As influencers have become an increasingly important part of marketing campaigns, many brands have noted escalating costs for influencer content and distribution. Gone are the days when gifting alone attracted mid-tier influencers, and those who once charged hundreds per post are now setting their rates much higher.
Fortunately, also gone are the days when marketers had to guess an influencer’s worth. Thanks to increasing transparency and better measurements for ROI, marketers can now determine just how much revenue, engagement and awareness an influencer has contributed to their brand, making it much easier to evaluate their value. By looking at the ROI, many brands are finding that despite increased rates, Influencer Marketing is still the most cost-effective strategy for reaching an audience in a way that inspires real action.
As you negotiate with influencers for your own campaigns, here are three important factors to consider:
The value of content
Influencer collaborations aren’t just an opportunity to reach your target audience; they’re also an opportunity to add compelling content to future campaigns, including your own social media efforts, newsletters and EDMs, where influencer content has proven particularly effective, boosting open rates, click-through rates and overall purchase rates. Studies also show that readers spend 7 times longer viewing influencer content than they do ad content.
When negotiating with influencers, mentally separate the value of content from the value of distribution. How do the influencer’s rates compare with the costs of producing professional imagery in-house? What image rights will you have? Thinking of content separately from publication will allow you to better assess the value of a collaboration.
Control of the message
Given their similarities, it can be easy to confuse Influencer Marketing with PR, but it’s important to remember how these strategies differ. An organic post, even if prompted by your PR agency, is not Influencer Marketing. You get free exposure and an objective endorsement, but what you lack is control.
With Influencer Marketing, you are engaging an influencer in business, not simply making content suggestions. You therefore have a voice in how your brand is portrayed, the calls-to-action used, and the messaging. Influencer Marketing works best, of course, when a genuine relationship exists between influencers and brands. But ultimately, if you expect guaranteed exposure and some control over an influencer’s content, this is marketing, not PR. An influencer’s rate should therefore reflect this control, and not just the exposure.
Influencer motivation
Another important factor to consider as you determine influencer compensation — particularly when choosing between gifting and payment — is the importance of timing and influencer motivation. Influencers who receive products or services ahead of publishing have less intrinsic motivation to fulfill specific obligations than those who know their payment relies on meeting requirements. So if you’re a retail brand planning for a specific shopping season or an event producer promoting an upcoming trade show, paying influencers upon completion of their work will better ensure the content is published when it has the greatest impact.
Bottom Line: Focus on your ROI
Ultimately, your marketing dollars are only well-spent if you see a return. Spending $4,000 for an Instagram post sounds expensive, but it makes good business sense if you earn a multiple of that in revenue. Likewise, gifting might seem cost-effective, but giving away product gets expensive very quickly if you aren’t reaching your marketing goals. Fortunately, the ROI for influencer marketing across all industries is strong — 11x higher, in fact, than that of digital display ads and 4x higher than brand-shared content.
As you assess Influencer Marketing ROI, it’s important to remember to include more factors than immediate sales. Influencer Marketing can boost brand awareness, strengthen loyalty, and even help you gain a stronger foothold in a new market. Establishing Key Performance Indicators (KPIs) ahead of your campaign will help you better determine whether your campaign is a success, and more easily establish the return on your Influencer Marketing investment.
Only by evaluating each of the above factors — from the value of professional imagery to the creative control over influencer content — can you assess the true value of an influencer collaboration. Influencer rates may have risen, but in terms of reaching KPIs, so has their value.
This article first appeared on the Shopping Links blog.