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An Influencer Price Calculator and How Brands Can Leverage Its Potential for Their Next Collaboration

An Influencer Price Calculator and How Brands Can Leverage Its Potential for Their Next Collaboration

 

Brands that leveraged influencer marketing to drive their 2021 sales really hit the nail on the head. Influencer marketing has grown from $1.7 billion in 2016 to a market size of $9.7 billion in 2020. The continuing trend in digital shopping and the increase of one to two hours of average time spent on social media have created a highly lucrative environment for brands who want to leverage the power of influencer collaborations.

As much as influencer marketing is at its zenith, pricing strategies for influencer collaborations are developing slowly, remain intransparent, and are difficult to standardize.

Should posts be evaluated by engagement rates?

Is it true that the number of influencer followers directly affects the ROI for the company?

These are relevant questions that we can tackle by adopting a market-based influencer price calculator.

Let’s see how a price calculator can encourage price transparency and fair pricing for brands and how brands can use it for their next influencer relationship.

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Why current pricing models used for influencer marketing are arbitrary 

Currently, influencer pricing is like the wild west. Many marketers set a price according to an influencer’s number of followers and their calculated engagement rates, however, a high number of followers does not automatically translate to a higher return on investment for brands.

Macro-influencers with hundreds of thousands of followers are pricey, and many brands fall into the trap of huge paying sums of money because of the perceived popularity of their social media account. However, most small and medium-sized businesses need to attract very specific target audiences, allowing for a more reasonably priced micro-influencers collaboration as a better investment strategy to help create brand awareness. 

TikTok’s algorithm evaluates every piece of content individually, examining metrics such as user interaction, video information, and account settings including localization and language preferences. Because of this algorithm, influencers with a small base of followers can still bring in high engagement rates or even make content go viral. 

There’s another flaw of using pricing strategies based on the number of followers: Prices vary widely across industries. In saturated markets, such as fashion, beauty, and lifestyle, brands should be able to acquire services cheaper than in niche markets such as healthcare or information technology.

In an attempt to solve these problems, companies like #paid have started compiling yearly influencer pricing reports that highlight how prices change year on year. The problem with these reports is that they are quickly outdated, and the sample size is too small only a few hundred influencers are surveyed. 

Basic formulas and historic pricing data are not able to address the differences between social media platforms and changing algorithms. Creators’ prices should be based on market dynamics where they are consistently updated with incoming data. You should pay for your service according to the market you are working with, which differs among niche industries.

How an influencer price calculator works best

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The most accurate influencer price calculator should be based on historic data and current data. Influencers insert their attributes, such as social media platform, number of followers, and industry into the database. Such a calculator calculates the average rate an influencer charges based on their profile attributes. 

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The calculator consistently grows with the number of influencers signing up and entering their prices. This means its data is never outdated and as the sample size grows larger and larger, results become more accurate every time.

Brands can filter the search results by industry, the number of followers, or by the social media platform. The algorithm matches brands with influencers based on interest and shows how much those influencers charge compared to the average market rate.

How businesses can use the calculator for their next influencer relationship

Having a standardized pricing model provides transparency to influencers as well as brands. 

Brands can use the price calculator in three ways:

1.) As a resource for influencer marketing due diligence

2.) As a platform to find influencers within your budget.

3.) As a way to generate a quote when contacting your desired collaborators.

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It allows brands to easily calculate the effect of changing any attribute, such as increasing follower rates or checking price differences on TikTok and Instagram. Brands can set their influencer budget focusing on a niche market or diversifying their collaborations with various social media platforms.

What’s in it for brands in the future?

The information provided to an influencer price calculator can be crowdsourced from the whole user base. The calculator then consistently adds, organizes, and displays this data. 

As such a calculator is becoming more and more sophisticated with every data entry, we can integrate new categories, such as other social media platforms, type of content (series, video, static post), and further specified industry niches.

Brands can take their fate into their hands and reap the benefits of influencer marketing by using a market-driven price calculation. This eliminates the barriers for brands to identify which budget they have to allocate for influencer marketing and which return on investment to expect.

[To share your insights, please write to us at sghosh@martechseries.com]

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