In 2021 more businesses are leveraging influencer marketing to generate content, raise brand awareness, increase audience engagement, drive traffic and convert followers to customers. 80% of marketers found influencer marketing effective and over 65% of marketers said that they plan to continue increasing the portion of their budget that they spend on influencer marketing.
It’s pretty clear that influencer marketing has established itself as one of the most effective and valuable marketing strategies. But how expensive is it? How much should your brand spend on influencer marketing?
To answer these questions, we put together this article to share some guidelines to help you understand how much influencer marketing should cost.
Influencer Marketing Cost & Pricing
When it comes to how much influencer marketing should cost, it depends on the size of your business and the resources you have available. In our experience, a good rule of thumb is to allocate about 1 – 25% of your marketing budget into influencer marketing.
If you are a small start-up with a limited budget, you should focus on implementing your influencer marketing campaigns in-house. Alternatively, if you are hoping to make a big splash in your industry with influencer marketing and have a budget of at least $5,000 per month, you could consider hiring an experienced influencer marketing agency for a done-with-you or done-for-you approach.
So how much does it cost to run your campaign in-house versus hiring an influence marketing agency? What are the pros and cons of each?
In 2021 more businesses are leveraging influencer marketing to generate content, raise brand awareness, increase audience engagement, drive traffic and convert followers to customers.
Running Campaigns In-house
If your brand is just starting out and you have a limited budget for influencer marketing, a good option for you is to run your influencer campaign in-house. An in-house campaign could cost as little as $0 if you planned and executed it yourself.
Sounds amazing right? However, even though you don’t need to spend any money to run an influencer marketing campaign yourself, it will still include the cost of gifted products, shipping, and your time.
Sometimes when collaborating with influencers, they’re willing to promote your products or create content for your brand in exchange for only your products. This is a common approach for B2C brands with a limited budget. A new skincare brand, for instance, could gift skin-care products to influencers in hopes that they leave a product review. This approach allows brands with a limited budget to partner with influencers.
However, remember that with gifted products there’s usually no agreement or contract with the influencer so your brand won’t have much control over influencer’s content. If there’s no contract with influencers, you probably also don’t have the option to review the content before it’s published. Also, brands often face the dilemma where a percentage of the gifted influencers don’t post at all.
If you’re in the position to invest a little more in influencer marketing, you could pay influencers to feature your brand and products. Influencers that are experienced in promoting products or have a larger audience tend to charge more for a partnership. Since there are contracts involved in paid partnerships with influencers, they are more likely to follow through on the agreement. With a contract, you can also give guidelines about what type of content you would like the influencer to produce and you can include the option to review their content before it goes live. As a result, you get higher quality content and a more successful campaign.
The largest cost of influencer marketing is the time investment required to plan and manage a successful influencer marketing campaign. One of the most time-consuming parts is finding the right influencers that are a perfect brand fit. The process of researching, vetting and negotiating with potential influencers takes up a huge chunk of time. An effective influencer marketing campaign usually take at least three months of effort to see results. Therefore, if you are considering taking care of your influencer marketing in-house, be ready to invest hours of your time each week dependent upon how many influencer partnerships you’re juggling at once.
Working with Agencies
If you have a marketing budget for your business and would like to see substantial results from influencer marketing, hiring an experienced agency to design and execute your campaign is a good choice.
So how much does it cost to hire an agency for influencer marketing? While there’s a wide range of pricing for influencer agencies, we have a range of prices for your reference.
If you hire a full-time employee to run your influencer marketing campaign in-house, it could cost about $3,000-$8000 per month depending on their level of experience. We’ll use this as the benchmark to compare the pricing of some different types of influencer marketing agencies.
There are a few categories of influencer marketing agencies each with pros and cons. Influencer talent agencies keep a proprietary roster of influencers under management. They can pair you up with proven influencers from their network increasing your chances of having successful influencer partnerships. The downside is that their roster is limited compared to the millions of influencers out there. Look for these types of agencies to have a minimum engagement that starts around $2,000 per month and scales up to 10-40% of your total budget for larger campaigns.
A second category of influencer marketing agencies are software-based. They sell you access to their influencer management software platform, and they may even help you manage your campaign on their platform for an additional fee. The best of these platforms have access to millions of influencers, but your team will still need to manage the relationships with your influencers. Expect to pay $500-$10,000 per month or more for access to these platforms. The price depends on the size of their influencer network, the features of the platform, and their maturity in the influencer space. Some platforms also take a percentage of your monthly budget for influencers that’s similar to the influencer talent agencies we discussed above.
The third category of influencer marketing agency is the done-for-you model. This type of agency typically offers white-glove influencer marketing campaign service where you communicate your goals and they do the rest. These types of agencies will usually have both a network of proven influencers as well as access the the latest industry tools and software platforms ensuring influencers are the best fit for your brand. They can be on the more expensive side, but they also provide the most value if you’re looking to execute influencer marketing, see amazing results, and buy back your time.
Are you wondering if you could run influencer marketing in-house, why bother hiring an agency to do it?
Working with a reliable and experienced agency can help you take the guesswork out of influencer marketing. You will be able to work with a team of experts vs hiring one in-house person. Influencer marketing agencies dedicate their time to strategizing and executing influencer marketing campaigns with years of experience. With their expertise, you don’t need to worry about managing an in-house team or going through all the mistakes as you and your team learn influencer marketing from the ground up. Influencer marketing agencies can help you stay on top of the ever-changing influencer trends and social platform features that impact the effectiveness of the various types of social content.
Moreover, having a reliable influencer marketing agency to manage your campaign is more efficient and cost-effective. Since agencies already have established influencer channels and connections, you won’t need to waste time finding and vetting influencers. Working with an influencer marketing agency also allows brands to save time communicating contract, expectations, payments and content reviews with influencers. Instead, you can use your time to focus on tasks in your business that you know and enjoy.
Five Factors that Affect The Cost of Influencer Marketing
In addition to the cost difference between in-house and agency services, there are many factors that could influence the cost of your influencer marketing campaign. In this section, we want to discuss the five most common factors that could affect the cost of influencer marketing.
1. Social Media Channels
The social media channels that your campaign is implemented on affects the cost. For example, YouTube tends to be the most expensive social channel for influencer marketing since long-form videos take more effort to produce. Instagram, one of the most popular social media channels for influencer marketing, has a higher “market rate” than other channels such as Twitter. In addition, the number of channels used for your influencer marketing campaign will change the cost, as well. For example, a campaign that is only implemented on Instagram would be cheaper than a campaign that is implemented cross-channel on Instagram, YouTube and TikTok.
Learn more about the best social channel for your campaign:
How to Choose The Best Social Media Channel for Your Campaign
2. Size of the Influencer’s Audience
Even though the number of followers an influencer has cannot accurately determine the value of the influencer, it is still one of the factors used in quantifying the “influence power”. Therefore, an influencer’s number of followers can affect the cost of the campaign drastically. Typically, influencers with a larger following will cost more to hire. For instance, mega influencers with over 1 million followers can charge tens of thousands of dollars for sponsored content. While micro-influencers with about 10k – 100k followers could charge $50-$1,000 or more per post.
Of course, these numbers are only averages for your reference. The prices vary tremendously from case to case. To know the exact cost of hiring an influencer, you can reach out to them and ask for a quote. There are also free online tools that allow you to simply input an influencer’s social handle and the calculator will tell you an estimated cost for the influencer. These tools are helpful in getting your pricing in the right ballpark but they too are just rough estimates.
3. User Engagement
Since the number of followers cannot always represent the value of an influencer, brands use engagement as another important metric to determine an influencer’s price. Engagement measures how many people actually react to the influencer’s content. A higher engagement rate often means a higher potential audience reach of the content. Therefore, if you collaborate with influencers who can generate high engagement rates, the cost will be higher. At Get Hyped, engagement is one of the metrics that we give the most weight to when choosing qualified influencers to partner with.
4. Product & Industry
Your product and industry can affect the cost of your influencer marketing campaign as well. Some industries are more popular among influencers, such as the lifestyle niche. Since “lifestyle” is a broader segment that has many influencers, the average price tends to be lower. On the other hand, if your brand is in a more specific niche, like consumer tech, where less influencers are available, you might need to pay a higher price to hire the big players in your niche.
5. The Type of Campaign
Finally, the type of influencer marketing campaign you want to run can have an impact on the cost. For example, running a gifted or product-for-post campaign can cost less since the brand only needs to provide free products to influencers in exchange for content and brand mentions. While an affiliate campaign that provides influencers with exclusive promo codes and pays influencers with commission could lead to a higher cost.
Some campaigns that require a larger scope of work also could cause a higher cost of campaign coordination and management. Large-scale influencer marketing campaigns that involve hundreds of influencers, for instance, require the campaign manager to actively be in touch with all those influencers on an ongoing basis. These types of campaigns also require time to coordinate and develop long-term partnerships with influencers. Despite the setup and execution challenges, we have to point out that long-term partnerships with influencers can bring tremendous value to your brand. Long-term partnerships allow influencers to create consistent content around your brand, and this can help your brand to get continuous exposure to your target audience. As a result, the exposure accrues brand affinity that can skyrocket your ROI.
Now do you have a better idea of how much you should invest in influencer marketing for your brand? Remember there is no one-size-fits-all formula to determine the costs of influencer marketing. Each brand and campaign is unique.
Depending on the social media channels, campaign types, the industry, and influencers that you collaborate with, the cost will vary. It’s OK to start with a smaller budget and increase it over time when you are comfortable with the results. Working with a qualified influencer marketing agency can also help you ensure that you are making the best use of your budget and maximizing your ROI.
Do you need help designing and executing an effective influencer marketing campaign for your brand? Send us a message below and we can set up some time to review your goals.