In this article, we discuss influencer marketing and what it costs, as well as what companies should consider when planning influencer marketing investments.
Commercial collaboration refers to marketing carried out through social media influencers' channels. In commercial collaboration, a company or organization offers an influencer money, products, or services in exchange for visibility on the influencer's own social media channels. Commercial collaborations can be used for various purposes, such as brand building, sales, or other communication impact.
In commercial collaboration, a company or organization offers an influencer money, products, or services in exchange for visibility on the influencer's own social media channels.
The most cost-effective way to start influencer marketing is to implement influencer-driven PR campaigns. Their goal is to offer influencers something so interesting that the brand receives earned visibility in return through the influencers' own channels.
Typically, influencer-driven PR campaign budgets range between €5,000 – €10,000. This amount includes the agency's planning work (concept development and influencer mapping), PR distribution production, and logistics, i.e., delivering products to influencers.
Read more about influencer-driven PR
Campaigns based on commercial collaboration, in which influencers are paid a fixed fee, typically range between €10,000 – €30,000 when implemented through agencies in Finland.
The price of an influencer campaign is affected by the scope of the collaboration, the number of influencers, and the campaign duration. The price typically includes the agency's planning work (campaign concept), influencer mapping, campaign management, and reporting.
When a company pays influencers for commercial collaboration, it simultaneously ensures that the desired key messages are conveyed as planned in the content.
Campaign impact and attention value can be improved by leveraging the influencer's popularity in other marketing activities, such as communications and advertising spaces.
When a brand wants to collaborate with large, publicly known individuals (such as artists) and use them, for example, as advertising faces for a year, investments can rise significantly. Multi-channel campaign pricing is affected by the chosen influencer's brand value and recognition, as well as the agency's planning and production costs (concept development and advertising production).
Typically, multi-channel campaigns fall in the €25,000 – €50,000 price range, but with a well-known public figure, the price can rise to six-figure sums. When a brand decides to invest in a prominent influencer, the budget should be allocated sufficiently for paid advertising as well.
Read how Olvi's campaign effectiveness improved with a multi-channel influencer campaign
Unlike traditional paid advertising, influencer media pricing is often challenging for first-timers. Influencer pricing is largely based on demand and supply.
Pricing for collaboration projects with individual influencers varies from micro-influencers at a few hundred euros to well-known YouTubers and public figures commanding tens of thousands of euros.
Below is a breakdown of what collaboration with an influencer marketing agency consists of and what affects it:
Factors affecting influencer pricing:
Additionally, brands should be aware that content usage rights in advertising are often priced separately. Typically, a usage rights surcharge is approximately 20%-50% on top of the commercial collaboration price.
Influencer pricing is affected by reach, the influencer's brand value, channels used, collaboration duration, and content production method and advertising rights.
Influencer pricing is also affected by potential managers or other artist representatives, such as record labels, who handle the influencer's commercialization. In this case, their work is also valued as part of the overall package.
When planning influencer marketing investments, it is important to consider your own objectives, target audience, chosen methods, and naturally the available budget. The brand's desired exclusivity (the influencer cannot collaborate with competitors) can also significantly affect the compensation paid to the influencer. If the goal is, for example, to increase awareness of a new product, an effective approach is to implement a campaign during the launch in which multiple influencers introduce the product to their audiences, each in their own unique style.
Longer-term and deeper brand story collaboration is often best implemented with video-driven influencers, such as YouTubers or TikTokers, as a series of one or more videos. Video-based, extended storytelling has proven strong impact in influencer marketing – just as we have learned from traditional media (such as television and streaming services).
When it comes to compensation paid to influencers, the primary focus should be on the influencer's actual reach and effectiveness.
The importance of organic reach has declined in recent years, and fewer and fewer influencers reach a significant portion of their followers without paid advertising.
The importance of organic reach has declined in recent years, and fewer and fewer influencers reach a significant portion of their followers without paid advertising. Marketers should therefore familiarize themselves in advance with influencer follower data, such as reach and engagement rates. It is recommended to use independent third-party monitoring systems, such as the globally renowned CreatorIQ platform used by Troot. This way, you can calculate an open preliminary estimate of reach and cost per contact. After the campaign, it is essential to analyze the return on investment and the actual cost per contact.
It is important to document and collect historical data on the results of influencer campaigns and ongoing collaborations – including reach and price levels of different influencers. Additionally, you should monitor effects on brand perception or, for example, e-commerce sales by using tracking links or campaign codes.
Below is a list of Troot's historical data-based, average realized CPM prices (cost per thousand impressions) across different channels. The figures reflect influencers' actual reach. When comparing prices to other digital marketing, it is good to remember that an influencer's fee always includes content planning and production. Additionally, engagement rates in influencer content are often significantly higher than in, for example, traditional Facebook advertising.
Average CPM prices in influencer collaborations:
You can calculate the realized CPM price using the following formula:
(Influencer fee) / (Publication impressions)) x 1000 = CPM
Example:
(€2,500 / 100,000 impressions) * 1000 = €25 CPM
Read how to measure influencer marketing effectiveness.
One of the most significant factors affecting influencer marketing costs is naturally the compensation paid to influencers or the product and service compensation provided. However, it is important to understand that the process also involves a considerable amount of time-consuming expert work, whether performed by the client or a partner agency.
The marketer must first define clear objectives, create a brief, and set a budget to guide investments in the right direction. In addition to strategic planning, resources are required for collaboration coordination, influencer mapping, contract negotiations, content development together with influencers, and campaign reporting and analysis.
The popularity of influencer marketing grows year after year, and at the same time, brand requirements for, for example, industry-specific exclusivity are increasing. This is also important to consider in influencer compensation. Companies can implement influencer marketing either internally by hiring a specialist or by utilizing a specialized agency like Troot.
As influencer marketing investments grow, marketers should use specialized technology. It can be used to find influencers best suited to the brand, analyze audience data in advance, manage campaigns and communication, create contracts, and report results. Using technology significantly improves process management.
Troot uses CreatorIQ, a globally respected influencer marketing management platform. With it, we conduct accurate influencer mapping, optimize campaigns in real-time, and report results based on third-party neutral data.
For us at Troot, transparency – in both pricing and data – is one of the key principles of responsible influencer marketing.
