Influencer Marketing has grown from a $1 billion industry in 2016 to a $5 billion dollar industry in 2019. The industry is also looking at a jump in these figures over the next couple of years. Instagram has been designing and making updates on the app that is friendlier towards influencer marketing. Brands see more success in Instagram as a platform than others. With both brands and social media platforms moving towards influencer marketing’s growth.
According to the Influencer Marketing report by Greenroom, the budgets are going to increase exponentially in 2019. Some brands have been at least running two campaigns per year. Some of them are planning to release 2 – 5 influencer marketing campaigns this year.42% of the marketers have plans of increasing their budget for influencer marketing in 2019. 32% of the brands are looking at no change in their plans and going with their existing marketing plan. Only 20% of the marketers are planning to decrease the number of campaigns compared to the previous year of 2018.
Since 2017, the challenges faced by brands have taken a different tone. The initial challenges faced were more towards brands not knowing how to implement a campaign. The recent surveys show that the budget is one of their primary concerns. While influencer marketing still remains to be one of the most cost-effective methods, how much do influencers get paid? Is the cost increasing? Sponsored content by influencers has become expensive ranging from mentions, posts to videos.
Fair price for an influencer
This dilemma has no straight answer. According to Shane Barker “There is absolutely no standardization in how influencers charge for partnership collaborations.” Influencers’ payment varied from just accepting free products for endorsements to thousands of dollars.
According to eMarketer, brands are willing to pay a premium for video posts on Instagram. Celebrities and mega influencers earn somewhere around $700 and upwards per post, micro-influencers make an average of $110 – $500 whereas nano influencers make anywhere starting $20.
While this might be the case, not all brands are okay with paying these ‘power’ influencers so much money. Brands have now collectively flocked to working with micro influencers who have a relatively good engagement rate. Instead of video as a medium, many brands have shown interest in Instagram Stories and are focusing on working with micro influencers, who have smaller but dedicated followings.
In influencer marketing, brands certainly get what they pay for – and influencers cannot hope to make a good living out of their posts until they move into the big time in terms of followers.
Factors which affect the cost of working with influencers
In order to collaborate with your preferred influencer, these factors will also have to be considered
Which social media is the campaign on?
How long is the campaign going to be?
Which category of influencer does the account fall under? (Mega/Micro/Macro/Nano Influencer)
What kind of content are you expecting?
Are you going through an agency?
Brands now work with micro-influencers because they are more cost-effective than working with top-tier talent. Like any other marketing channel, influencer marketing requires strategic planning and ongoing management. It should form part of the marketing mix and contribute to a broader strategy, and not be done simply for the sake of it.
The better the metrics, the better we will be able to evaluate the success of influencer marketing on a case-by-case basis, and not through sweeping generalizations about the industry as a whole.