How to set a budget for influencer marketing campaigns

As the influencer marketing landscape evolves, the professionalization of influencers is changing relationships between influencers and marketers. For marketers, learning how and why influencers charge the rates they do is essential to effective budgeting and execution of campaigns.

Rarely do influencers charge a flat rate, preferring to set prices according to market evaluation. Factors that come into play include: reach and engagement, channel, number and type of post, the effort required by the campaign, ad placement, and agency fees.

Read Kolsquare’s recent study on the development of influencer marketing and how to budget for campaigns here.

via Hypeauditor

Which Influencer for which campaign?

When deciding what to pay influencers, it is worth thinking about them as individual small businesses: each will charge a different fee depending on unique variables. These may include an influencer’s age, audience, reach, sector, content licensing rights, sampling and travel costs, or social security contributions.

Gen Z influencers charge more than older influencers, as do those with more followers. As such, categories have emerged to define different levels of influencers.

Nano-influencer: 1,000 – 10,000 followers

Micro-influencer: 10,000 – 50,000 followers

Medium influencer: 50,000 – 500,000 followers

Macro-influencer: 500,000 – 1,000,000 followers

Mega-influencer: 1,000,000+ followers

Generally, influencers are paid per post based on the sector and the platform used. In 2022, Instagram, TikTok, YouTube, Pinterest, Snapchat, Twitch, Twitter and Facebook are the dominant platforms for influencer marketing.  

The costs for each platform are determined according to cost per thousand (CPM), a marketing term that denotes billing per 1,000 views.

What about other costs?

Prices also depend on how many influencers operate in the sector. In popular industries like beauty and fashion, prices are lower, but in niche sectors where fewer influencers compete, prices can be higher.

Be sure to check first for any special costs that an influencer may incur during their course of the brand mission, such as content licensing rights or travel costs to attend an event. Product samples are also usually required for testing and content creation.

In some countries like Germany, artists’ social security contributions are levied for artistic or journalistic services.

See page 19 of Kolsquare’s study for a closer look at the average fees per KOL, by post, and by social network.  

Hone your negotiating skills

Effective, friendly negotiating skills are essential to keeping costs reasonable, and to maintaining healthy relationships with your influencers. Don’t forget that KOLs are experts and opinion leaders in their respective fields. Their followers trust them and value their recommendations. As such, as well as having a great product, choosing a suitable compensation model and finding a common basis for cooperation is crucial. Transparency is key! Marketers must clearly communicate campaign objectives and expectations (posts, stories, videos, lives, reels, etc.) and set fair but firm deadlines.

Collaboration opportunities range from shoutouts, sweepstakes, takeovers, affiliate marketing and sponsored content to seedings and gifts. Don’t forget, sending free sampling without a firm arrangement in place is likely to fail. Long-term relationship building fosters brand loyalty and credibility.

Kolsquare’s Instagram KOLculator

When agreeing to an influencer fee for your next campaign, consider these factors: ROI, previous campaign performance and average rates per medium, per platform. When working with new influencers, ask to see their rate card or rate sheet, which shows the rates creators charge for specific services.

And if you haven’t already, check out our KOLculator, to help you calculate rates for rates for sponsored content on Instagram. This free tool is available for use by brands, agencies and influencers here:

Calculate prices for sponsored content on Instagram with the KOLculator.

The KOLculator formula for three posts (feed or stories) is based on market trends and earned media value (EMV). The interaction rate and number of followers are also factored in.

While creators often underestimate the value of their content, brands tend to focus on subjective criteria, which can lead to overpayment due to low ROI. Keep in mind that prices vary and should be individually adjusted.

Influencers registered with Kolsquare also receive bespoke pricing calculations for YouTube, Facebook, Twitter, and TikTok. For more information on budgeting your next influencer marketing campaign, check out our free studies and keep an eye on the Kolsquare blog for regular industry news and reports.