Eye-popping headlines suggest that some influencers are making staggering amounts posting content on behalf of brands, and there is very little doubt that the biggest influencers are making (not-so-)small fortunes from their content.
But how much does the average influencer really earn when a brand pays them to promote their wares?
According to a study by influencer marketing software platform Klear, which surveyed more than 2,500 influencers, influencers earn on average between $41 to $3,138 for sponsored Instagram posts, $31 to $2,400 for sponsored Facebook posts, and $315 to $3,857 for sponsored YouTube videos.
The low figures represent the averages for nano-influencers, which Klear defines as influencers who have between 500 and 5,000 followers. The high figures represent the averages for celebrity influencers with more than 500,000 followers.
The difference in costs between platforms is likely based in some part on the effort required to create content. For example, a photo Instagram post likely isn’t as time-consuming to create as a YouTube video.
A similar dynamic appears to affect costs between industries. While Klear found that most of the markets it looked at, including food, fashion and technology, had similar costs all below $550 per post, the average cost of a paid post in the travel industry was a whopping $5,335. As the firm noted, this might be due to the time and effort required to produce sponsored posts. After all, if an influencer needs to travel halfway around the world to take a photo or shoot a video, the costs are going to be significantly higher.
The cost of influencer content in the travel industry is vastly higher than any other. Image: Klear
Follow the money
These figures are far lower than the high five and six-figure payments that are frequently publicized by the media. Influencers who are earning more per post than what most people make in a year are an exceptionally small segment of the influencer population – the influencer 0.1%.
Even so, Klear’s averages are nothing to sneeze at, especially when put into perspective.
For instance, consider the $100 average amount reported by nano-influencers for paid Instagram posts. This number seems small, but that only delivers, at most, 500 to 5,000 potential direct unique impressions (read: one unique impression per follower). To achieve scale, marketers need to work with larger numbers of nano-influencers and it’s not hard to see how that can get comparatively expensive.
Standards to the rescue?
Marketers obviously know this, and with many allocating more dollars to influencer marketing, marketers are more focused than ever on addressing the risks and challenges with the channel.
There is even an Influencer Marketing Council (IMC). Launched in 2017, the coalition of brands, agencies and influencers just released its first list of best practices. The IMC says this is a first step and ultimately it hopes to promote greater standardization for influencer marketing – including vis-à-vis how much influencers are paid.
Sae Cho, director of digital experiences at agency Horizon Media, which is part of the IMC, noted that influencers’ prices increased as influencer marketing budgets increased and told Digiday, “We’re interested in pricing transparency, marketers having a say on how we determine value. With a council we have the buying power together and can say [in our conversations with influencers] this is future proofing your business.”
But is this realistic, and is it even a good idea? Perhaps not.
First, marketers already have a good deal of price transparency and control. Many of the platforms that help connect nano and micro-influencers to marketers already function like marketplaces. When creating campaigns on these platforms, marketers can either specify what they’re willing to pay for sponsored posts or can select influencers who have specified their rate. As a result, it could be argued that ample price discovery already exists in this part of the market.
Most of the members of the influencer 1% work with managers and/or agencies and while they might have rate cards of some sort, just as when seeking a deal with a Hollywood celebrity, everything is subject to negotiation. One of the reasons for that: in some cases, conflicts might need to be addressed. Mega-influencers are increasingly launching their own brands, for instance, and they aren’t likely to post sponsored content from a competitor.
Second, understanding that one-off sponsored posts often can’t move the needle, more and more brands are seeking to establish long-term relationships with influencers. That complicates the subject of pricing because no two commitments of this kind are necessarily alike.
Finally, while a broad unwillingness on the part of brands to pay influencers amounts that can’t reasonably be justified by sensible metrics like ROI would help reign in influencer demands for exorbitant sums, the reality is that an influencer’s worth to one brand can be significantly higher or lower than an influencer’s worth to another brand.
There are a whole host of factors that influence (no pun intended) an influencer’s value to a brand. These range from the makeup of the influencer’s audience to the actual performance of their campaigns.
At the end of the day, while influencer marketing will benefit from standards and knowledge sharing, marketers are wise to focus on what works for their brand instead of worrying about how much others are paying influencers, and what influencers are asking to be paid.
After all, despite the billions of dollars being allocated to influencer marketing, shockingly low percentages of marketers are using trackable links and measuring the revenue generated by their campaigns.
As with any other digital channel, only the marketers who figure out the ROI puzzle can ensure their efforts are worthwhile and position themselves to take advantage of less adept competitors.