Understanding factors that impact influencer marketing cost
Influencer marketing has become an integral part of the marketing mix today. For brands looking to set themselves apart from the competition, establish credibility, and drive action, it’s become essential to speak to consumers through sources they trust, and in a way that actually resonates.
Content creators, be it social media influencers or other types of creators with influential power like Podcast hosts are the ideal channels to deliver these trusted, credible, and engaging messages. But unlike traditional paid or biddable media, influencer marketing cost can vary considerably depending on a number of factors.
However, it’s still important to have a foundational understanding of what average costs might look like for your specific brand and what factors may sway pricing so you can understand how much you need to spend to hit your targets, and make accurate projections.
This article breaks down all the different factors that can affect influencer marketing pricing and what you should keep in mind when allocating budgets for your influencer marketing campaigns.
What factors affect influencer prices?
Influencer marketing cost at a campaign level ultimately comes down to influencer prices, which can vary drastically based on various factors including –
- Influencer location
- Audience location & demographics
- Social media platform
- Content vertical
- Creator size/recent average views
- Seasonality
- Deliverable complexity
- Brand category
- Usage rights & exclusivity
How influencer location affects influencer costs
Influencers based in certain countries like Germany are often more expensive compared to influencers in locations like Latin America, or even the US. Whilst currency value, competition, and audience value contribute to this, an often overlooked part is also taxation laws. Certain countries have stricter taxation and advertising disclosure laws which makes buying influencer space more expensive compared to other countries.
How audience location & demographics impact influencer prices
Depending on purchasing power and audience value, influencers whose audiences are based in specific locations may be more expensive than others, depending on demand, competition, and audience value.
Audiences based in countries like the USA, UK, and similar Tier 1 countries have a higher purchasing power and typically generate higher revenue and LTV. This in turn means they tend to be more expensive than audiences in markets like Latin America, where average disposable incomes tend to be lower.
How social media platform selection impacts influencer marketing costs
Specific platforms will have different pricing standards. For instance, the cost of a mid-sized influencer on YouTube will be entirely different from that of a mid-sized influencer on TikTok.
Besides, the value of metrics is different across platforms, so it’s impossible to use the same pricing standards to make projections and evaluate quotes across platforms.
For instance, for $10,000, you may be able to work with a Twitch influencer with an average of 5000 concurrent views. If you’re used to working with YouTube influencers and evaluating value based on CPMs, this may seem like an exceptionally low view range. After all, an influencer with a similar price quote on YouTube would have to produce at least 500,000 views in order to average out at a reasonable CPM (depending on the vertical & geo).
However, the value of Twitch influencers is evaluated on a CPCV basis, or cost per concurrent view basis, not cost per thousand views. So 5000 concurrent views would actually work out to be a decent and profitable outcome, especially since Twitch consumers are more niche, engaged, and loyal.
So it’s important to remember that evaluating the monetary value of an influencer’s services is not a standard process – every platform has its unique pricing standards and metrics.
How influencer prices change vary based on content vertical
Pricing standards vary greatly across content verticals. This is due to factors like production value, prep, editing complexity, vertical competition, inventory demand, audience commercial value, amongst others.
Amongst content verticals with a heavier male-skewing audience, gaming channels tend to be cheaper compared to verticals like history & war, whereas entertainment tends to fall somewhere in between.
For a heavier female-skewing audience, content verticals like ASMR tend to be cheaper compared to lifestyle influencers who are on the more expensive end of the spectrum, whereas True Crime influencers sit somewhere in the middle.
It’s important to profile your core target audience at first so you can identify which content verticals are likely to be the best fit and extract expected costs based on industry average CPMs for those specific verticals.
How Influencer size impacts influencer rates
In terms of absolute costs, mega-influencers will naturally cost more than nano influencers. So it’s important to evaluate pricing fairness based on CPMs, rather than absolute quotes.
What’s worth noting however, is that talent agents and influencers will often try to justify pricing based on the number of followers or subscribers or all-time average views. However, it’s important to remember that you should calculate CPMs based on recent average views, using the last 12 videos as a reference.
This is essential because influencers may lose popularity over time, so metrics like followers, subscribers, or all-time views are unreliable measures of their current relevance- and you may end up overpaying if you evaluate CPMs based on these.
How seasonality affects influencer marketing costs
Certain periods of the year can lead to surge in influencer pricing. Especially during high consumer spend periods like Black Friday, Christmas, and so on, advertising spend increases, as does the demand for influencer inventory. The surge in demand naturally means a surge in pricing for many influencers, especially the closer you get to the dates.
It may not be possible to ‘avoid’ seasonality – after all, your influencer campaigns may be tied to your wider seasonal marketing plan too. However planning these campaigns well in advance can help you book inventory before it gets sold out, or before creators start applying surge prices.
How deliverable complexity impacts influencer prices
Not all deliverables will cost the same. Even within the same platform, different content formats will have different price points depending on the production complexity, length, use of ‘custom assets’ that leverage the influencer’s likeness, and so on. A ‘bundle’ of multiple deliverables on the same or across platforms will also naturally cost more than a single deliverable on one platform.
So even though two brands may work with the same influencers, they may pay vastly different rates depending on what they’re contracting the influencer to do.
How brand category impacts influencer marketing costs
Influencers may charge different rates depending on the brand and product category as well. Often, influencers may be more open to negotiations for well known brands they are already fans of. On the other hand, lesser known brands and product categories may find it harder to negotiate rates down. For instance, casual mobile games might find it harder to negotiate a reasonable price with a lifestyle influencer compared to a renowned lifestyle brand like Hello Fresh, for example.
How usage rights & exclusivity impact influencer prices
Clauses around exclusivity (i.e, preventing the influencer from working with competing brands for a specific period of time) or usage rights (i.e, rights to use the influencer’s content across other paid and owned marketing channels) can also increase pricing.
When it comes to purchasing usage rights, it’s always best to request this AFTER the campaign has been completed. Including this in every influencer’s contract from the outset will definitely lead to a surge in pricing, but you may not end up using the content from every single influencer. By purchasing usage rights afterwards, you can ensure you’re only paying for those pieces of content you will actually end up using, rather than wasting spend on inflated prices across all influencers.
Final Thoughts: How much does influencer marketing cost?
Unfortunately, there is no absolute answer to ‘how much does influencer marketing cost-‘ influencer pricing can be somewhat of the Wild West. There are so many different variables that can impact influencer prices, that two brands- or even two campaigns for the same brand—will have very different budget requirements.
That said, influencer pricing is always negotiable within reasonable standards, so always place an emphasis on negotiating down rates and understand industry standard prices so you can evaluate if the price you’re being quoted is fair or not.
In specific industries like game or app influencer marketing, it may also be possible to strike performance-based or hybrid deals, especially if content performance is unpredictable across the influencer’s recent content.
Additionally, for specific industries like app and game influencer marketing, where performance-based outcomes are more strict, and marketing and UA mixes tend to be a little leaner, you can follow a step-by-step process to actually calculate how much you need to spend on influencer marketing to create a measurable impact.
The best way to navigate influencer costs is to work with an experienced influencer marketing agency. The best influencer marketing agencies will have –
- Good networks and relations with large number of influencers and talent managers to compare prices and source alternatives
- Up to date knowledge about pricing standards across verticals, platforms, deliverables, geos, and more
- Multiple campaign activations running simultaneously which can be used to create economies of scale scenarios and negotiate lower prices
- Industry average benchmarks for conversion rates and other KPIs which can help make projections and gauge budget effectiveness
Ultimately, influencer marketing cost can vary greatly depending on your brand, objectives, audience, and focus areas; however, it’s important to remember that it’s impossible to see influencer marketing impact without sufficient investment.