As influencer marketing continues to grow up, taking in more marketing dollars, smaller influencers are asking for a bigger piece of the pie — sometimes double or trouble the rates they charged back in 2021, ad execs say.
Two or three years ago, when influencer marketing was taking off, the average payout for TikTok micro-influencers (those with followings ranging from 5,000 to 20,000) ranged from $1,000 to $3,000 per post, according to Krishna Subramanian, CEO and co-founder of Captiv8 influencer marketing agency. Today, that figure has increased to range from $3,000 to $5,000.
Mostly, industry experts say the uptick in costs is because influencer marketing has matured, becoming a mainstay in ad budgets. As more advertisers are willing to shell out for influencer content, asking for content usage rights and exclusivity, the more money influencers are asking for.
Agency execs also point to increased pay transparency, in which influencers openly talk about their brand deals, improved tracking and metric tools, and fees for agency representation for influencers of all sizes. Influencers are also more informed about their usage rights, or permissions that influencers grant brands to use their content, per execs.
Influencer partnerships have also evolved beyond social posts to sometimes include asks like event attendance, appearances, brainstorming calls, content usage rights, creating owned content for the brands. “The deals we’re doing today look very different from the ones we were crafting a few years ago, and these types of deals demand more from both parties,” said Bea Iturregui, vp of creator and brand partnerships at creator marketing agency Cycle, in an email.
However, costs for celebrity and macro-influencers (between 100,000 to one million followers) haven’t seen the same upswing in costs, said Nisrin Mazlumovic, U.S. team lead at The Influencer Marketing Factory, an influencer marketing agency. Likely, Mazlumovic said, because influencers with bigger followings have historically charged based on the size of their audience and that has yet to change. The aperture has opened for influencers with 100,000 or fewer followers due to the aforementioned points: increased pay transparency, better measurement tools, usage rights, and the prioritization of engagement rates over follower count.
A growing price hike
All said, influencer marketing has become more of an ecosystem in which activating an influencer costs more than just an agreed-upon rate per post, said Kelly Dye, vp of influencer strategy at Acorn, a part of the digital marketing agency New Engen.
“As creators become more savvy about their business, additional fees are causing many of the increases, such as content rights for the brand, cost of ad access to the influencer’s handle, exclusivity for product category, etc.,” she said in an email. “In the decade-plus, I’ve been in the industry, there have been 10-20% fee jumps year-over-year.”
By the end of this year, U.S. marketers are expected to shell out $7.14 billion on influencer marketing, marking a nearly 16% increase from the $6.16 billion expected last year, according to Goldman Sachs Research. By 2027, that figure could approach half a trillion dollars.
Digital marketing agency TandemTide inked several deals with smaller influencers a few years ago for roughly $1,000 to $3,000 each for a package of a video review and post or two across social channels, said Brandy Alexander-Wimberly, director of client innovation at TandemTide. Now, the agency is getting quotes between $3,000 to $5,000 and beyond for that work, she added.
Loops Beauty says rates have increased for micro-influencers, which they classify as those with between 10,000 to 50,000 social media followers, since 2022. Back then, a social post ran anywhere from $250-$500. By 2023, those figures had hiked to between $500-$1000 per post. This year, a single social post from a micro-influencer could cost $2,500, according to Meg Bedford, CEO of Loops.
“As the landscape continues to evolve, we’re seeing influencers’ rates increase for content in general, and we’re specifically seeing the uptick in TikTok video posts and content usage rights,” Bedford said in an email. She pointed to two factors contributing to the costs: rate transparency amongst influencers and advertiser’s desire for specialized, targeted content, both of which help influencers justify higher rates.
Offsetting costs
Influencer marketing isn’t new. However, its maturation was spurred by the pandemic lockdown as people spent more time online and influencers became a direct line to the audiences that brands were trying to reach. That said, there’s yet to be standardization across the industry for influencer marketing pay scales even as influencers are pushing to standardize their pay, negotiating tighter contract terms and implementing late fees.
“In the past, payment rates were typically determined by the number of followers, but now we see that rates don’t align with any particular formula,” said Olivia Pollock, senior brand director at Evite, a social planning website. Marketers have shifted ROI metrics away from follower count to more focus on engagement to determine how an influencer’s content could perform.
Even as costs go up, spending shows no signs of slowing. To offset rising, and largely ad hoc, pricing in influencer marketing, advertisers are eyeing brand ambassador programs, locking in pricing via longer-term contracts, gifting products in exchange for posting, and repurposing influencer content across paid media, client socials, and more.
For example, Dagger ad agency uses what they call range tiers to negotiate and leverage added value, platform distribution, and other factors, like usage rights and exclusivity to get more bang for their buck, according to Marla Ramirez, senior influencer strategist at Dagger. Meanwhile, Evite opts to work with influencers who provide broad usage rights to the content produced, said Pollock. There’s also more collaboration between brands, where brands are collaborating with others on influencer marketing efforts to expand their reach and find cost savings.
“Yes, the prices are increasing. People are buying it. I haven’t seen yet the decrease in people wanting to invest,” said Rachel Brandt, managing partner and co-founder of Corner Table Creative, a creative agency. “I see more creativity around it, you’re supplementing it in different ways, but there’s a value exchange that we need to seriously consider and think about.”
