Influencer marketing now is an amazingly powerful marketing strategy. In the last three years alone, searches for influencer marketing have gone up by 1500 percent. But what has brought on this dramatic increase?Influencers and influencer marketing have risen in popularity due to the unprecedented increase in the usage of social media people, brands and more across the world. As much as 77 percent of all small to medium sized businesses have incorporated influencers into their marketing strategies, and more than 63 percent of businesses plan to increase their budgets for it in future. Before we go further, let’s look at what influencer marketing is and what it means to your business.
While influencer marketing has become an essential part of marketing today, its roots are extremely important to understand. Check out this blog to learn more: A Short Guide to the History of Influencer Marketing.
What Is Influencer Marketing?
Influencer marketing is one of the most powerful digital marketing approaches available on the market. This strategy involves connecting and working with public figures to closely reach specific audiences through product recommendations, reviews, promotions and more.
Influencers are people with specialized insights in a specific field and a dedicated audience, who have the power to impact the purchase decisions of their followers. Influencers can be segmented into different categories depending on the number of followers they have. These are as follows:
- Nano-influencers: at least 1000 followers
- Micro-influencers: 10,000 to 50,000
- Macro-influencers: 50,000 to 500,000
- Mega-influencers: 500,000 to 1,000,000 followers
- Celebrity-influencers: 1 million +
The best part of this marketing approach is that everyone involved benefits from it. Companies reach and engage their target audiences at a higher rate than any other marketing strategy, gain audiences trust and brand loyalty, and improve brand awareness. Influencers are able to provide relevant, rich and authentic content that their followers look forward to, reach interested audiences, build valuable partnerships with brands, and be their own bosses. Your audience gains information about niches they’re interested in, finds relevant products from trusted sources, and gets new product recommendations that they wouldn’t anywhere else.
This is why the conversion rate is on the higher end when this marketing approach is incorporated. Did you know that businesses earn a revenue of $6.85 through influencer marketing for every dollar they spend? You’ve not only got a myriad of benefits, but you get them all a good price!
Before we dive into the economics of an influencer marketing campaign, let’s take a look at how brands can effectively design and execute one: How To Create An Influencer Marketing Strategy.
The Four Rules Of Paying An Influencer
Know the industry standards and where you sit
How much do you know about influencer marketing in your industry? Do you know how much you should be paying for their services? More than 86 percent of businesses don’t actually know how much they need to pay their influencers. Your first step is to know what your competitors and other businesses in your industry are offering their influencers. Understand the payment benchmarks or get a rough estimate to help you decide the amount you’re willing to invest versus the amount your influencers expect to be paid.
This step can be challenging for many businesses. It is easy to become familiar with the industry payment standards, but only you know your brand’s value to your audience. The industry cannot tell you about your brand’s value standards, goals, or status – you are the one who determines your brand’s worth in the marketplace. Knowing where you sit is knowing both the industry standards and your brand’s worth.
Pay for what you need
As we’ve just learned, you are the one who has the power to determine your brand’s value and worth. To do this, you’ll need to understand three essential elements: your business goals, your budget, and your audience.
Nobody understands your business goals better than you do, and knowing these inside and out are what helps you measure your success. Your goals give you a picture of your company from multiple viewpoints, allowing you to look at your position through the eyes of your competitors, industry, and more. This helps you make accurate financial and growth decisions, as well as the ability to reassess your plans from time to time.
It is impossible to take a single step in business without understanding where your budget is allocated to. Knowing your budget limit helps you design and execute effective marketing strategies, and reach out to your audiences better than your competitors at a cheaper rate.
To understand your audience, you will need to know their preferences, problem areas, what they’re looking for, and how you can help so you can provide better products and ensure that they are sellable. This will allow you to boost your lead conversions and sales. After all, a business exists only for its customers!
To make all this understanding matter, you’ll have to find the right influencers who align with your brand values, operate in your niche, connect well with your target audience, and are present on the platforms that you want to run your campaigns on. Why? Because there are thousands of influencers out there and your goal is to find the best influencers that will make results happen. Learn what you need from an influencer marketing campaign, find the right fit influencers, and pay them for their time!
What you pay for is what you’ll get
You may think that you’re paying for the influencer’s services, but that’s not the case. You aren’t paying for their work, but rather the results that they bring to you. This is why it is essential to vet your influencers and ensure that they can deliver.
For instance, if your influencer marketing goal is to improve brand awareness, how will you measure the effectiveness of your campaign? You can do this using a range of strategies including hosting brand awareness surveys, incorporating social listening, and setting up Google Alerts to check how much your brand is being discussed. If your campaign is to increase engagement, check the number of likes, shares, and comments your posts gain. After all, a good chunk of influencer marketing is analytics based; everything needs to be quantified to measure your growth.
This is why we recommend that you pay your influencers based on the reach, buzz, and the results they can (and do) bring you. Again, this is why it is essential to work with the right influencers that will support your brand at every step of your campaign. View influencer collaborations as a long term association that gets stronger over time, because if you work with the right people, you may gain yourself a powerful asset that will be invaluable in the future.
Influencers are people too
A good marketer is aware that influencer marketing is an intimate strategy that requires good relationship management and human connection. Why? Because influencers are people too, and they are providing you a service. As we’ve already emphasized, working with influencers is not a one time pursuit but a long term relationship building process that requires human connection and support.
In order to foster and establish good relationships with influencers, you need to treat them with respect. This means giving them a fair payment for the results they bring, managing them with care, providing clear instructions, and treating them as a valuable employee – as they are essentially an extension of your team. You should design campaigns through which both the business and influencers experience mutual benefits. Fostering good relationships will bring you even more value in the long run, and with the right support, your influencer could become a valuable brand ambassador and grow alongside you.
Things To Consider When Looking For An Influencer In Your Budget Range
Brands don’t have to break their bank if they work with the right people
You don’t need to empty your bank account to run an influencer marketing campaign. Not every Instagram influencer will charge you $50,000 for your product promotions or recommendations. There are different elements that you need to consider, measure, and choose to ensure your campaign fits your budget.
Audience size and engagement levels
As mentioned earlier, influencers are often segmented based on their follower count. We have nano-influencers (min 1000 followers), micro-influencers (10,000 – 50,000 followers), macro-influencers (50,000 – 500,000 followers), mega-influencers (500,000 – 1 million followers), and celebrity influencers (1 million+ followers). While these numbers are all well and good, basing your influencer selection off these alone will not do you any favors – and may end up costing you in the long run.
Why? Because influencer marketing isn’t necessarily about reach, but rather engagement. Check if the influencer caters to your target market and know if their followers are the right audience for your brand and don’t get carried away by a large number of followers. Massive audiences don’t necessarily mean that they are your target market. What good does working with an influencer in the beauty industry do to your brand when you want to sell an educational course? These industries are (usually) completely separate, and the influencer may also not be able to communicate your message to their followers properly as their expertise is different.
Next, measure the engagement they receive on their posts. After all, you should only choose the influencers that are able to reach out to your audience. But that is not enough. You need to be sure that they can engage them. So, what engagement rate is good? This differs from platform to platform. For instance, an engagement rate of 3 percent to 6 percent is quite good for Instagram, and 0.5 percent to 0.99 percent is a decent engagement rate for Twitter and Facebook. If the post engagement rates are below the recommended percentage, it implies that you need to optimize your strategy. However, these percentages vary based on the industry that you’re in, which is why you must be familiar with its standards.
Here is a simple method to help you calculate your influencer’s engagement rate:
Engagement rate x = (total engagement/followers) * 100
Total engagement = likes + comments + shares (re-posts)
Engagement is the most important metric while designing a social media campaign and here are a few tips that brands can adhere to improve their chances of success: 10 Ways to Increase Social Media Engagement.
Usage rights
Assume that you’ve already collaborated with an influencer and the campaign has come to an end, driving the results that you wanted. What happens to all the content posted during the campaign? Why not take advantage of this content and use it for other promotional activities? This is the reason why brands have become more savvy and include usage rights clauses in their influencer marketing contracts. You will have to check directly with your influencers to see if they will permit you to use their content externally following the conclusion of the campaign.
So, will your influencers allow you to use their content elsewhere? If yes, how much extra will you have to pay for these rights? 57% of marketers claim that influencers content outplayed their own brand-created content. This is why many businesses are gravitating towards “content only” campaigns. These are like branded stock image portfolios submitted to you for use across your paid ad campaigns, completely licensed to use! Let’s take a look at what usage rights are all about and how you can leverage this opportunity.
Usage rights here refers to content developed by influencers that can be either used by the companies for which it was created. To access these rights, brands need to create and approve a content usage rights agreement that is signed by both parties that contains all terms and conditions. The usage rights will depend on where the content is used, the duration of the campaign and anything else proposed and agreed upon by your influencer. This content is generally used as sponsored content and also coupled with organic digital marketing strategies.
Exclusive partnerships
While vetting influencers, one of the things that you need to check is if they are working with other brands – particularly those in your industry. If you want your influencers to only showcase and talk about your brand (in your niche or even entirely), you can opt for exclusive partnerships with them.
Exclusive partnerships are agreements that specify that influencers are only to work with a specified brand (your brand, for example) and not their competitors for the duration of the contract. Remember that exclusivity will cost you more and the price will vary from influencer to influencer based on the results they drive, followers they have and power within their niche.
However, more than 63 percent of marketers work with at least ten influencers for a single influencer campaign, and over 24 percent of them work with over 25 to 50 influencers for a single influencer program. This means that you likely won’t be able to strike exclusivity contracts with every influencer you work with. We recommend considering exclusive partnerships, but if you can garner the results you want without one, then go for it!
Partnership contract
As with most external contractor collaborations, you will need to ensure that you prepare a contract that specifies everything from the length of your partnership to actions required and more. A good agreement will establish the ground rules for a long term relationship between an influencer and a brand. Whether it is a long or short term contract that you’re looking at, any influencer contract should include a non-disclosure agreement, discussion of compensation terms, campaign timelines, campaign and influencer guidelines, agreed upon deliverables, consumer privacy law, content rights, and brand exclusivity clauses. Yours may include other assets, but these are the standard.
You also need to be clear about what type of content the campaign will involve. Campaign content can include anything from videos, blog posts, product reviews, product mentions, a combination of any one of the content types or any new content idea you may have – the options are all dependent on your needs. You also need to specify how many posts you want throughout the campaign duration. Be aware that content creation prices will vary based on what you want for your campaign. For instance, a video will cost more than an image.
Like all contractors, influencers are always on the hunt for long term partnerships rather than short term associations with brands. Let’s look at what long term partnerships can offer your brand.
Long term associations with influencers will:
- Build brand loyalty both with influencers and the eyes of the audience
- Fosters long term relationships
- Maintain consistency in the message that goes out to the world
- Decrease your influencer payment costs
For influencers, long term partnerships means being loyal to your brand and their followers, and a steady stream of income. Therefore, it would be great to leverage the opportunity that long term partnerships bring.
Content type
What type of content will grab your audience’s attention and generate the action that you want from your campaign? It is up to you to decide what type of content you want them to create for your brand. Content can be for you in the form of images, videos, reviews, background features, brand mentions, live streams, modelling, blog posts, and more. When you think of the opportunities influencers can bring you, the possibilities are endless. That’s why working with the right ones can bring a world of creativity to your content production.
Each of those content types will have different rates, and the cost will also vary based on its workload. This is also applicable to live streams and things like image carousels. All these assets will come under campaign deliverables in your contract.
You’ll also need to mention the timelines for your content review and approval process. You should be closely involved in the entire process including reviewing their work to check if their work is high quality, if your brand standards are met, if engagement is as expected and more. Alternatively, if you’re confident about their work, you can ask them to post it directly without your review. This confidence will slowly be built over a period of time and it displays the longevity of your relationship with them. Whatever the case is, ensure to mention it in your influencer contract.
All the above mentioned points can be easily handled by partnering with the right influencer marketing agency to capitalize on their expertise. Read more here: How Do Influencer Marketing Agencies Work?
Ways To Pay An Influencer
Does payment always involve a money transfer? Not necessarily! Let’s take a look at different ways to pay influencers.
Money
This is the number one payment approach that you’ll use in your influencer marketing campaigns, and are more often accepted with an immediate response. Let’s take a look at a few of the average influencer post rates on some of the most popular platforms:
- Instagram: between $93 to $1400 per post based on their following
- Snapchat: between $500 to $30,000 or more per campaign
- YouTube: between $500 to $5,000 per video
- Blogs: between $175 to $5,000 per blog post
All these payments are based not only on their follower base but also post engagements, conversions, and reach irrespective of the platforms they exist on. But are monetary payments enough to create the impact that you’re looking for? You may need a little bit more to convince influencers to come to your side. Take a look at the following methods to supplement your campaign and brand equity alongside your monetary compensation. Remember that it will be rare for you to be able to pay an influencer with one of the following methods alone.
Gifts
Also known as product seeding, influencer gifting is a popular practice adopted by businesses all around the world. Brands send out their curated products for free to selected influencers in return for a review or production promotion. This allows influencers to experience, share and give genuine feedback on new products to their followers. Popular brands like GoPro, LUSH, and MVMT Watches have been using this method in exchange for quality content.
When you decide to use this approach, you need to initiate the conversation by asking if the influencer would like to accept your collaboration. Once you send the gift and it is received, don’t be pushy by asking for immediate feedback. Give them some time to experiment with and experience your product in their own way – this is how you can foster strong relationships with them. By employing this payment method, you can maximize your return on ad spend (ROAS) and return on investment (ROI), gain more brand exposure, establish brand identity, and thereby, scale up your brand rapidly.
Services
If your business doesn’t offer products but services, you can offer influencers a trial of your service alongside monetary compensation. This compensation method works in industries including hospitality, travel, hair salons, restaurants, and attractions. This opportunity is best used by encouraging influencers to review your service on location to help people to understand the perks of purchasing your offerings.
Ambassador
Brand ambassadors are specially selected business representatives to endorse a brand in a positive nature and therefore increase brand awareness and conversions. They are often appointed as the public face of the brand, and as such celebrities are usually selected as brand ambassadors for those that can afford it. But with influencer marketing pacing up, these personalities are now more commonly chosen to be brand ambassadors.
A brand ambassador’s core responsibility is to create a memorable experience for consumers using their position as a public figure within that industry (or society as a whole). They do so by initiating word of mouth propagation for your brand, sharing content related to your product or service, and acting as a representative for your brand. A massive 76 percent of people claim that they trust content posted by brand ambassadors more than content from brands themselves. All these efforts lead to increased brand awareness, building credibility and gaining your audience’s trust.
Nike signed a deal with 21 year old Michael Jordan in 1984, back when he was still a rookie. They signed a contract with him naming him their brand ambassador for their then newly launched Air Jordans collection – a collaboration which was to last for five years. This deal amounted to $500,000 every year for the set contract period. Nike also froze on naming their product line after the brand ambassador himself. Once the campaign kicked off, $126 million worth of Air Jordans in the first year alone. This partnership has also earned Michael Jordan a sum of around $1.3 billion to date. This is the impact of working with a brand ambassador – long term benefits for you and them.
Referral codes
Referral codes are another brilliant way to collaborate with influencers if driving sales is your marketing goal. This method helps you boost your website traffic and make influencers a major part of your marketing campaign. 49 percent of people rely on influencers to make certain purchase decisions, and over 40 percent of them purchase a product or service after being recommended by their favorite influencers.
Offering your product at a discounted price for your influencer’s followers will help set you apart from the competition. Using this approach not only helps you draw attention from your target market but also helps influencers garner attention as well.
One of the major benefits of this approach is your ability to analyze its effectiveness. Once the audience uses a referral code from your influencer and makes a purchase, you will know the source of conversion. Using urchin tracking modules can help you track your source of conversions, see your bounce rates, and monitor both new and recurring website visitors. This method boosts conversions, and the influencer also gets paid for every purchase which will be drafted in the contract agreement. This works as an additional incentive for influencers apart from your cash payout.
Take a look at the other side of influencer marketing economics and learn how influencers look at the process with our blog: How To Monetize Your Influence.
Influencer Marketing Made Easy With AtisfyReach
Finding this a lot to take in? Make the whole process simple with AtisfyReach, a comprehensive influencer marketing platform that enables businesses to find and connect with influencers that suit their needs from one centralized location. The platform gives brands the ability to create contracts, reach like minded personalities, distribute campaigns, pay influencers and more with our new-to-the-world AI-based platform. Influencer marketing has never been easier with AtisfyReach!
If negotiation is not your thing, you can escape that with AtisfyReach. Find influencers based on the niche they belong to, their campaign impact, and the promotion type you’re looking at. Let’s say that you want to work on a campaign for which you want to hire 100 nano-influencers. We guarantee that you can set up your entire campaign from end-to-end within an hour. The possibilities are endless with AtisfyReach!
That’s the benefit of our platform – you don’t have to put in much effort at all. Our specialized AI will do all the work behind the scenes for you in a fraction of the time it would take to create a traditional influencer marketing campaign. Additionally, AtisfyReach is equipped with a money ‘Vault’ with which you can make payments as the campaign progresses. The ‘Vault’ acts as a shield to your brand, allowing you to maintain your funding if the campaign does not meet your quality standards.
Additionally, whether you’re an individual business owner, talent management consultancy or a marketing company, you will gain access to detailed reports of your campaign performance. Speak to our experts to understand how AtisfyReach can make your life easier with influencer marketing.
Influencer marketing can be a tedious process, so you need to make sure that you get everything right before you invest. You need to find the right influencers, understand them, connect to them authentically, discuss your terms and conditions for the collaboration, distribute material, and more. Each part of the process requires a lot of research to ensure that the execution is done right.
Influencer marketing is a vast subject that needs to be understood in-depth. Brands can benefit exponentially from it and establish themselves among target audiences. Learn more here: Ultimate Guide To Influencer Marketing: Everything You Need To Know.
Faltering on any one of the steps will tarnish your relationship with your influencers and may bounce back negatively on your business – especially if it is payment related. If you want to adopt this method but are not confident and overwhelmed by the process, we’re here to tell you that you don’t have to be intimated. The award-winning team at AtisfyReach can help you through the entire process. The team at AtisfyReach can help you design a winning influencer marketing campaign that elevates your brand, expands your reach, and increases your sales.
Reach out to us today!
