Fair compensation for influencers

Fair compensation for influencers

What is fair compensation for influencers and creators
Written by
minute read
Sep 1, 2023

Understanding how much to compensate an influencer, and equally, what amount not to, is fundamental to business success. Fairly compensating influencers is also one of the biggest pain points as there are no standard benchmarks in the market that define standardized rates for influencer payments. In the 8 years of building The Cirqle, we’ve collected millions of data points across our influencers, including their rate cards. To help our clients understand how they should compensate influencers for their creative work, our software now provides a tool to help navigate the complexity of influencer payments by providing accurate and real-time numbers generated by the inputs of our network.

In this post, we will share some key findings that our head of data, Premesh Premji has discovered while analyzing the rates of 16.000 influencers across the Instagram channel. There are two topics we’ll be discussing:

  1. The avg. rates of an Instagram influencer across different geographies
  2. Cost-effectiveness through long-term partnerships
  3. Fair compensation for creators

We’re super excited to release this feature and can’t wait to hear the feedback of our clients when using the tool. Our goal with this product is to provide transparency to the market and enable brands and influencers to partner in ways rooted in fairness. Here's a snapshot of how it works:

1. What’s the average rate of an Instagram influencer?

Over the past years, we’ve worked with tens of thousands of influencers and collected a ton of highly valuable data. Amongst information around clothing preferences and shoe sizes, we’ve actively been collecting information around the rates influencers charge for either 1 single Instagram Story, In-feed Post, IG Reels post and for 24 posts. We’re now sharing this data with our clients while introducing our Creator Payments tool, effectively equipping them with first-hand insights into this data.

There’s a couple really powerful conclusions to draw from the information we’ve collected in a Datastudio, of which one is definitely to look at averages. In the below table, we’ve looked at average rates across 16.000 influencers for an IG Story, IG Reels and IG In-feed post.

The global average rate is globally influenced by multiple factors including the country of origin where the influencer operates, their follower size, and the number of posts that are requested in a brand-partnership.

2. Cost-effectiveness through long-term partnerships

Before you embark on any influencer campaign, we recommend that marketers take a holistic view of their marketing activities. If you have more than one opportunity on the horizon, negotiating a bundle deal can carry massive cost savings and may mean the difference in your program performance. On the flipside, and although we strongly advocate for long-term, this may not always be preferred to some partners.

As previously mentioned, the tens of thousands of influencers used for this analysis have entered their rate card for a 1x post (one-off) and 24x posts content bundle on their Instagram feed, across Stories, Reels and In-Feeds. In the below table, you’ll discover how big of a discount you can unlock when you sign on influencers for the long-term, in the US market:

The Creator Payments tool further enables clients to input their desired influencers’ follower range and determine what compensation to pay, for which post format (IG stories, IG reels, In-feed post, Carousel), and for what market. In the example above, we’ve taken a follower range of 10.000 - 50.000 and kept the market(s) open resulting in rates across nearly 10.000 influencers.

3. What is fair influencer compensation

If you are currently partnering with influencers, either directly or through an agency, leverage our data points in your negotiations so your partnership is rooted in fair compensation. Without a data layer, all you’re doing is guesstimating and that simply doesn’t work when you want to turn “influencer” into a performance channel. There are a number of factors that can impact how much an influencer charges for their services and it’s rare to find an influencer who charges a flat rate. Influencer marketing is a legitimate business and influencers set their rates based on what brands will pay. While our list doesn’t cover everything that goes into determining how much an influencer might charge, these are some of the things you can count on to have an impact:

1. The influencers follower base, reach and avg. engagement rate;
2. The social channel they post on;
3. How many posts you want and if they include things like images, videos, and audio;
4. How much creative effort it will require the influencer to produce the content;
5. Where the ad will be promoted/cross-posted;
6. Agency fees (if the influencer is exclusive to an influencer marketing agency);
7. Exclusivity and competition clause;
8. Licensing rights;

From a client perspective, fair compensation for influencers is rooted in a fairly simple cost vs. benefit analysis. Metrics such as CPM come into play if and whenperformance is judged by the size of the audience the influencer has been able to reach. If the assessment of influencer performance is rooted in something like "sales" or "conversions", compensation will be looked at from the lense of cost per conversion or cost per sale. These calculations are beyond the scope of this blogpost, but will be addressed in the future in much greater detail.

It’s good to recognize the different metrics and formula's as there’s no one size fits all solution to equal compensation and multiple variables are at play. Fairly compensating influencers is a job in itself and data analysis helps streamline that process by providing a starting point for rate offers and negotiation benchmarks.

We pride ourselves in fairly compensating influencers and truly hope this tool will be used across research papers and client work so we can make sure the market compensates influencers for their creative work.

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