Determining the appropriate costs for influencers can be a tricky business, as there are no fixed rates that companies can adhere to. Negotiations with creators are highly individual and depend on a number of variables, e.g. their reach, the quality of their content, their community loyalty, but also their personal connection to the brand and its products. It is often the influencers themselves who take the first step and set their desired price. Regardless of whether this is the case or whether the creator asks you to make an offer first: You’re probably wondering how to use your campaign budget most effectively to get the best results while offering influencers fair fees. In this article, we want to help you determine appropriate remuneration for content creators for your influencer marketing.
In negotiations, the thousand-contact price, also called cost-per-mille (CPMs) can be a useful benchmark. The CPM indicates how much money a company is willing to pay for a thousand contacts – e.g. a thousand views on a TikTok video. By using this as a guide and reference, you can better assess the value of working with a particular influencer for your campaign. Set the CPM range consistently within your company so that you can plan your budget better in the long term. However, remain flexible in order to cater to different creators and creator types. Keep in mind that CPMs can change over time as they depend on the respective market situation. It is therefore advisable to regularly review and potentially adjust the values to ensure you remain competitive.
The following CPM ranges can serve as a guide:
The remuneration is calculated as follows:
Average reach of the influencer / 1,000 x CPM = price of the cooperation
To gain a comprehensive insight into the average reach per content piece of an influencer account and to be able to calculate a fair price with the CPM, it is helpful to request the creator’s current insights before the negotiation. This will also provide you with important data that would otherwise remain hidden, such as the number of views of the last Instagram stories or the reach of the last Instagram posts.
Our tip: Influencer search platforms such as influData give you detailed insights into the influencers’ data and their content pieces even before you make contact with them for the first time. In addition, influData provides an estimate of the appropriate CPM for that creator as well as how much you would likely have to pay for a content piece without having to do the math yourself. These estimates are based on various factors such as the reach of the influencer, the target group, creator ratings and the expertise of experienced marketers.
By analyzing past collaborations with other creators, companies can gain important insights into how much they have previously paid for similar reach but also for similar types of content. This information serves as a reference point and makes it possible to offer realistic and fair fees for upcoming campaigns with comparable influencers.
To make the most of your campaign budget, it’s wise to distribute the influencer content across multiple platforms. This could involve a video originally intended for TikTok being shared on the creator’s Instagram and/or YouTube channel as well. As no additional content needs to be designed and produced, the influencer fee usually only increases slightly – but the effect can be enormous as it maximizes reach. Therefore, if the creator insists on a specific price, finding a common ground in this manner is achievable. By broadening the content’s distribution across various platforms, both parties can enjoy the benefits of a larger audience and enhanced visibility, leading to a win-win scenario. However, before expanding the distribution of content pieces to platforms not previously agreed upon, always verify if they provide sufficient added value for you and your brand. In other words: Will at least a portion of your target group be reached there? This ensures that the broader use of the content piece does not end up being fruitless.
In addition to CPMs, benchmarks from previous campaigns, and leveraging various platforms, there are other creative methods to establish influencer compensation. Offering additional incentives like exclusive products, discount codes for the influencer’s community, or invites to exclusive events can add value for both parties. Barter deals may also be viable, particularly for influencers who are just starting or those with smaller followings. By pursuing such avenues, you can ensure fair compensation for the influencer while fostering a long-term and authentic partnership.
Overall, determining an appropriate fee for influencers is a complex matter. However, by using CPMs as a guide, reference points from previous collaborations, considering different social media platforms and considering creative collaboration opportunities, companies can better assess how they can most effectively use their campaign budget to offer influencers fair compensation. However, it is important to emphasize that there is no one-size-fits-all solution that applies to every situation. Every influencer campaign is unique and requires individual approaches. It is therefore advisable to remain flexible and respond to your specific needs and goals as well as those of the creator.