Influencer marketing, expensive or not? This question is something that should be considered before promoting the brand. In fact, the actual cost of online celebrity marketing can be greatly considered in terms of influencers, promotion forms, and promotion platforms. This article explains the true cost of influencer marketing, let's take a look.

 

Now, influencer marketing is one of the most successful forms of promotion. According to a 2019 study by The Influencer Marketing Hub, businesses can expect an estimated 600% return on every $1 spent on influencer marketing.

 

But why are people still "rejecting" this high-return marketing method? Because many people have a "gut feeling", internet influencer marketing is too expensive.

 

In fact, there are many factors that affect the cost of online celebrity marketing. Using the word "expensive" to add up to the cost of online celebrity marketing is really inappropriate.

 

As a professional influencer marketing company, FameNet will calculate the cost of influencer marketing for everyone. First, it needs to be clear that there is no one-size-fits-all answer to influencer marketing costs. While we haven't covered all the factors that affect influencer fees, here are the main ones you can mention.

 

Influencer Fandom

The size of followers of different influencers affects the final offer. Influencer types can be divided into:

 

1.    Mega-influencers: 1,000,000+

Advantages: Wider coverage of fans, greater exposure, higher professionalism of the influencer himself, and less contact time;

Cons: High cost, usually between $2,000 and $5,0000, high investment risk.

 

2.    Macro-influencers: 500,000–1,000,000

Advantages: Effectiveness, comprehensive coverage, high degree of professionalism;

Cons: Although macro-influencers are cheaper than mega-influencers, their security costs are still high.

 

3.    Mid-tier influencers: 50,000–500,000;

Pros: loyal and segmented fan base, relatively affordable (about $2,500 per post, according to the FX website);

Cons: Relatively limited coverage.

 

4.    Micro-influencers: 10,000–50,000;

Advantages: Content reliability is high, costs are low, and fan loyalty is believed to be strong;

Cons: Limited coverage, quality cannot be guaranteed, micro-influencers looking for more flexibility rather than strict shooting scripts, long contact times.

 

5.    Nano-influencers: 1,000–10,000;

Advantages: High fan participation, high stickiness, low cost, more tangible, high conversion rate;

Disadvantages: Limited coverage, lack of experience, no quality assurance, long contact time.

 

And the internet celebrities with high quotations that you see on major forums are mainly from the heads of different platforms. In fact, a large number of followers is not the only determinant of influencer marketing success.

 

According to the 2020 Talking Influencers survey of 359 marketing professionals, 76% of respondents have worked with nano-influencers in the past 12 months. One of them is Gett Taxi, Gett Taxi is very active in using nano-influencers and they get huge benefits using minimal money. By partnering with MNFST, they received personalized ads from thousands of people, which greatly increased their visibility.

 

Fan engagement

Some brands will choose to work with influencers with large followings. But some others prefer to research the influencer's likes, comments, and overall engagement to see potential future results.

 

If a content creator has high user stickiness, it means that the content they promote has more influence and the brand can earn more from advertising. This is why there are different situations where influencers charge differently for the same number of followers.

 

Short-term cooperation or long-term cooperation?

When working with influencers, brands use two types of campaigns: long-term partnerships and brand ambassadors or one-time collaborations. Of course, both have their advantages, but which one you choose also depends on cost.

 

Most brands and influencers gravitate toward long-term partnerships or even brand ambassador status. The reason is that due to the long-term nature of partnerships, they are generally well-received by audiences, resulting in authenticity. Long-term partnerships also help build trust among customers. But long-term partnerships and brand ambassadors cost more because of the ROI they get.

 

Costs are generally lower for one-time events. However, this is not to say that they are not effective. Brands can opt for one-off campaigns or collaborations to see immediate results and try to achieve their goals in a faster time frame.

 

One or many?

Brands may choose to work with one macro influencer and drain their entire budget. While other brands may prefer to split their budget and work with multiple, slightly smaller influencers.

 

Promotion form

Although each platform has a "base" price for influencers of varying degrees, the way it is promoted affects the final price.

 

1.    Format

Within each platform, the format of the content affects the cost. For example, on the same Instagram platform, the same nano-level influencer costs $100 for Post, $114 for Video, and $43 for Story.

 

2.    Cross-promotion

Influencers often share posts across multiple social media channels for an additional fee.

 

3.    Title and Description

Mentioning the product name in the title or video description, tagging brands, or adding campaign tags and CTAs are all factors that affect the price.

 

4.    Products or services

The price of an advertised product can also change an influencer's marketing spend. If it's something expensive, like a car or luxury accessory, it will cost more to advertise than advertising cosmetics or casual wear.

 

Also, if your product is in a specific vertical and segmented category, you will have fewer content creators in your industry. This means you will pay more.

 

What is the pricing model of influencer marketing?

The value of collaboration between companies and influencers is influenced by various factors mentioned above. Thus, the value of working with influencers is also highly personalized.

 

●     CPM (Cost Per Thousand)

CPM is a "pay-per-impression" model. It refers to the total ad spend per thousand people who hear or see an ad in the advertising process.

 

Calculation formula: price per thousand = (advertising cost/number of arrivals) × 1000

 

●     CPE (Cost Per Participation)

Apart from CPM, an influencer's user engagement is also an important factor in influencer marketing. After all, a large community is pointless if those users don't interact with the content.

 

Commission

Affiliate marketing is especially effective for micro-influencers. Because their target group is small but very specific and the connection to the community is very high.

 

In affiliate marketing, influencers earn commissions based on the sales of products sold through their social media accounts. Track the number of products sold and campaign success based on personalized links in YouTube direct posts, profiles, or video descriptions. Most of the time, the commission is between 10-15%.

 

Buyout

In a purchase agreement, all rights to a product, meaning the influencer creates content in influencer marketing (such as a post), will be assigned to a third party for a flat fee.

 

Acquisition prices vary widely due to time periods and geography. Usually 100-200% of the price of the original material.

 

Non-monetary forms

Some influencers also prefer to make non-monetary payments in the form of barter transactions. For example, companies send free samples to influencers, who then refer or introduce those samples to their platform. By exchanging products and advertising channels, in the best case, both parties benefit equally from the transaction.

 

Note: Influencers are only obligated to display products on their social media channels if they are contracted in advance.

 

How to effectively reduce your influencer marketing costs?

Finding the right influencers for your brand or business is the way to balance your reach with their influence rate. So it helps to think about your budget before you start looking for influencers. If you don't know how much you can spend, it's hard to tell if your favorite influencer fits your budget.

 

There are a few things you need to consider when creating your budget, such as your influencer marketing goals and whether you will use an influencer marketing tool or an influencer marketing agency.

 

1.    Set goals

The amount of your influencer marketing budget will largely depend on what you want to achieve with your influencer marketing campaign and the tactics you will use to achieve your goals. The main goals of using influencer marketing are to increase brand awareness, increase social engagement and increase sales. Once you've set your goals and created a plan, you'll be better able to find influencers that can meet your needs within your budget.

 

2.    Use an influencer marketing platform

There are tons of influencer marketing platforms you can use to find influencers for your brand. There are even plenty of free influencer marketing tools that can help you find influencers with simple filters and parameters.

 

3.    Find an agency

There are professional influencer marketing agencies that will help you find the right influencers. They can help brands create an influencer marketing strategy, execute that strategy and manage their influencer marketing campaigns. They work closely with influencers and have a deep understanding of influencer value. So they help brands find a good influencer within the brand budget and achieve the brand's marketing goals.