Influencer marketing is growing faster than ever. More and more brands are realizing the value and power behind influencers and content creators, especially those that have super targeted and highly-engaged communities.
On the other side, the information and resources available for influencers to know their worth is still very limited and the majority of the time, they just end up undercharging what they’re really worth.
So make sure to read until the end to find out what can you charge for and how can you negotiate with brands that are asking for a lower fee than what you really deserve.
Why content creators and influencers are more important than ever?
Since 2020, brands realized the importance of having a strong social presence. And this doesn’t mean just activating their social channels.
As traditional marketing methods were not compatible with their audiences being locked up at home, brands started to turn out to content creators and influencers who are experts at creating creative content for their audiences.
Influencer marketing increased by 46% in 2020 and it is on track to become a $15 billion dollar industry by 2022.
Furthermore, 63% of marketers have stated that they intend to increase their influencer marketing budget in 2022.
So yes, the influencer and creator’s industry seems to have a bright future and as a creator, knowing where this industry is heading is essential if you want to succeed in a very competitive landscape.
The Industry Standard
Let’s begin with the industry standards, which you can find pretty much anywhere online.
You should charge 1% of your followers or $100 for every 10,000 followers.
Now, that might not seem like a lot and you might think.... well, to make good money as an influencer I need to have at least 100,000 followers...
The 1% rule is your BASE FEE. But there are so many more factors that affect this including your engagement rate, exclusivity, content usage, white-listing, and other deliverables the brand could ask for.
So let’s dig more into these.
Based on your engagement rate
You need to be very clear of what are your industry ER standards. This can vary depending on the industry you belong to.
Remember your ER is not only just the likes you get. It includes all content interactions, including saves and shares.
Here are some general ones:
<1k followers: 8%
1k - 5k: 5,7%
5k - 10k: 4%
10k - 100k: 2,4%
If your engagement rate is higher than these values, you can negotiate a higher base fee.
For example, let’s say you have 20k followers and you have an engagement rate of 8%. This is almost 5 times higher than the average, so you can charge up to 5%.
20,000*0,05= $1000 for one post.
Based on exclusivity
When negotiating a brand deal, you need to make sure to ask the brand from the start to be clear about the conditions and READ YOUR CONTRACT very carefully.
In many cases, brands ask for an exclusivity period, where you cannot work with similar brands that could be considered their competition, which is totally fine.... but they need to compensate you for that!
Did you know that for every month of exclusivity, they should pay you your sponsored post fee?
So, let’s say you’re working with a big brand that is asking you for a 6-month exclusivity. This means that they have to pay you your base fee times 6.
$1000*6 = $6000
Based on content usage and image rights
This one is a BIG one too and not many influencers are aware of it.
The majority of the time a brand works with an influencer, they want to use their content for their own marketing purposes.
This includes, but doesn’t limit only to, social media posts, social media ads, website, google ads, and offline marketing.
And as an influencer, you should be compensated for that too. If it wasn’t for our existence, brands would have to hire photographers or media creation companies for their campaigns and that would cost them a lot of $$$$.
So, make sure to ask the brand you’re negotiating with, how are they planning to use your content. The fee should be 30% of the sponsored post rate for every month your content will be used.
Back to our previous example, if a brand says they will be using your content for their marketing channels for 6 months then they should compensate you with:
$1000*0,5 X 6 = $1800
PS. If you’re a photographer the fee for image licensing can vary according to your gear, experience, and extra expenses like hiring a model, transportation to a location, etc
Based on whitelisting
Whitelisting is when you give permission to the brand to promote your post on your behalf.
This means that the post will appear as it has been “boosted” or “promoted” by you. This benefits the brands a lot as they tend to have more control over the audiences they target, the copy, destination page, and call-to-actions.
How much should you charge for whitelisting?
The industry standard is similar to that one for content usage (30% of the base fee). However, there are influencers that charge a percentage of the ad spend (between 4 - 5%) which is why you should make sure it states in your contract how much will they be investing into promoting your posts.
For example, if the company wants to use your content for ads over the next 6 months and their budget for ad spend is $2000, you can calculate your fee the following way:
$1000*0,5 X 6 = $1800 + 0,05*2000 = $1900
If you’re promoting a brand’s product, you could also negotiate a percentage of the sales
Bear in mind that the previous examples are all based on a standard in-feed post, but nowadays and with all the possibilities that Instagram gives you, every format and channel could have a different fee.
Reels tend to have more value and more reach than in-feed posts. When you do a sponsored reel for a brand you’re potentially reaching thousands of new people, so you must take that into consideration.
So, if with 20,000 followers most of your posts reach 10,000 people and you’re charging $1000 for a post, but your reels are getting a reach of 60,000 people then you must factor that in.