Influencer Rates: Metrics you should know
With an 18.8% annual increase from the $13.8b value in 2021, the influencer marketing industry is estimated to reach $16.4b in 2022. Although the growth rate has slowed down compared to last year, the industry’s growth has still been impressive since 2016. Back then, the market size was one-tenth of what it is today, namely $1.7b.
Graphic by Oberlo
Accordingly, it is only logical that the number of companies wanting to work with influencers is also increasing, which means that influencer marketing should be an integral part of any mainstream branding strategy. In general, then, one could speak of a synergy of conventional advertising with celebrities and content-driven marketing strategies.
While the importance of influencer marketing is now undeniable, many companies are still in the dark regarding influencer rates, because one thing is less talked about: Money. That is why Kolsquare is now giving you insights into pricing models and influencer metrics you should know before planning your next campaign.
The most difficult thing is that there are no standard rates for influencer marketing. Kylie Jenner, for example, part of the popular Jenner-Kardashian clan, gets $600,000 per post and primarily promotes luxury fashion and beauty brands. But even though the highest-paid stars get up to a horrendous amount per post, that is obviously not the average.
Five Metrics to Help with the Math
So while it is impossible to give a universally valid answer to the question of prices for influencers, there are definitely indicators that help with the calculation.
1. Campaign Goal
First of all, you should be aware of what the goal of your campaign is. Do you want to increase brand awareness? Then you need influencers with a large reach. Do you want to gain a particularly high conversion and accordingly a large number of deals? Then you need influencers with a high engagement rate.
Consequently, prices are generally based on the number of followers and engagement rates (keep on reading to find out more). Also not to be neglected is the coverage of production costs, which influencers may have and of course vary depending on the content.
Most often, the calculation starts with this basic formula (also called cost per-mille act, or CPM for short), with the unspoken standard of $100 per 10,000 followers in the industry:
Engagement price per post + premiums for type of post (x number of posts) + additional factors = total price.
2. Audience Credibility
Additionally, you can be guided by these personal factors: popularity (star power), creativity or uniqueness. Many followers will not help you and your campaign goal if they are “fake followers” and therefore not profiles of real people.
The Kolsquare Credibility Score is particularly helpful. The specially calculated percentage by Kolsquare Technology determines a score out of 100 possible points for each influencer profile. This indexes the quality and authenticity of the audience.
3. Key Data about Influencers
So now before you negotiate a cooperation with an influencer, you should do a thorough research and gather all the information you can find. According to this, you want to find out if the influencer’s audience is now in line with their target audience.
Kolsquare technology helps here too: it collects all the data about the growth of each influencer’s community on the respective platforms on which they have profiles and post content. Kolsquare then creates clear statistics and graphs that you can use for your next campaign and take more targeted action!
4. Engagement Rate
Data on engagement as well as view rates are also simple and important indicators for calculating the price of an influencer. For Instagram in particular, Kolsquare has developed a tool that determines the value of each influencer. Using the mathematical formula of the KOLculator, stories (three on average) and posts of an Instagram profile are analyzed. Earned Media Value (EMV) and market trends are also taken into account.
Experience shows that influencers often underestimate the value of their work and brands often overestimate the value. The KOLculator and the Kolsquare data collection provide a realistic assessment and are therefore valuable for your next campaign. In addition, Kolsquare estimates the value of all registered influencers on our platform and the value of their content on other social media, such as YouTube, Facebook, Twitter and soon TikTok.
5. Influencer Reach
As mentioned before, influencers’ reach plays an important role in calculating their price, because besides megastars like Kylie Jenner, there are many more content creators who could be beneficial for you. Depending entirely on your brand’s needs and desires, this can vary for each specific campaign!
Roughly, a distinction can be made as follows:
- VIP > 5M
- Top > 1M
- Macro > 250K
- Mid > 50K
- Micro >10K
- Nano >1K
Overview of the Pricing Models for Influencers
We have already explained the basic formula for the general calculation, but there are other pricing models besides this one.
- Cost-Per-Engagement (CPE) = cost per interaction, for example like, comment or click.
- Affiliate = payment for performance based on previously defined conversion (for example, click, purchase, etc.)
- Daily rate or annual cooperation = payment based on contractually defined and negotiated scope of performance
- Buy-out = purchase of rights and licenses
- Contribution-dependent (depending on length and time required)
Table inspired by Reachbird
Ultimately, the type of desired content must be discussed: What makes the most sense for the campaign? What is the influencer known for or what is he or she particularly good at? Should it be pictures or videos, posts or stories? Is an unboxing, sweepstakes, tutorial or live event desired? Are you planning an account takeover or giving out discount codes?
You will also need to clarify in advance who will retain the rights to the content you create once it’s published. Pro Tips: Copyright laws can vary by country! You may also need to include agency fees in your budget.
Now that a good understanding of influencer metrics has been established, Kolsquare recommends contributing to the proper budgeting for your next influencer marketing campaign: https://www.kolsquare.com/en/blog/how-much-does-influencer-marketing-cost-in-2022/