How Much Should You Spend in Influencer Marketing in 2023
Effective marketing campaigns will match the brand’s budget to the best way to reach potential customers. Working with influencers is increasingly becoming an excellent way of targeting buyers and establishing an emotional connection with the market.
However, it can be difficult to know how much to invest in influencer marketing campaigns. Many different factors determine the cost of an influencer campaign, but this is also an approach that fits all budgets and can be easily adapted according to goals and expectations.
In this article, we will discuss the factors that can influence the cost of a campaign, the average price for each platform, and how you can plan according to your budget.
What can affect the costs of influencer marketing campaigns?
The costs of marketing campaigns depend on a number of factors. When it comes to influencer marketing, these variables are even more significant, as there are different platforms and partnership formats, and influencers themselves can decide how much they’ll charge for an ad.
Let’s look at what can impact the costs of influencer marketing:
Reach and engagement
The size of an influencer’s audience and their engagement rates play a significant role in determining the cost of a campaign.
Reach refers to the total number of people an influencer can potentially expose the brand’s message. This piece of information is typically measured by the number of followers a digital celebrity has. The higher the follower count, the higher the reach.
However, a high reach rate means very little if the influencer has a low engagement rate. Engagement is the level of interaction and involvement that the audience has with the influencer’s content. The metric is calculated by the potential number of people a piece of content reaches and the number of likes, comments, shares, and saves it attracts.
A highly engaged audience indicates that the influencer’s followers are actively interacting and paying attention to their content.
When an influencer has a significant amount of followers and high engagement rates, they often have higher demand from brands and can charge more for partnerships.
Niche and expertise
Influencers who specialise in niche markets or industries may charge higher rates due to their unique knowledge and ability to reach a specific target audience.
When operating in a very specific market, personalities end up developing a loyal and engaged audience that shares a common interest of passion. This can be extremely valuable for brands.
Expertise is also an important thing to consider. Influencers who are experts on a subject are considered thought leaders, seen as authority within a particular industry. This makes their recommendations and endorsements highly influential, which could potentially increase the cost of campaigns with them.
Social media platform
The platform chosen for the campaign can affect its costs. Popular platforms like Instagram, YouTube, and TikTok often have higher demand, which can lead to increased prices.
The complexity of production for each platform will also lead to higher costs. For example, videos for YouTube require more time and dedication to create engaging and interesting content. Instagram and TikTok, on the other hand, are more immediate platforms in which creators can post quickly.
It is worth noting that shorter-content platforms have higher engagement rates, which can also influence the cost of a campaign.
As we mentioned in relation to social media platforms, the complexity of the content can have an impact on the cost of the campaign. If a brand requests intricate video production, high-quality photography, or extensive editing, it may incur higher expenses.
Influencer marketing campaigns often involve the creation of custom content that aligns with the brand’s messaging and campaign objectives. In this article, we will discuss the partnership formats you can include in your influencer marketing campaigns and how they can affect the cost but they will also affect the complexity of content creation. Product mentions, or endorsements are less elaborate than demonstrations, storytelling, or branded skits.
Longer campaigns typically require more resources and time from influencers, leading to higher fees.
Lengthy campaigns also require more content, which means influencers will have to spend more time planning, creating, and managing posts.
Exclusivity and usage rights
If the influencer is expected to provide exclusivity or grant the brand specific usage rights for their content, the cost might be higher.
For example, you might want to ensure that the influencer does not work with your direct competitors for a certain period, which means you’ll have to pay higher fees. You might also want to use the content they produce in future ad campaigns or sponsored posts. This also affects the cost.
Influencers may charge higher fees for exclusivity as it restricts their ability to collaborate with other brands. They’ll be missing out on potential opportunities and income from other brands and, therefore, will require compensation.
Influencer’s reputation and demand
An influencer’s reputation is built upon their credibility, expertise, and the perception of their audience. When personalities have established a strong reputation, they usually demand higher fees.
A positive reputation is the result of high-quality content as well, and it significantly affects how the influencer’s audience will perceive a brand partnership.
Demand is also an important factor. Influencers with large followings, high engagement rates and a track record of delivering successful campaigns are more likely to be in demand, increasing the costs to secure their services.
Influencers who have a strong presence within a specific local area or region may charge lower fees compared to influencers with a global or national reach. Of course, it will all depend on your brand’s goals and campaign objectives.
Brands may want to target a local market and connect with a smaller community, which means working with more niched influencers is the best approach.
As we mentioned above, your campaign objectives will significantly impact the costs of your marketing efforts.
It is your campaign goals that will determine if the best approach is working with influencers with international reach, with a large number of followers or who are specialised in a specific market.
Ensure you match your objectives with the best approach to make your campaign efficient and generate results.
What are the types of ads or partnerships with influencers?
When developing your influencer marketing campaign or considering the best approach for your brand objectives, it is important to know what kinds of ads or partnerships you can do.
Each type will require a different level of dedication from the influencer and provide specific results.
This is the most common form of influencer marketing partnership.
Brands pay influencers to create content that promotes their products and guide personalities towards what they expect to see in the sponsored post. It can be a photo with an engaging caption, videos, blog articles, or dedicated product reviews.
In this case, the influencer will charge a fee to openly talk about your brand and, in compliance with local regulations, they’ll post the piece of content indicating it is sponsored.
Giveaways and contests
Brands can collaborate with influencers to organise giveaways or contests, encouraging their audience to take the chance to win prizes.
This type of partnership helps generate buzz, increase engagement, and expand the brand’s reach.
A brand ambassador partnership involves a longer-term collaboration between the brand and the influencer. Personalities will become the face of a brand, representing it over an extended period.
Brand ambassadors create content, attend events on behalf of the company, and help bridge a connection between their audience and the brand.
In affiliate marketing partnerships, influencers promote the brand’s products or services using unique referral links or discount codes. They earn a commission or a percentage of sales generated through their links.
This approach provides a performance-based incentive for influencers to drive sales.
Sponsored events or experiences
Brands can sponsor events or experiences that are hosted by influencers. This can include product launch parties, workshops, or exclusive gatherings.
By associating their brand with these events, brands can leverage the influencer’s network and create memorable experiences for the audience.
Brands collaborate with influencers to create co-branded content, such as joint videos, blog posts, or social media campaigns.
This type of partnership allows both the brand and the influencer to benefit from each other’s audience and expertise, reaching new audiences and creating engaging content.
Takeovers and guest posts
It is also possible to give influencers temporary control of a brand’s social media accounts or invite them to contribute guest posts on their blogs.
This strategy allows influencers to share their unique perspective and engage with the brand’s existing audience. It can also help them improve their reputation and credibility.
A cost-effective way of working with influencers is providing free products or samples to personalities with a great reach.
Influencers will showcase the product, generate buzz, and encourage customers to try the brand.
At Odore, we have worked with multiple clients by sending samples to influencers and providing them with a link so followers could also claim a free sample.
Influencer events and trips
Brands can invite influencers to exclusive events, trips, or brand-sponsored retreats, enabling them to experience a product and share it with their audience.
What is the best platform to work with influencers?
There are many benefits of working with different video platforms. However, there are many social networks to choose from, and each has its advantages and opportunities.
It is important that you match your business goals with the advantages offered by each platform and create a campaign that meets your needs.
YouTube has an extensive user base, which allows brands to reach a wide range of potential customers. Long videos also have the potential to engage the audience and showcase the details and best features of a product.
According to My Social, influencers’ fees on YouTube vary from US$ 500 to over US$ 20,000 per video, depending on the number of subscribers an influencer has or their main market.
Influencers on Instagram have a large following and can produce different forms of content. It is a platform with a lot of active users and the potential to reach niche audiences.
According to Izea, posts on Instagram can cost from US$ 1,300 to over US$ 500,000, depending on the number of followers and market reach of the influencer.
TikTok is an excellent tool for targeting young people. The majority of TikTok’s audience is under 30, which means it offers an essential marketing channel to talk with younger generations.
According to Kolsquare, prices on TikTok can vary from US$ 800 to over US$ 7,000.
Twitter offers brands an incredible opportunity to receive real-time engagement, encouraging the audience to comment on a launch or event.
Credibility is also a great asset on Twitter, where influencers showcase their expertise.
According to Izea, the average cost of influencer campaigns on Twitter has increased, with celebrities charging, on average, US$ 6,000 per post.
Facebook is another popular social network, giving brands an opportunity to work with diverse content formats and target ads according to people’s interests.
According to Izea, Facebook posts cost from US$ 1,000 to US$ 3,000 and usually combine content posted on Instagram as well.
LinkedIn is a very niched social networking site which allows brands to target a very specific audience.
Influencers on LinkedIn usually talk about businesses and, according to Zopto, charge US$ 10 per thousand users reached with their content.
How to choose influencers?
There are many variables in working with influencers. Everything can impact the cost of your influencer marketing campaign.
The first step in planning your campaign and understanding the cost is choosing the right personality for your brand. To find affordable influencers, consider these strategies:
Micro-influencers typically have smaller followings but can offer highly engaged audiences within specific niches. They often charge lower fees compared to macro-influencers or celebrities. Collaborating with them can be a cost-effective way to reach a targeted audience without breaking the budget.
Keep an eye out for emerging influencers who are growing their following and engagement. These influencers may be more willing to negotiate affordable rates to build their portfolio and establish relationships with brands.
Consider working with influencers who have a localised or regional focus. Local influencers may have smaller followings but can provide targeted exposure to a specific geographical area. They may be more accessible and offer cost-effective options for reaching a local audience.
Look for influencers who specialise in a particular niche relevant to your brand. Niche influencers often have a dedicated and engaged following within their specific interest area. Since they have a smaller reach compared to mainstream influencers, they may charge lower fees while still delivering valuable engagement to a highly relevant audience.
Other social media platforms
While Instagram is a popular platform for influencer marketing, consider exploring other social media platforms such as YouTube, TikTok, or niche-specific blogs. Influencers on these platforms may have different pricing structures or be more open to negotiation, prov iding cost-effective opportunities to reach their audiences.
Collaboration and long-term partnerships
Building long-term partnerships with influencers can lead to more affordable rates. By establishing ongoing relationships, brands can negotiate better package deals, and bulk rates or provide additional benefits such as exclusivity or access to new products. Collaboration over an extended period also allows for a deeper understanding of the brand, potentially resulting in more authentic and effective content.
How to avoid higher costs in influencer marketing campaigns?
With a better understanding of what affects the costs of influencer campaigns and how to choose personalities according to your business goals, you have a better idea of how to plan accordingly.
But how can you create a cost-effective campaign, avoiding higher prices and still taking advantage of all influencers can offer to your brand?
1. Set clear objectives
Clearly define your campaign objectives and identify the specific outcomes you want to achieve. By having a clear vision of your goals, you can focus on finding influencers who align with those objectives, ensuring that you invest in partnerships that will deliver the desired results.
2. Work with smaller influencers
Explore collaborations with micro-influencers who have smaller but highly engaged audiences. Micro-influencers often offer more affordable rates while still providing targeted exposure and meaningful engagement. Additionally, consider niche experts who have in-depth knowledge and influence within a specific industry or topic, as they may offer more cost-effective options.
3. Work for longer periods
Consider building long-term partnerships with influencers. Establishing ongoing relationships can lead to better rates and more favourable terms. Long-term collaborations also allow influencers to develop a deeper understanding of your brand and can result in more authentic and impactful content.
4. Focus on value exchange
Look for influencers who are genuinely interested in your brand and its values. Seek influencers who see the collaboration as a mutually beneficial partnership rather than a purely transactional arrangement. Influencers who align with your brand’s ethos may be more open to negotiation and can offer more value beyond monetary compensation.
5. Explore different platforms
Other platforms can offer you better opportunities and different ways of reaching customers. Explore what your audience reads and invest time to discover the best channel to reach them.
Be prepared to negotiate with influencers. Engage in open conversations about your budget constraints and discuss potential alternatives or compromises. Consider offering non-monetary compensation, such as exclusive experiences, product samples, or affiliate programs, which can reduce upfront costs.
7. Monitor ROI and performance
Regularly monitor and evaluate the return on investment (ROI) and performance of your influencer marketing campaigns. Analyse key metrics such as engagement, reach, conversions, and brand sentiment. By tracking the effectiveness of your campaigns, you can optimise your strategies and ensure that your investments are generating the desired results.
8. Send product samples
A great way of engaging influencers and introducing them to your brand is by distributing samples.
At Odore, we have worked with a number of influencers and created campaigns that leverage their reach and credibility among their audiences to increase brand awareness.
By sending your product to selected influencers, you increase your chances of being mentioned organically and gaining a new and influential customer with a large following.
Influencer marketing can be a powerful strategy for brands to connect with their target audience, increase brand awareness, and drive conversions. Managing costs is a crucial aspect of executing successful campaigns. By implementing the right strategies, brands can navigate the influencer landscape while avoiding high costs.
There are many aspects to consider when planning a campaign and many different factors that can affect the cost of your communication efforts.
Make sure you align your business objectives with influencers’ approach when creating content and their audience. The key to a successful campaign is planning and knowing who you want to reach.
We can help you create a campaign to promote your product and raise awareness for your brand. Book a demo with us to learn more.