Influencer Marketing Pricing, Costs & Budgeting

How Brands Budget for Influencer Marketing

While there is a tremendous range across brands, influencers often constitute 20 - 50% of marketing media spend for brands. The most common approach to budgeting for influencer marketing is where a brand sets a fixed monthly budget and in turns allocates a subset of that budget to individual creators. Pricing for individual creators is often based on CPM logic, historical creator performance, creator vertical, content complexity, exclusivity, and usage rights. Higher-quality creators often command higher rates because they drive better outcomes, meaning that lower CPMs are not correlated with higher performance campaigns. 

How Influencers Get Paid

For creators at scale the most common payment structure is a flat fee. While it is true that there are a variety of compensation structures including flat fees, cost-per-view, performance incentives, affiliate commissions, or hybrids – most creators at scale prefer and require a flat-fee model given that affiliate models don’t compensate creators for the brand-building aspects of their content. Additionally, once creators have been burned by issues not of their making (like issues with websites or tracking systems), creators are unlikely to participate in affiliate models.  

Affiliate marketing is typically based on a fee for purchases attributable to the creator, with a baseline flat-fee increasingly common. Affiliate models are typically with smaller creators, often averaging up to 20,000 views per piece of content.

How Much Should Influencers Charge?

In short, creator rates should be based on market rates. If creators have more brand sponsors than they have content that they are willing to have sponsored, creators should raise their price. And if the creator has lower demand for brand partnerships than they prefer, creators should lower their rates. While imperfect, the market does tend to be fairly efficient over time.  

Creator prices are generally based on audience trust, engagement quality, production effort, and historical results. Influencers operate as media businesses and price reflects the demand for brand partnerships and the supply the creators are willing to offer. Sophisticated agencies are able to track creator brand partnership track-records, allowing brands to partner with creators who have regularly moved the need for brands.