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  • Writer's pictureLive Oak Management

An Influencer’s Worth: What Brands are Willing to Pay in 2021

By: Madison Mursch, Account Executive

Influencer: A person with the ability to influence potential buyers of a product or service by promoting or recommending the items on social media.

Scrolling through a feed of entertainment, news, and others’ lives, we soak in a wide plethora of content day-to-day. Yet, have you considered how much of that content consumption goes unnoticed as social media marketing? The most common form of disguised marketing strategy is influencer marketing, the endorsement and product placement within a social media user’s post.

Now, we are all pretty familiar with social media professionals in their given field who may be considered of celebrity-like status, but many brand endorsements are promoted through “micro-influencers,” or everyday people sharing products or services with an element of relatability and attainability. According to Forbes “Micro-Influencers: When Smaller is Better,” they can be defined in the advertising space as a social media user with 10,000 to 50,000 followers. While a social media persona with 100,000 or more followers is a “macro'' or “mega-influencer.” But just how much are brands willing to pay today for this kind of subtlety in an advertisement?

There are varying factors that equate to an influencer's worth including follower count and their engagement that is calculated through in-application analytics or third party analysis. Specific engagement rate is key in negotiation, this rate can be calculated by dividing engagement number (how many people like, comment, and send your posts) by the number of people following. Brands also like to consider the influencer’s specialization or perceived notoriety in a given field and their demand. Whether their target audience is influenced due to their expertise and the creative message conveyed in posts is crucial.

Companies also take into account usage rights and exclusivity when making an offer. An influencer's usage rights include whether or not the company can repurpose the influencer’s content since they are considered an independent contractor. According to the Influencer Marketing Hub, if the content is going to be reused for the brand’s socials, the price they are offering increases significantly. It is also essential for marketing teams to consider the exclusivity of the influencer’s property. Therefore, is the brand promoting other competitive brand’s products? In this case, signing a non-compete agreement or exclusivity clause can raise the price of the influencer-brand compensation agreement.

Now let’s talk about hard numbers. On Instagram a micro-influencer is calculated to make approximately $100- $1,000 for one post. While those with more significant followings and engagement are worth $5,000 to $10,000 or more per post. Rates for YouTube are comparable while TikTok, Twitter, and Facebook are still lower on average due to reach.

Consider the case study of Katy Bellotte, an Elon Alumnus and lifestyle influencer; in an interview with Business Insider, Bellotte opened up about her earnings as an influencer with 176,000 followers. She admits her rates fall anywhere between $2,400 and $5,000 per post. These numbers come following years of work in the YouTube and Instagram limelight, building a loyal following and fanbase and building a brand upon the foundation of authenticity.

So, brands seek expertise, yes – but they are also willing to pay the big bucks when it comes to branding with subtlety, relatability, and an authentic voice. The voice of the audience has an influence on the way brands market themselves today more than ever before.

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