PRICING AN INSTAGRAM CAMPAIGN
The results of our 2017 Influencer Landscape Survey are in, with some surprising findings, which got us thinking about our latest topic of conversation – how should influencers be pricing their Instagram campaigns?
In the survey, 43% of respondents told us they assume brands pick influencers based entirely on follower size. However, a tiny 7% of respondents structure their fee pricing on the results their channels can offer a brand, and a vast 57% calculate it based on ‘the time and effort a campaign takes to be delivered’.
In these two responses, we see a massive disconnect. Why are so many influencers basing their pricing on effort, rather than anticipated results? Especially when they acknowledge that brands pick influencers based on perceived ability to deliver results?
Comparing other media formats, a brand would pay more to advertise in the pages of Vogue than a small local newspaper – even though that advertorial would take a similar amount of time and effort for journalists at both publications. The same would apply for buying an outdoor advertising slot at Piccadilly Circus, versus a local mall. Therefore, isn’t it natural that an influencer with a larger reach to the target audience should charge more than a small one, regardless of effort involved in a campaign?
We really need to think about how and why brands commission influencers... In modern influencer marketing, a blogger is equivalent to an advertiser and the success of any partnership will be judged on KPIs set at the beginning of a campaign.
These KPIs could be:
A brand may choose influencers based on their relevant follower size, or their ability to reach a new group of people. To explain, we don’t agree that an influencer’s total follower size determines their whole value, instead it’s about their relevant follower size. If you have 100,000 Instagram followers, but only 50,000 live in the UK and you’re working with a brand that only ships within Great Britain, then you could say your relevant follower size is 50,000 and your pricing should be calculated on this figure – otherwise you’re causing the brand to overspend.
Engagement and Sentiment
The brand may choose influencers with a smaller reach, but one that is very engaged. It rarely delivers when a brand pays a mega influencer a large amount of money to post once, about an irrelevant product or service. It’s far better to work with influencers prepared to create an integrated, worthwhile content concept. Brands also need to take the time to read through the comments on an Instagrammer’s latest posts to ensure their comments aren’t simply a collection of friends trying to help them gain traction, or are in any way auto-generated.
Traffic and Conversions
Instagram is notoriously poor for traffic conversions for brands, as the user journey (the online path of a follower going from Instagram to the brand’s website) is complex and disjointed. It’s sometimes worth reminding a brand this; if they are after website sales it may be better to direct them towards working with another of your platforms. The “swipe up” link ability on Instagram Stories does improve this though, so we’d recommend integrating this function into any Instagram campaign.
It’s very important for influencers to consider how and why the brand is working with you – if you’ve got 100,000 followers, the brand is expecting 100,000 followers’ worth of results. It’s far better to be transparent and tell them what proportion of your following is relevant to them, otherwise they’ll be disappointed and move on to working with others.
On traditional social platforms ROI is relatively visible. Influencers need to be aware that as budget for influencer marketing ordinarily comes from “paid marketing” departments, where they are used investing “X” knowing “Y” is the likely return. Some influencers struggle with being considered simply as an advertising platform, but it needs to be accepted just as it is within every other creative media sector (television, publishing, etc).
Brands can easily see likes, comments (tracking their authenticity) and read followers’ reactions. It’s easy to validate or undermine an investment. So, it’s important to price your activity fairly and reasonably if you want a brand relationship to have longevity. While they might pay you an extortionate fee once, if your post is perceived to have under-delivered they won’t do the same thing twice.
So, putting our money where our mouth is, here are our pricing suggestions. We recommend a £200 charge per 10,000 relevant Instagram followers – so our earlier example influencer could expect to charge the brand roughly £1,000 for one post on their product that only ships within the UK. Had all their following entirely lived in the UK, they could double that figure.
We'd like to add that we haven't plucked that number from the sky; instead we've based it on the amount brands are willing to spend within other areas of paid marketing. It largely considers the anticipated "return" a retailer expects per commercial £1.
As a final takeaway point; the influencer marketing sector is beginning to take shape, standards and regulations are being set in a way that support both the influencers and the brands. Be open with your numbers and create projects that deliver what the brand is looking for. Consider what you are doing for the industry at large, rather than as a temporary financial fix, before you over (or under) price yourself.