Influencer marketing has become much more than an add-on to a wider campaign. It’s now one of the most in-demand areas of marketing, with 75% of marketers stating that they are willing to increase their influencer spend.
The question on everyone’s lips right now is how to choose the right influencer. It’s a highly saturated market, and there are a plethora of influencers to choose from, from long-standing professionals to emerging micro-influencers. There are clever tools which can help, there are specialists and there’s heaps of useful advice already in the marketing press. However, it shouldn’t be the only question that brands are asking.
I’ve found that there’s one critical phase that is often overlooked when working with influencers – the negotiation phase. For advertisers and agencies, this comes after you’ve formalised your partnership with your influencer. You’re happy with your choice, they are the right fit for your brand, but… what on earth do you pay them?
It’s a hugely important question that will ultimately establish how the brand and influencer collaboration will unfold.
At the moment, there are no widely-shared industry standards to help marketers navigate either how much an influencer should be paid, or how that translates into results. A recent study by Rakuten and Morar established that 86% of marketers weren’t entirely sure how influencer fees are calculated, and 38% couldn’t tell whether a campaign has driven sales. This lack of knowledge and understanding is playing against the industry.
Even in today’s data-led world, brands still frequently go by ‘feel’ rather than solid metrics, often looking to past partnerships and previous experiences to decide their fee. And yes this can help - you’ll find that depending on the activity, you'd expect to pay somewhere in the region of £5,000 to £15,000 for an emerging influencer, and upwards of £30,000 for someone more established. Although, it varies hugely and can almost always be negotiated - no two influencers are the same and brands lose their leverage if they start their relationship in this way.
Financial negotiations, in any aspect of life, always come with challenges and influencer marketing is no different. But as marketers, we should never be afraid to ask questions.
A combination of hard and soft metrics should be considered in order to arrive at a fee with an influencer. These include: the nature of the partnership – a one-off versus a long-term partnership; the level of involvement – original content creation versus sharing; the size of the influencer audience and their engagement; the number of pieces of content required, usage rights, value of the product provided, exclusivity, and a very long etcetera.
And what happens when the influencer requests a higher fee than the one you calculated? Ask more questions. Questions like, is the chosen influencer effective at driving visits to a site? If they recommend products, do those tend to sell out? Does their content resonate with a specific audience that will help your brand drive consideration?
As the influencer marketing landscape becomes more sophisticated, and fees increase, I hope to see more transparency. Although, as this is a business based on relationships, arriving to a set-in-stone industry standard will be difficult. There is the issue of affinity - I’ve known influencers who have lowered their fees because they absolutely loved the brand who approached them, others have done the opposite when a brand offered a place in a project they are not so passionate about. And there’s also the common mistake of trying to understand the impact of the influencer activity by comparing it to the usual CPM and CPE figures that we get from other types of advertising, when the nature of the activity is completely different.
But for now, if we want to raise standards in the industry, at the very least we need to do our due diligence when setting fees. Marketers should not be commissioning expensive posts without understanding their real impact.
I had a chat with an influencer recently, and I asked them if brands were asking for average views, clicks or any other metric, before setting a fee. “No, that has never happened” they responded. “Sometimes, they never even ask for the results of our work together”, they added.
We can’t keep negotiating in the dark. Marketers, it’s time to raise the bar.
Florencia Lujani, influencer marketing manager at We Are Social she tweets @FlorLujani