How should influencers be paid?

Prior to the introduction of smaller fan-based influencers, marketers primarily used Macro and Mega influencers (celebrities) who ask for $1 million per post like Kylie Jenner. This has resulted in many marketers expanding their network of influencer partners to include more affordable micro- and nano-influencers.

As we walk into 2023, marketers are beginning to worry about how to regulate influencer marketing payment in order to ensure effectiveness. According to one survey, 86 percent of marketers are unaware of how influencers determine their costs. Payment processing concerns, such as how influencers are paid and how their fees are set, affect more than one in every seven influencer campaigns. 

Brands must not just vary the influencers they work with but also the ways in which they are compensated if they hope to survive and even thrive during the rapid expansion of influencer marketing.

How Influencer payment methods have evolved

Influencer marketing industry has changed since the advent of social media as the first sponsored and gifted posts hit screens. In order to properly comprehend what is occurring right now and predict how influencer payments may look in the future, let’s look into the past.

In 2004:

Jeffree Star’s career in music, fashion design, and makeup was begun by MySpace, and he eventually became the site’s most popular user. Influencers were paid by giving  gifts in exchange for featuring brand’s goods in their videos. As methods of payment for influencers, monetary compensation and free participation at events was also a standard that year.

In 2006:

There was the emergence of the pay per click method of payment. This time bloggers were employed to write articles about products and were paid based on the number of click open they got.

2009-2013:

This was the beginning of the charge fee from influencers. In 2009 Chris Batty, the then VP of sales for Gawker, proclaimed that ‘the majority of our advertising revenue will be sponsored post.

Not Long after was the emergence of product unboxing. Brands will send gifts to influencers while they do videos unboxing them and tagging the brands.

Things have evolved even till now.

After gift unboxing new methods of payments have been involved over time. We will be looking at some of the most effective ones below

How should Influencers be truly paid?

Influencers are usually paid according to their audience and engagement rates. Although it is an effective way to measure influencer marketing, this form of payment is not always agreeable for influencers and sometimes not good for brands too. Marketers should know the different Influencer marketing payment methods and what type of influencers are suitable for them.

5 Ways to pay Influencers in 2023

1. Gifting or Rewards

Gifting or rewards is a good payment form for influencers. This is when brands give out their products to influencers to review or give out travel trips to influencers as reward for their content. 

Gifting allows influencers to test out new products and review them before their competitors, which attracts audiences who want to see someone they trust try a product before purchasing it. 

Although this type of payment system is not totally acceptable by influencers, Smart influencers understand that gifting gigs can be an important element of expanding their brand. 

Mid-level, macro-, and mega-influencers are more likely to reject gifting partnerships unless they see real value in the product they’re promoting. It is important that gift-only collaborations leave the influencer feeling valued. Marketers should be aware of influencers’ savvy; a quick Google search is all it takes for them to find a brand’s profits for the previous year, and they can easily estimate a realistic marketing budget from that figure. Therefore, brands may want to consider reserving “gift-only” payments for micro- and nano-influencers (<50,000 followers).

Gifting and reward influencer payment method is more likely suitable for nano and micro influencers.

2. Fixed payment 

This is the payment plan that involves agreeing with influencers for a fixed prices that will include all production costs including their benefits. This type of payment can be made partly giving a percentage advance and balance after delivery. Like our recent campaign with Pillow, we made 60 percent advance deals with creators to balance after job delivery.

This payment plan can be one sided sometimes. For example; An influencer may be underpaid by brands after exceeding targets and brands may overpay creators who underdeliver.

Fixed payment method can work for any type of influencer but more advisable for already established influencers with an almost predictable results (Macro and Mega Influencers)

3. Performance based 

This type of payment is for the purpose of trackability and execution. Whether the Influencer marketing campaign is for brand awareness, sales, email list or product awareness, this type of payment system works. 

Under a performance based payment plan, Influencers are fully paid according to the results they bring. For example an influencer may make a post on Instagram stories and will be paid according to the number of signups through his link. Influencers may earn 3 to 30 percent commission on average. 

To track the result of influencers, brands may use, promo codes, affiliate links, unique landing pages, or a swipe up link.

This type of payment system ensures effectiveness but may not be accepted by all influencers because then influencers will not be paid for the content they create and time involved in putting together the user generated content.

4. Fixed payment + Performance bonus

This is the combination of both fixed payment method and performance payment method. With the fixed payment plus performance bonus model, everyone wins. 

With this payment method Influencers are paid a fixed price plus a bonus based on some KPIs.

Influencers set a standard they must meet in other to receive the performance based bonus. It is like paying influencers for the content they produce and also how well their content does. 

Some major key performance indicators are

  1. Click through rate
  2. Sales
  3. Registration/signup rate
  4. Number of downloads
  5. Engagement rate
  6. Viewers reach
  7. Page visit

This type of payment method helps regulate influencers’ payment with result. It also helps to ensure performance based marketing 

5. Pay per post 

Pay per post is the payment system Kylie Jenner and other top celebrity use. As the name implies, Influencers are paid per post with this payment system.

Here is an average cost of pay per post payment system in 2021:

Facebook. Influencers on the platform charge an average of $25 per post, per 1,000 followers

Instagram. A cost-effective channel with an average price of $10 a post, per 1,000 followers

Twitter. At $2 per post, per 1,000 followers, Twitter offers the lowest influencer marketing prices

YouTube. On average, influencers charge $20 a video, per 1,000 subscribers

Snapchat. Influencers on Snapchat charge $10 per post, per 1,000 followers

Pay per post payment system is peculiar to influencers with already established fan base Mega, Macro and Midi influencers

With more individuals blocking digital ads and a growing appreciation for user-generated content (UGC), 2023 will be a perfect year to implement influencer marketing. Selling to prospects via their preferred people has been found to be more successful digital ads. Choose your preferred payment system and add influencer marketing to your 2023 marketing strategy.

TIMA is a home for African influencers. We run data driven influencer marketing campaigns by connecting brands to influencers that match their brand’s voice, have their required audience and fit their budget.

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One thought on “Pay Influencers using any of these 5 Payment Systems

  1. […] and affiliate marketing are two common choices. While affiliate marketing is a possible payment source for creator partnerships, businesses should be aware of the key distinctions between the two before […]

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