Figuring out how to pay influencers in ways that are mutually beneficial, cost-effective, and forward-looking takes some knowledge and creativity. The best approach to creating an effective influencer program is to take the time to analyze your partnership and choose the optimal structure for both parties. In other words: personalize and customize.

The true cost of influencer marketing

Influencer marketing is resilient and growing. The industry will be worth up to $15 billion by 2022, and for good reason. Influencer marketing is an effective channel that’s worth the cost. Even during uncertain times, 96 percent of U.S. and U.K. consumers engaged with influencers more during the pandemic. This is great news for the industry, but with rapid growth, there are always challenges and adaptations to make it work best for your company.

Popular macro- and mega-influencers come with a huge price tag, with Kylie Jenner, to pick one example, commanding a whopping $1 million per sponsored Instagram post. It’s no wonder that marketers have cited the rising costs of influencers as a top challenge. With rapid growth of influencer marketing comes further challenges for marketers. Even though many now diversify their influencer partner portfolio to include more affordable micro- and nano-influencers, many marketers don’t have the capability to customize payments and incentives to suit a diverse portfolio of influencers.

Creating a cost-effective process to pay influencers

One study indicated that 86 percent of marketers don’t know how influencers calculate their fees. More than one in every seven influencer campaigns have payment processing issues, including how influencers are paid and determining their rates. To adapt to and even thrive during the rapid growth of influencer marketing, brands need to not only diversify the types of influencers they work with, they need to pay them differently, too.

In this guide you’ll discover the top seven ways you can pay influencers so that whether you’re working with the Kylie Jenners of the world or smaller, more accessible influencers who often work for a nominal fee or in exchange for a free product, you can develop a relationship that’s mutually beneficial and effective.

Yesterday’s social media influencer payments

To fully understand what’s happening today and predict how influencer payments may look in the future, let’s first look back at how the influencer marketing industry has adapted since the dawn of social media and the first sponsored and gifted posts hit screens.

2004: MySpace launched the singing/fashion design/makeup career of Jeffree Star, who became the platform’s most followed user. Brands rewarded influencers with money or gifts to feature their products in their videos. Monetary compensation and comped attendance at events became commonplace as influencer payment options.

2006: The pay-per-post model was in full swing and the first marketplace to pay bloggers to create content for brands was launched.

2009–13: Some influencers began to charge a fee to merely “check in” at a location. Sponsored posts took off. In 2009 Chris Batty, then the VP of sales for Gawker, proclaimed that “the majority of our advertising revenue will be in sponsored posts.”

Not long after, Forbes and the Associated Press jumped on the bandwagon. Even early critics like Mashable started selling sponsored content to different enterprises. Brands began sending gifts to influencers solely to see them unboxed online.

2014–18: Still, only 39 percent of marketers planned to grow their influencer marketing budget in 2018. Brands began to offer store credit and rebating rewards for their partners to get around an Advertising Standards Authority (ASA) ruling and also make posts appear more authentic. The ASA’s guide for influencers (U.K.) and Federal Trade Commission (FTC) compliance (U.S.) requires clear labeling for sponsored posts, advertisements, or including gifted items (marked by #sponsored, #ad, or #gifted, respectively).

Today’s influencer payments

Cost and value of influencer campaigns

In 2021, influencer marketing still costs between $100 and $1 million per post. Pay per post dominates, and engagement is by far the most common metric to measure influencer marketing success, used by 75 percent of influencer marketers. The pressure is on to prove ROI, so influencers are increasingly paid a fixed rate with a performance bonus, and even performance-only payments have become more popular. These types of payments also offset issues from those with paid followers or low-quality engagement, which can be difficult for brands to detect and lead to lower impact and return on investment (ROI).

In fact, 11–25 percent of marketers planned to spend over 40 percent of their digital marketing budgets on influencer marketing in 2020, while almost 20 percent said that they would devote 26–50 percent of their digital marketing spend on influencers. In May 2020, 74 percent of U.S. marketers surveyed said they planned to use influencer marketing as much as or more after social distancing guidelines and the like were lifted.

Tools to make the process of affiliate marketing smooth

Advanced tools and technology like have been a game changer for the influencer marketing industry. In addition to data analytics reports and tracking tools, now brands can leverage robust software as a service (SaaS) platforms that manage the entire influencer partnership lifecycle. With a full view of the customer journey from that first click to conversion, marketers can finally build a picture to prove their influencer partnerships’ ROI. In fact, 89 percent of marketers now say that the ROI from any influencer marketing is comparable to or better than other marketing channels. Marketers who invested in the channel earned an average of $5.78 back in media value for every dollar spent.

Average costs and rates when working with influencers

These benefits more than pay for the demands of influencers with regard to payments, which average:

$1,000 per 100,000 followers for Instagram influencers
Approximately $2,000 per 100,000 followers for YouTube influencers
$500+ per campaign in 24 hours for Snapchat influencers
For more accurate statistics, head over to our article on how much influencers charge per post.

The right contracts and payouts for influencers

Today and tomorrow, influencers need appropriate contracts and compensation depending on a variety of factors: follower size, brand relationship, channel affinity, content quality, engagement, performance, and overall ROI. At the same time, marketers need to take a more individualized approach across their network of influencer partners.

Contracts and compensations should be customized for each individual partnership. Some common categories of influencer partnerships include:

Celebrities and “cewebrities” (>1m followers): famous beyond social media (i.e., movie, TV, music, or sports stars). Cewebrities made their fame online but now are universally recognized. They charge per post.

Macro-influencers (10k1m followers): Became popular on social media. Some charge per post but others may be open to other payment types.

Micro-influencers (<10k followers): Everyday people with a decent following and influence. Micro-influencers are often undervalued and underused, and these smaller influencers need a customized approach. Most don’t expect pay per post,particularly with large brands. They are more likely to work on a performance basis.

Organic influencers (any amount of followers): These influencers represent your true earned media. They may not have many followers, but if they have a strong affinity for your brand they often say good things about your brand.

Personalities: Influencers who produce their social presence like a reality show; you know what they ate for breakfast, who their best friends are, and what their favorite candle is.

Visual informants: Your standard social influencers have followings based on who they are, who they know, or what they’ve worked on. Because their platforms are built on popularity and good taste, visual informants can lend positive brand sentiment and influence buying decisions just by being seen or associated with a product.

“Creativists”: Old-school visual talents, generally coming from an artistic background. They’ll post a beautiful picture of, for example, a coffee mug and, while that content may not convert well, it can often be successfully deployed by a brand across their owned and paid channels.