More and more businesses nowadays are leveraging influencer marketing to increase brand awareness, customer engagements, and sales. It’s impressive that 80% of the marketers found influencer marketing effective and over 65% of marketers said that they will keep increasing their influencer marketing spending!
It’s pretty clear that influencer marketing has become one of the most effective and valuable marketing strategies. But is it expensive? How much does influencer marketing cost? How much should you spend on it?
To answer your questions, we put together this article to share some guidelines to help you understand how much influencer marketing should cost you.
Influencer Marketing Cost & Pricing
When it comes to how much influencer marketing should cost, depending on the size of your business and the resources you have, the costs may vary. But according to our research, 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 brand with a limited budget to spend on influencer marketing, you could better leverage your money implementing influencer marketing campaigns in-house. Alternatively, if you are hoping to see substantial results in influencer marketing and have a budget of at least $5,000 per month, you could consider hiring an accountable influencer marketing agency to help you craft a comprehensive influencer marketing plan and manage the whole campaign for you.
So how much does it cost to run your campaign in-house versus hiring an influence marketing agency? What are some pros and cons?
More and more businesses nowadays are leveraging influencer marketing to increase brand awareness, customer engagements, and sales.
Running Campaigns In-house
If you are a small start-up brand and don’t have much to spend on influencer marketing, there is one good option for you – running it in-house. And how much does it cost? It could be low as $0.
Sounds amazing right? However, even though you don’t need to spend the actual money to run an influencer marketing campaign by yourself, it will still have some non-monetary costs such as gifted-products, samples, and time.
Sometimes when you collaborate with influencers, they would be willing to promote your products or create content for your brand if you provide free products to them. This is very common in B2C brands. A new skincare brand, for instance, could provide gifted skin-care products to influencers, usually before the product launch date, and ask them to do a product review. In this way, the brand can leverage the influencers to reach out to their followers and increase brand awareness.
However, remember that with gifted products or “free” agreements, brands probably don’t have much control over influencer’s content and might not have the option to review the content before publishing. Since there is no contract with influencers, brands could face a dilemma where a small percentage of the influencers may not post at all.
Of course, if you want to invest more in influencer marketing and have promising results, you could pay some high-performance influencers to vouch for your brand and products. In this case, you will need to calculate the money that goes to the influencers. Influencers that are experienced in promoting products or have a bigger following, tend to charge more for a partnership. Since there are contracts involved in paid partnerships with influencers, they are more likely to follow through the agreement. With a contract, you could also give guidelines about what type of content you would like the influencer to produce and you could review it before it goes live. As a result, you can get higher quality content and have a better chance to gain potential customers.
Besides the cost of the gifted products, don’t forget about the time that you will be investing in planning and managing the influencer marketing campaign. One of the most time-consuming parts is to find the right influencers that are the perfect brand fit. The process of vetting and negotiating with potential influencers takes up a big chunk of your time. On top of that, an effective campaign usually would take at least three months to see results. Therefore, if you are considering taking care of influencer marketing in-house, be aware of the cost of time that you allocate to the campaign.
Working with Agencies
If you have a marketing budget for your business and would like to see some substantial results from influencer marketing, hiring a reliable agency to manage your campaign is a good choice.
So how much does it cost to hire an agency to manage your influencer marketing campaign? While agencies might charge very differently, we do have a range of prices for your reference.
Typically, if you hire a small team to run the influencer marketing campaign, it could cost about $500-$2500 per month for the service. To hire a specialist agency, it could cost about $2500-$5000 per month. The top 10 most popular agencies serving the largest corporations could charge well over $5000 per month for influencer marketing services. In addition to the agency fee, you will need to allocate a budget to the influencer payments. This portion of the money is used to hire influencers to promote your brand and products. To start out, we recommend at least matching your influencer budget with the agency service fee. In other words, out of your total influencer marketing budget, allocate an equal amount of the budget to the influencer payment and the agency.
For smaller brands though, $1500 – $3000 per month is a good starting point for hiring an entry-level influencer marketing freelancer or agency to manage their campaigns. For premium brands that have a budget higher than that, they can look to hire an expert influencer marketing agency (like Get Hyped) to manage their campaigns.
Are you wondering if you could run influencer marketing in-house at a lower cost, 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 who has unparalleled experience in influencer marketing and social media. 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 and go through all the mistakes of learning influencer marketing from the ground up. Influencer marketing agencies can help you stay on top of the ever-changing influencer trends as well as the ever-changing 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 established good influencer connections, you won’t need to waste the time on building up your influencer network from scratch. Working with an influence marketing agency allows brands to save time from researching, vetting, and communicating with influencers. Instead, you can better utilize your time on enhancing your products and other more important tasks for your business.
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 could affect the cost. For example, YouTube tends to be the most expensive social channel for influencer marketing since long-form videos take a longer time to produce. Instagram, one of the most popular social media channel 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.
Learn more about the best social channel for your campaign:
How to Choose The Best Social Media Channel for Your Campaign
2. Influencer’s Number of Followers
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 would cost more to hire. For instance, mega influencers with over 1 million followers can charge thousands of dollars, if not higher, for sponsored content. While micro-influencers with about 1k – 10k followers could charge less than $500 per post.
Of course, these numbers are only for reference. The price could vary from case to case. To know the exact cost of hiring influencers, you could reach out to them and ask for quotes. There are also free online tools that allow you to simply input an influencer’s social handle and the calculator will tell you the estimated cost for the influencer. These tools are helpful in getting your pricing in the right ballpark.
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 the price of influencers. 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 the metric that we give the most weight on when choosing qualified influencers to partner with.
4. Product / Industry
Your product and industry can affect the cost of the 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 the fitness niche, where less influencers are available, you might need to pay a higher price to hire the big players in your niche. For example, the average price per post in the fitness niche is 43% more than the lifestyle niche.
5. The Type of Campaign
Finally, the type of influencer marketing campaign you want to run could have an impact on the cost. For example, running a gifted or product-for-post campaign could 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. Long-term influencer marketing campaigns such as brand ambassador programs, for instance, require the campaign manager to actively be in touch with influencers. These types of campaigns require time to coordinate and develop long-term partnerships with influencers. Therefore, it could lead to a higher service cost when working with agencies. Despite the higher cost, we have to point out that long-term partnerships can bring tremendous value to your brand. Long-term partnerships allow influencers to create content about your brand constantly. And this can help your brand to get continuous exposure to the target audience. As a result, the exposure accrues brand affinity that can skyrocket your ROI.
Do you have an idea of how much you should invest in influencer marketing for your brand now? Remember there is no one-size-fits-all formula to determine the costs of influencer marketing.
Depending on the social media channels, campaign types, the industry, and influencers that you collaborate with, the cost varies. It’s OK to start with a smaller budget and increase it over time when you are comfortable with the results. However, working with a qualified influencer marketing agency could help you make the best use of the budget and maximize the ROI.
Do you want to find out exactly how much it costs to launch an effective influencer marketing campaign for your brand? Leave us a message and schedule a call with our influencer marketing experts!