Influencer marketing gets brands noticed, often delivering excellent ROI… but how do companies calculate how much they should pay an influencer? Like many other professional services, prices can vary wildly.
Successful Instagrammers invest time and effort into building a strong and loyal following, improving their standing by:
- Creating the perfect bio, identifying who they are and who they appeal to
- Posting regularly
- Using relevant hashtags
- Posting high-quality original photos
- Engaging with followers
Established influencers often require a set fee to endorse a product or service. Alternatively, some accept a free product in return for an online review, but as advertising expert Sergey Karshkov will be aware, neither of these approaches is very scientific.
Influencers can generate revenue via a variety of different channels using Instagram, including:
- Sponsored Posts: The most common form of influencer endorsement, this arrangement will typically start with a brand reaching out to an influencer, offering to pay them to publish a sponsored image. To be effective, the post will need to appeal to the influencer’s audience, appearing like a genuine recommendation. In the United States, sponsored posts must be clearly marked as such to adhere to FTC guidelines. Nevertheless, provided that the post is a good fit for the Instagrammer’s audience, marking it #ad or #sponsored should make little difference.
- Affiliate Marketing: Just as bloggers promote affiliate products on their blog, Instagrammers can promote affiliate products in their posts. Sites like Shareasale help Instagrammers to identify suitable products to promote.
- Promoting their own business: Successful Instagrammers, i.e. those large enough to be regarded as an influencer, often promote their own products. Even big names like Justin Bieber use their accounts for this purpose.
Neil Schaffer is a marketing speaker and business author. In his book, The Age of Influence, he outlines different influencer pricing models. Many in the market advocate an Instagram post price of $100 per 10,000 followers, but as Schaffer points out, this approach is not always appropriate.
Several platforms have innovated Instagram influencer calculators to solve the problem. Nevertheless, with each arriving at different conclusions, it is hard to know which to rely on.
From a marketer’s perspective, audience credibility is a major concern, with less scrupulous Instagrammers manipulating their follower count and engagement statistics by using bots to boost their credentials.
Furthermore, unlike YouTube with its integrated Google Ads, Instagram does not provide publishers with a standard money-making model. Rather, it is up to the individual influencer to find brands willing to pay them directly. The one exception to this is for influencers with a large enough following to sign up to an influencer marketing platform. With vast databases of high-ranking influencers, influencer marketing platforms enable companies to seek out the perfect influencer for their ad campaign.
The Instagram Money Calculator enables Instagrammers to calculate their estimated earnings based on their engagement and number of followers. The utility is not an official Instagram tool, and is not endorsed by the company in any way, but was merely developed to help influencers identify their earning potential.
Over the past 10 years, influencer marketing has skyrocketed in popularity, making it one of the most effective marketing tactics used by businesses. Executed well, it improves reach, increases brand awareness, and boosts sales.
Today, word-of-mouth is all-important with consumers. Influencers build trust with followers. Followers buy into them and their lifestyles, coming to regard influencers as advisers rather than advertisers. When an influencer is seen enjoying a particular product, this induces their followers to buy it.
However, finding the right influencer is critical to the success of any marketing campaign. In selecting an influencer, marketers should consider a variety of different factors, including reach efficiency and ROI. Fortunately, there are a plethora of different tools available to help make marketers’ lives easier, enabling them to weed out successful influencers from the fakes and choose the right one to get their product in front of the right audience.