can also affect influencers’ authenticity, as they may prioritize products with high commissions over options that are the most relevant to their audiences.
If you choose this payment model, ensure all your influencers understand the importance of affiliate disclosure. They should always be upfront about earning commissions from links to ensure they don’t mislead their audiences. Also, use a link shortener like Bitly’s to keep your URLs professional and on-brand.
Do influencer payments change based on the social media platform?
Instagram, TikTok, Facebook, YouTube, and Twitter are the top social media platforms for digital marketing. Pay rates differ across these platforms based on factors like:
Demographics: Platforms like Instagram, TikTok, and YouTube are popular with Generation Z because of their visual content. Brands allocate high budgets for the platforms where their target demographics are. For example, a brand with Gen Z as its target audience will pay more for TikTok user-generated content (UGC) than Facebook.
Content types: Typically, companies pay more for content that takes longer to produce, like videos. So influencers on platforms that allow video content often enjoy better pay rates.
Content longevity: Brands also pay more for content on platforms with long lifespans. For example, YouTube videos are likely to stay up longer than Instagram stories, so they usually cost more.
Here’s a breakdown of payment rates across the five platforms (Note: These rates may differ based on follower count and type of content):
- Instagram: $10–$1,000,000+ per post
- TikTok: $5–$2,500+ per post
- Facebook: $25–$25,000+ per post
- YouTube: $20–$20,000+ per post
- Twitter: $2–$2,000+ per post
How to pinpoint how much to pay creators and influencers
Determining how much to pay your influencers can be a daunting task, as you need to find a balance between cost-efficiency and fairness. Here are some factors to consider.
Exclusivity and content type
Maintaining exclusivity prevents influencers from participating in competitors’ campaigns and allows you to maintain long-term partnerships. You need to pay high rates if you expect your influencers to sign non-compete agreements or exclusivity clauses.
You should also expect to pay quite a bit for premium content types like long-form videos, interactive content, and educational content. These content types require a lot of effort and time, hence their high influencer rates.
Industry or niche
Some industries command higher rates than others. For example, tech companies typically pay influencers more than travel companies. Research niche-specific market rates to determine how much to pay your influencers.
Influencer demand
Like everything else, supply and demand also affect influencer rates. Typically, influencers charge more if they’re in niches with fewer content creators. For example, a finance influencer will be more expensive than a fashion and beauty influencer, as the latter market is saturated.
You’re also likely to pay higher if you plan to run a seasonal campaign, like a Christmas campaign, as influencers are in high demand during peak seasons.
Expected ROI
Your return on investment (ROI) should match your influencer rates. This is not only fair but also serves as motivation—they’ll be willing to work harder.
You can project your campaign’s ROI by assessing your influencers’ reach and engagement. If you assess ROI by reach, macro and mega influencers will require higher rates. If you gauge ROI by engagement, nano and micro-influencers have the upper hand.
Campaign scope or duration
Brands typically pay less for long-term partnerships with influencers as they can negotiate for lower rates per post. In contrast, wider scopes may require higher rates. For example, you may need to adjust your influencer rate if you expect your content creators to participate in cross-platform promotion.
To budget for long-term or large-scale influencer campaigns:
- Negotiate with influencers for better rates.
- Determine how much it will cost to partner with the influencers for your desired period.
- Encourage influencers to repurpose content across different social media channels to minimize costs.
- Break down your campaign into phases and allocate a budget for each one.
- Set aside a contingency fund for unexpected expenses or other opportunities.
Best practices to follow for social media influencer payments
Now that you know how to determine appropriate influencer pay rates, let’s examine some best practices to follow for a successful influencer marketing campaign. Here are some insights from industry experts.
Keep communication about payment transparent
Poor communication concerning payment can affect your working relationship, limiting your campaign’s success. Be clear about your campaign objectives from the beginning. If you plan to assess your influencers’ performance using metrics like CTR or conversion rates, let them know early and discuss how they’ll impact payment.
Conduct market research for influencer rates
Market research can prevent you from overpaying or underpaying your content creators. See what other brands in your niche are paying for various types of content to determine a fair rate. You can get this information from influencer marketing agencies or platforms and social media analytics tools.
Formalize agreements in writing
Contracts keep businesses and influencers accountable. Draft agreements for all your campaigns to prevent misunderstandings and enhance professionalism. Key elements to include in your agreement include:
- Expectations: Define the scope of work and deliverables.
- Timeline: State the expected campaign duration.
- Compensation: Specify the agreed-upon rates and relevant metrics.
- Confidentiality clause: Include this clause to protect any sensitive information you’ll share with your influencers.
- Mechanism for dispute resolution: This will save you a lot of time and headaches in case of disagreements.
Ensure compliance with laws and regulations
The Federal Trade Commission (FTC) regulates influencer marketing in the United States. The agency requires influencers to disclose their relationships with brands conspicuously. Make sure your influencers understand this requirement to avoid fines.
Some states have their own regulations as well. For example, California requires influencers to highlight sponsored content in a way that their target audiences can easily understand. Many influencers include #ad or #sponsored in sponsored posts. Research each state’s requirements to ensure you remain compliant.
Focus on building relationships
Long-term relationships allow influencers to seamlessly integrate brands into their content, presenting a more genuine promotion. It also allows brands to maintain cohesive images throughout their campaigns. Build relationships with influencers by:
- Paying them fairly and on time.
- Maintaining transparent communication throughout your working relationship.
- Seeking feedback for improvement.
- Giving them creative freedom.
- Acknowledging their contributions and rewarding them for exceeding targets.
Helpful tools to manage your influencer payments
Incorporating technology into your influencer marketing campaigns can make the payment process more seamless. Here are some helpful tools to help manage your payments.
Grin
Grin is an influencer management platform designed to help you discover and manage content creators under one platform.
Key features include:
- Product seeding feature for distributing products.
- Reporting analytics tool that allows you to track your ROI.
- Relationship management feature that helps you negotiate contracts and communicate with influencers.
PayPal
PayPal is available in over 200 countries and supports over 25 currencies, making it one of the best tools for companies with a global focus. With the platform, you can work with influencers from all over the world and ensure they receive their payments on time. You can pay with debit or credit cards, bank wires, and global ACH transfers.
Creator.co
Creator.co supports influencer marketing by seamlessly connecting content creators and brands. The platform has over 200 million profiles across YouTube, Instagram, and TikTok, making it easy for brands to find suitable partners. It also gives businesses a single dashboard to manage payment information and campaign details.
Upfluence
Upfluence is an influencer and affiliate marketing platform that leverages AI to boost brands’ marketing strategies. The platform facilitates seamless payments by allowing brands to link their PayPal accounts for one-click payments. It also contains a product seeding feature that lets you send products to your influencers.
QuickBooks
You can only make timely influencer payments if you practice proper financial management, and QuickBooks can help with this. Through the software, you can:
- Create professional invoices for influencer payments.
- Track all influencer-related expenses, including product samples, travel costs, and actual influencer payments.
- Track income generated through influencer marketing.
- Budget for influencer marketing campaigns.
Use Bitly to manage your influencer marketing campaign
Many brands are turning to influencer marketing to secure sales, increase brand awareness, and boost engagement. But for a successful campaign, you must ensure fair and timely payments for all your influencers.
Bitly helps brands manage influencer marketing campaigns through shortened, branded affiliate links and seamless performance tracking. With your Bitly account, you get deep insight into your affiliate links so you can appropriately gauge your influencers’ commissions.
Get started with Bitly today to improve your performance tracking and build better relationships with your content creators!