In 2022, brands are investing more than ever into influencer marketing. It’s become a staple in overall modern marketing strategy, is proven to spread awareness beyond what’s possible for brands alone, and can even drive substantial revenue.
However, what once was a largely unregulated market has turned into a coveted means of advertising. Influencers are booked out for months, becoming more selective about who they work with, and — most notably — are raising their prices. In our work with influencers on behalf of our clients in the last year, we’ve found that influencer prices have nearly doubled.
So why are influencer prices going up? What caused this increase, and what can brands do about it?
Why are Influencer Prices Going Up?
There are numerous reasons why influencer prices are going up (we’ll get into the specifics of why shortly). One of the overarching reasons for this increase is due to the fact that it’s simply an in-demand market — more brands are looking to partner with influencers, so influencers feel comfortable raising their prices.
Because influencer marketing has now been around for more than a few years and the demand is so high, influencers are recognizing their value in promoting products. They’re also less siloed than they used to be and tend to be a part of community groups or even agencies where they exchange tips, tricks, advice, and rates with other influencers.
In addition, influencers are becoming more aware of additional value they can add to a brand’s overall marketing portfolio. User-generated content tends to perform well in a brand’s email, website, social advertisements, etc. and influencers know that their content is being used to drive sales. Due to the value that they are adding beyond organic social, they want to be compensated.
Additionally, influencers are charging more for the services they provide based on the time that goes into creating various types of content. With the rise in popularity of video content through TikTok and Instagram Reels, influencers are charging more for two key reasons:
- More time and effort are required to create and edit
- A larger number of people are reached through this type of content
So, while there are certainly benefits to securing video content in conjunction with your influencer marketing efforts, it comes at a higher price.
From groceries to gasoline, prices are going up across the board in the US. As the cost of living increases, the price of collaborating with influencers increases as well. Just as businesses raise their employees’ salaries to account for rising cost of living, influencers — who are in charge of their own salaries — must make adjustments to their pricing as well.
How Should Brands Work with Influencers’ New Prices?
Brands are left wondering how they can afford to continue working with influencers who have raised their prices. Of course, there are some practical ways to pivot your strategy and reallocate your budgets, but here are a few things to consider for your influencer marketing efforts despite prices going up.
Think of It As A Content Shoot
In addition to the awareness and potential sales benefits of working with influencers, consider the content that you are getting out of the collaboration. It can be extremely costly to create brand content on your own when it comes to sourcing models, locations, photographers, and editors. When you work with an influencer, you are paying them to stage, photograph, and edit those photos — at a fraction of what you would pay for a professional photoshoot.
So, when you consider the saved cost in that regard, working with influencers can actually save you money (especially if you pay for additional rights usage, which we’ll get into later).
Only Pay for What You’ll Use
As we discussed, using influencer content in social advertising or email marketing can increase costs as influencers are beginning to charge more for additional usage for their content (often a monthly fee for a specified amount of time).
To streamline their efforts, many brands require blanketed usage rights upfront for each and every collaboration, but sometimes end up not actually using all of the influencer content they get in their marketing efforts – therefore wasting that additional spend on the rights.
Our recommendation is to request separate rates for organic and paid/digital usage and have your original contract be for organic use only. After you receive the content and decide you’d like to use it, reach back out to the influencer to get the paid/digital rights.
Offer Other Incentives
Brands may not have an extremely large budget to pay influencers up front, but there are other ways to incentivize influencers to collaborate with your brand through commissions. By creating a commission-based compensation structure, influencers can get a cut of the sales they are driving, which creates a win-win situation.
Because influencers make commission off of each sale associated with their account (whether through an affiliate link or an affiliate code), they are more inclined to post regularly about the product, rather than a one-time post.
The influencer economy is only going to continue to grow. While some theorize that the influencer bubble will eventually burst, it likely won’t happen any time soon. As you continue to invest in your influencer marketing efforts, keep in mind that you are doing just that — investing.
Influencer marketing is not just a fad or a passing trend. It is a viable and successful means of advertising that brands of all sizes can take advantage of to grow their business.
Looking to partner with an agency to manage your influencer marketing? Reach out to the social team at Blue Wheel for more information.