Paying social media influencers – a guide for businesses
May 10, 2019
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Influencer marketing seems to be the biggest invention since the wheel. While the idea is ridiculously simple (asking famous people to promote something) and not new at all, it’s the advance of social media that made it all possible.
In the golden era of advertising, Don Draper & Co. would offer massive amounts of money for a celebrity to star in a campaign. And although this is almost exactly what happens in influencer marketing, there’s a big difference: scalability.
Before social media, marketers had to rely on printed and TV ads. And since producing and running a TV ad isn’t cheap, only the biggest brands could afford to do so. The same was true for ads in national newspapers and renting a number of billboards.
This created a very high threshold for potential celebrities to star in a campaign. After all, running a major national ad is only effective if people actually recognize the celebrities endorsing the product. A small business targeting a niche audience with its own niche celebrities had no chance to use this type of marketing.
Today, every single person with a social media account can become a celebrity. Or, as we prefer to call them: influencer.
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Influencer marketing in numbers
Virtually nonexistent a couple of years ago, influencer marketing is one of the fastest-growing segments of the industry.
According to the 2019 Influencer Benchmark Report, influencer marketing is currently worth $6.5 billion, up from $1.7 billion in 2016.
92% of the businesses interviewed for the report believe influencer marketing to be effective. Therefore, unsurprisingly, over half of the respondents spend at least 20% of their marketing budget on influencers. 11% of them even allocate over 40% of their budget to influencer marketing. And 63% of responders plan to increase their spending on influencers for next year.
But what does that look like in real money? Well, according to the State of Influencer Marketing Report, the size of an average influencer marketing budget is between $250,000-$500,000, with 22% of businesses spending in this bracket.
20% spend between $50,000-$100,000, 17% over $1M, while 13% spend under $50,000 and between $100,000-$250,000 respectively.
That all sounds great. But how much to pay for an influencer campaign? And how to pay them?
Unfortunately, there’s not a single and easy answer to that question. To discover the amount you have to hand over to your chosen influencer, you first have to determine a few things.
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Picking the right influencer(s)
First of all, you have to choose which influencer(s) to go with. This largely depends on your industry and your target market.
Who is the person your audience listens to?
For example, if you’re selling sports equipment, your most convenient choice would be fitness presenters, athletes, or health and lifestyle bloggers. But who exactly? The more famous the better? Hardly.
You don’t have to pick larger-than-life, international celebrities. Which is lucky, considering that they’re the most expensive. In fact, you may be better off with lesser-known personalities who are deeply engaged with their followers.
And here’s the next important issue: engagement.
Quality over quantity
If you had to choose between an influencer with 5,000 followers and another with 50,000, which one would you pick?
The right answer? You don’t know. First, you’d have to check out how much they engage with their followers.
In the age of interactivity, simply posting something is not enough any more. Influencers have to answer comments, engage in conversations, and show their followers they truly care about them. Without this, the influencer risks alienating their followers.
Engagement can also prove how real those followers are. In an era where people can buy fake followers, influencers have to prove to brands that they’re genuine and have a real influence on real people’s purchase decisions.
However, the number of followers comes in handy when determining payment. Generally speaking, you’ll be paying influencers with fewer followers less in fees.
To answer the above question, would you choose 5,000 people or 50,000 bots to see your ad? Engagement can help you tell quality from quantity.
The amount you’re paying influencers also depends on the campaign you’re running, and the social media platform your ads will be posted to.
Obviously, posting a single pic would cost less than posting a series of content. Similarly, if you require the influencer to use more than one social platform, the price would go up.
To run the perfect campaign, you need to be aware of your target market’s preferences. If they all hang out on Snapchat or Instagram, you won’t need influencer marketing posts on Facebook or Twitter.
Veem allows businesses around the world to send, receive, and request payments. Cover all your bases.
While the exact amount you’ll be paying influencers will always depend on the actual campaign as well as the platforms and people involved, here’s a list of rough estimates you can calculate with.
Currently, Instagram is the hottest platform for influencer marketing, with 78% of all influencer campaigns running there. YouTube and Snapchat are also frequently used for this purpose. Interestingly, Facebook lags behind, with only 2% of influencers working on this platform exclusively. Similarly, Twitter is not big on hosting influencer campaigns either.
You can expect to pay around $10 for every 1,000 followers your chosen influencer has. If you’re up to paying influencers by engagement, then the average cost is $250-$750 per 1,000 engagement.
YouTubers charge around $20 per 1,000 subscribers. Alternatively, you can pay them per video views, in which case the price would be between $50-$100 per 1,000 views.
Snapchat posts cost $10 per $1,000 followers, or $100 per $1,000 views.
Paying influencers – how?
If you’re looking for the easiest way to send payment to your influencers, try Veem. Fast, secure, and trackable payments guarantee your money gets to its destination anywhere in the world while you save on bank wires and enjoy favorable FX rates.
Influencer marketing is on the rise. If you want to make the most out of the hottest marketing trend, allocate a portion of your marketing budget to paying influencers and develop catchy, engaging campaigns.