Am I paying enough? How to gauge the market rate for your collaboration
The best way to know if you are offering a good market value is to use an old marketers' trick: test & learn!
A great way to test the incentive you're offering is to set up a State Your Rate campaign where the influencer will share how much they want to be paid in order to work with you. After running State Your Rate campaign for a set period, you can see the standard deviation of offers and decide what rate to offer for a new Flat Rate campaign.
This option also allows you to negotiate with influencers. Don't worry: you get to select the influencers you partner with, so if influencer request payments that are outside you budget you can decline them from the campaign and move on to influencers that meet your budget.
A good starting benchmark is to always offer a value greater than $100.
This could include a combination of the product value plus your incentive compensation. You're essentially hiring a contract worker, and as a creator, it takes time and skill to build the content they will post for you. You want to make sure you're compensating your partners appropriately. The more demanding your ask, including multiple collaboration requirements, the higher tier of influencer you want, and the more niche the influencer you target, then the higher the market rate influencers will demand.
Keep in mind that, while micro and nano influencers have fewer followers, their followers are more likely to be highly engaged. Not only are market rates for micro and nano influencers lower than macro and mega influencers, but we have also found that influencers with higher engagement rates (usually meaning lower follower counts) drive more conversions overall because their communities trust them more. This often results in a higher ROI for nano and micro-influencers. (See this recent academic study on the relative effectiveness of micro vs. mega influencers.)
A general starting point for incentive pricing
- A benchmark incentive of $100 for a standard set of deliverables from micro-influencers.
- 1 post, 2 stories or 2 Tiktoks within 2 weeks for a physical product mailed to them.
- Increase from $100 if you are requiring:
- more content or very specific/tricky content
- macro or celebrity-level influencers
- very high influencer engagement rates (over 2-3%)
- less than 2 weeks for content fulfillment
- any in-person component (with travel)
- a time-intensive onboarding (zoom call, interview, or knowledge test)
- only a very specific niche (dads, asian-foodies, 45+ year fitness buffs, university students from specific schools)
- boosting rights
- an exclusivity period
- unpopular or sensitive product (charity event tickets, colon test, industrial flashlight, political social media app)
Use Audience Insights reports to understand a specific influencer's engagement rate and credibility score.
If you need help setting up your campaign, reach out book a call to explore our Managed Services or reach out to your Client Success Manager.