You must reward influencers for helping build your brand – but it’s an intricate process that must be managed closely.
By now you know influencer marketing is today’s best tool for brand building and increasing customer awareness of your business or organization. Traditional ads and media buys, even many of those designated for an online audience, are quickly being phased out and may soon be irrelevant in today’s connected world.
Think about it: when is the last time you picked up a newspaper and checked the advertisements section to check the “hot deals” over the weekend? If you’re like most of us, it’s been years. Even Black Friday ads are now posted online, where smart shoppers can quickly and easily scroll through the various offerings to create their Friday morning strategy.
Influencer marketing is the way to go in today’s digital age, and compensating influencers is part of the equation. Whether you’re new to the influencer marketing game or you’ve been entrenched in this strategy for a few years now, the compensation question is one that comes up quite often.
“Businesses generate $6.50 for every $1 spent on influencer marketing.” — Tomoson
Understand Influencer Value
The first step in wrapping your head around the compensation side of the influencer marketing equation is understanding that a good influencer adds value to your organization.
Influencers that are working your campaign and generating results can be a highly effective part of your marketing strategy and must be compensated. A 500%-600% ROI isn’t uncommon, so don’t hesitate to take care of influencers who are genuinely spotlighting your brand via their posts.
Retrain the Boss
When creating a compensation plan for brand influencers, many marketing managers work hard to convince the individual holding the checkbook to pay for something that is still relatively new to the marketing world.
It’s easier to go to the boss and say, “We’d like to increase ad spend in this area, with x target demographic in mind, because we’ve historically seen some good lift when we do so.”
It’s more difficult to say that you’re looking to invest in a blogger as part of a marketing/creative collaboration and that you’ll need to pay this person or send them free stuff up front. Come to the table with statistics and figures, and show how the return on investment is quite powerful.
Your influencer’s compensation plan should be based on the potential benefit to your brand.
Let’s say you’re engaging with a blogger or other influencer who has 500,000 followers and is considered a leader in their field. That person would certainly command a premium over someone who has 15,000 followers. That said, there is more to the compensation equation than sheer number of dedicated fans.
The influencer should be gauged on the level of unique conversations that are started in response to their posts, the quality of their content, and how they conduct themselves as professionals. Don’t let the numbers fool you, though, quality is preferred to quantity.
You’ll want to marry your content expectations to the influencer’s compensation requirements. For example, if you’re looking to retain rights to the influencer’s work and then repurpose it over the next several months or years, expect a higher rate.
Influencers will also demand higher compensation levels if you demand exclusivity with them – where they commit to not endorsing or posting about your competitors. Keep in mind you are essentially paying them more as compensation for potential lost earnings from other brands. You certainly can expect any photographic posts to reflect your product or service, and nothing from the competition.
Keep the following stats in mind:
- 84% of influencers accept monetary compensation for posts – 11% do not, and 4% only receive products or swag.
- 70% of influencers prefer to be paid directly versus receiving an alternate form of compensation.
- Influencers generally utilize 2-4 monetization options – sponsored content, affiliate links, and targeted ads being the most common.
Keep in mind influencers are entrepreneurs. They create content, manage social media sites, troubleshoot problems, maintain communication with clients, and spend a lot of energy doing their jobs.
The influencer marketing world is quickly becoming the marketing channel of choice for smart business owners everywhere. Keep those ROI numbers in mind as you create a compensation model for your group of valued influencers.