Does Influencer Marketing Work? How Much Does It Cost?

Does influencer marketing work? How much does it cost? You don't have to have these doubts anymore. See all about it in the article! 

In 2022, more businesses are using influencer marketing to generate content, increase brand awareness, increase audience engagement, drive traffic, and convert followers into customers. 80% of marketers believe influencer marketing works, and over 65% of marketers said they plan to continue to increase the share of their budget they spend on influencer marketing.

It is quite clear that influencer marketing has established itself as one of the most effective and valuable marketing strategies. But how expensive is it? How much should your brand spend on influencer marketing?

To answer these questions, we created this article to share some guidelines to help you understand how much influencer marketing should cost.

What is influencer marketing and how can it work?

Influencer marketing is a new type of marketing. This is when a company partners with an influencer in their industry to shape consumer behavior. This individual, trusted by the company's target market, can often influence buyers to consider, commit to, and use a company's product or service.

Today, there are two types of influencers:

• Micro-influencer: According to researchers, a micro-influencer has between 1000 and 100,000 followers on a given platform. For example, someone with 50,000 followers on Snapchat would count as a micro-influencer. In most cases, companies partner with micro-influencers.
• Macro-influencer: A macro-influencer has more than 100,000 followers. In most cases, influencers tend to include internet celebrities. Because of their massive following, influencers tend to charge high prices for their services, which is why small and medium-sized businesses latch on to micro-influencers.

Regardless of the type of influencer you choose to partner with, they can have an impact on your bottom line.

The cost of influencer marketing

When it comes to how much influencer marketing should cost, it depends on the size of your business and the resources you have available. In our experience, a good rule of thumb is to allocate about 1 – 25% of your marketing budget to influencer marketing.

If you're a small startup with a limited budget, you should focus on implementing your influencer marketing campaigns in-house. Alternatively, if you're hoping to make a big splash in your industry with influencer marketing and have a budget of at least $5,000 per month, you might consider hiring an experienced influencer marketing agency for a "do-it-yourself".

So how much does it cost to run your campaign in-house versus hiring an influencer marketing agency? What are the advantages and disadvantages of each?

In 2022, more businesses are using influencer marketing to generate content, increase brand awareness, increase audience engagement, drive traffic, and convert followers into customers.

Running internal campaigns

If your brand is just starting out and you have a limited budget for influencer marketing, a good option for you is to run your influencer campaign in-house. An in-house campaign can cost as little as $0 if you planned and executed it yourself.

Sounds amazing, right? However, even if you don't have to spend money to run an influencer marketing campaign yourself, it will still include the cost of featured products, shipping, and your time.

Sometimes when working with influencers, they are willing to promote your products or create content for your brand in exchange for just your products. This is a common approach for B2C brands on a budget. A new skin care brand, for example, might give away skin care products to influencers in hopes that they will leave a product review. This approach allows low-budget brands to collaborate with influencers.

equipped products

However, keep in mind that with featured products, there's usually no agreement or contract with the influencer, so your brand doesn't have much control over the influencer's content. If you don't have an influencer contract, you probably don't even have the option to review content before it's published  .

If you're able to invest a little more in influencer marketing , you can pay influencers to showcase your brand and products. Influencers who have experience promoting products or have a wider audience tend to pay more for a partnership. Because there are contracts involved in paid partnerships with influencers, they are more likely to honor the agreement. With a contract, you can also provide guidance on the type of content you'd like the influencer to produce and include the option to review their content before it goes live. As a result, you have higher quality content and a more successful campaign.

The biggest cost of influencer marketing is the time investment required to plan and manage a successful influencer marketing campaign. One of the most time-consuming parts is finding the right influencers that are a perfect fit for the brand. The process of researching and negotiating with potential influencers takes a large amount of time. An effective influencer marketing campaign usually requires at least three months of effort to see results. So if you're thinking of taking care of your influencer marketing in-house, be prepared to invest hours of your time each week depending on how many influencer partnerships you're juggling at once.

working with agencies

If you have a marketing budget for your business and want to see substantial results from influencer marketing, hiring an experienced agency to design and execute your campaign is a good choice.

How much does it cost to hire an influencer marketing agency? Although there is a wide range of prices for influencer agencies, we have a price range for reference.

Running internal campaigns

Hiring a full-time employee to run your in-house influencer marketing campaign can cost you anywhere from $3,000 to $8,000 per month, depending on your experience level. We will use this as a reference to compare the prices of a few different types of influencer marketing agencies.

Categories of influencer marketing agencies

There are several categories of influencer marketing agencies, each with pros and cons. Influencer talent agencies maintain a proprietary list of managed influencers. They can match you with proven influencers in their network, increasing your chances of successfully partnering with influencers. The downside is that their list is limited compared to the millions of influencers. Look for these types of agencies to have a minimum commitment that starts at around R$2,000 per month and extends to 10-40% of the total budget for larger campaigns.

the second category

A second category of influencer marketing agencies is software based. They sell you access to their influencer management software platform and can even help you manage your campaign on their platform for an additional fee. The best of these platforms have access to millions of influencers, but your team will still need to manage relationships with your influencers. Pricing depends on the size of your influencer network, platform features, and your maturity in the influencer space. Some platforms also take a percentage of their monthly budget to influencers, which is similar to the influencer talent agencies we discussed above.

the third category

The third category of influencer marketing agencies is the "made for you" model. This type of agency typically offers influencer marketing campaign services, where you communicate your goals and they take care of the rest. These types of agencies will often have a network of proven influencers as well as access to the latest industry tools and software platforms, ensuring that influencers are the best fit for your brand. They may be on the more expensive side , but it also offers the most value if you want to do influencer marketing, see amazing results, and earn your time back.

Working with agencies to make influencer marketing work

Wondering if you could do influencer marketing in-house, why bother hiring an agency to do it?

Working with a trusted and experienced agency can help take the guesswork out of influencer marketing. You will be able to work with a team of experts versus hiring an in-house person. Influencer marketing agencies dedicate their time to developing and executing influencer marketing campaigns with years of experience. With your expertise, you don't have to worry about managing an in-house team or going through all the mistakes while you and your team learn influencer marketing from scratch. Agencies can help you stay on top of ever-changing trends and social platform features that influence the effectiveness of different types of social content.

Also, having a trusted agency to manage your campaign is more efficient and cost-effective. Since agencies have already established channels and connections for influencers, you won't have to waste time searching for and vetting influencers. Working with an influencer marketing agency also allows brands to save time communicating contracts, expectations, payments and content comments with influencers. Instead, you can use your time to focus on tasks in your business that you know and enjoy.

Five factors that affect the cost of influencer marketing when it comes to results

In addition to the cost difference between in-house and agency services, there are many factors that can influence the cost of your influencer marketing campaign. In this section, we want to discuss the five most common factors that can affect the cost of influencer marketing.

1. Social media channels

Your campaign's social media channels are deployed to affect cost. For example, YouTube tends to be the most expensive social channel for influencer marketing because long-form videos require more effort to produce. Instagram, one of the most popular social media channels for influencer marketing, has a higher "market rate" than other channels like Twitter. Also, the number of channels used for your influencer marketing campaign will also change the cost. For example, a campaign that is implemented only on Instagram would be cheaper than a campaign that is implemented across channels on Instagram, YouTube, and TikTok.

2. Audience size of influencers

Although the number of followers an influencer has does not exactly determine their value, it is still one of the factors used to quantify "power of influence". Therefore, the number of followers of an influencer can drastically affect the cost of the campaign. Typically, influencers with larger followings will cost more to hire. 

Prices vary enormously from case to case. To find out the exact cost of hiring an influencer, you can contact them and ask for a quote. There are also free online tools that allow you to simply enter an influencer's social handle and the calculator will tell you an estimated cost for the influencer. These tools are useful for getting the right stadium prices, but they are also only rough estimates.

3. Influencer marketing works by engaging users

Since follower count may not always represent an influencer's value, brands use engagement as another important metric to determine an influencer's price. Engagement measures how many people actually react to the influencer's content. A higher engagement rate often means a greater reach of your content's potential audience. So if you partner with influencers who can generate high engagement rates, the cost will be higher. 

4. Product and Industry

Your product and industry can also affect the cost of your influencer marketing campaign. Some industries are more popular with influencers, such as the lifestyle niche. Since "lifestyle" is a broader segment that has many influencing factors, the average price tends to be lower. On the other hand, if your brand is in a more specific niche, such as consumer technology, where fewer influencers are available, you may have to pay a higher price to engage the big players in your niche .

5. Influencer marketing works by campaign type

Finally, the type of influencer marketing campaign you want to run can impact the cost. For example, running an exchange campaign is simply exchanging a product or service for a mention. While an affiliate campaign that gives influencers unique promo codes and pays influencers on commission can result in higher costs.

Some campaigns that require a larger scope of activity could also cause a higher cost to coordinate and manage the campaigns. Large-scale influencer marketing campaigns involving hundreds of influencers, for example, require the campaign manager to actively reach out to all of these influencers on an ongoing basis. These types of campaigns also require time to coordinate and develop long-term partnerships with influencers. Despite the challenges of setup and execution, we must emphasize that long-term partnerships with influencers can bring tremendous value to your brand. Long-term partnerships allow influencers to create consistent content around your brand, and this can help your brand gain continued exposure to your target audience. As a result,

Bottom Line: So Does Influencer Marketing Work?

Do you now have a better idea of ​​how much you should invest in influencer marketing for your brand? Remember that there is no one-size-fits-all formula for determining the cost of influencer marketing. Every brand and campaign is unique.

Depending on your social media channels, campaign types, industry, and influencers with your collaborators, the cost will vary. It's okay to start with a smaller budget and increase it over time when you feel comfortable with the results. Working with a qualified marketing agency like  Creativ24  ​​can also help ensure you're making the most of your budget and maximizing your ROI.

Need help designing and executing an effective influencer marketing campaign for your brand? Send us a message and we can help you revise your goals.

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