Though the going rate for partnering with social media influencers varies as much as their online personalities, there are best practices to negotiating a mutually beneficial agreement.
Types of Compensation
Monetary, Flat Fee
The most common form of compensation is paying influencers a flat fee in exchange for promotion. Brands and influencers alike prefer a flat fee approach because it greatly simplifies the partnership. It’s especially useful when brands must allocate budgetary funds many months in advance.
Monetary, CPM (Cost per 1,000 impressions)
CPM or Cost per Mille (1,000 impressions) is a strategy some brands use to tie compensation to post or video performance. This method must be carefully managed since a video greatly exceeding its estimated views will balloon costs.
Monetary, Percentage of Sales
Some brands prefer offering influencers a percentage of sales of goods or services they promote. This strategy can work well when the influencers truly believe in what they are pitching.
Free Product or Services
There are definitely influencers willing to promote your brand in exchange for free products or services. It may be difficult to recruit influencers with a large following using this strategy but those looking to get established will likely be interested.
Payment Hinges on Platform
Whatever route you choose to take, it’s important to remember compensation varies greatly based on the platform. On YouTube, for example, the accepted approach is to pay influencers based on average video views. Historically, some brands focused solely on an influencers’ followers or subscriber count while ignoring their actual reach. Some brands have fallen into the trap of paying an influencer based on a following of several million only to realize the influencer averages only a few thousand views per video.
Choosing the Right Strategy
Before finalizing your brand’s compensation strategy, consider inking long-term partnerships with each influencer, since some may offer volume discounting. More often than not, forging extended relationships with influencers will prove more economically fruitful than one-off sponsorships.
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