How much is an influencer really worth? Brands and businesses are having a hard time figuring that out, according to new research from software and services marketplace Capterra, which finds that many marketers struggle to determine how to pay for these partnerships because of widely varying influencer rates depending on the individual, their engagement, their number of followers, and other factors. Only half of marketers say they feel confident pricing influencers, and 41 percent believe their company is overpaying influencers.
But according to the firm’s 2023 Influencer Marketing Survey, brands know they value is there
Nearly two-thirds (65 percent) of marketers plan to increase their influencer marketing budgets in the next six months. While most businesses are maintaining or reducing their overall marketing budgets in response to economic headwinds, this increased spend on influencers indicates that marketers view these programs as worthwhile investments.
Influencers themselves have a significant say when establishing a payment method
For example, 90 percent of marketers say it is extremely common for influencers to help determine their company’s payment method. Currently, the most common form of influencer payments is pay per campaign (64 percent).
The second-most common form of payment, pay per performance, is leveraged by 56 percent of marketers. It’s gaining traction as marketers find ways to achieve a clear ROI or promised results, an issue 49 percent cite as their greatest challenge in working with influencers. This method involves compensating influencers using performance-based metrics, such as sales, clicks, and impressions.
“Pay per performance is becoming more popular for a few reasons, notably because businesses with tight marketing budgets may be more comfortable in only paying for specific outcomes in order to avoid wasting money or additional risk,” said Meghan Bazaman, senior marketing analyst at Capterra, in a news release. “On the other hand, it also incentivizes influencers to deliver results. And, tracking performance has become easier for both brands and influencers due to advances in marketing analytics.”
Many marketers are also opting for longer-term influencer partnerships
Nearly half (48 percent) of marketers have set up recurring payments with influencers and 54 percent are currently paying retainers or on a continual basis. Brand ambassador programs also ranked as the most common type of influencer engagement in the survey, further signaling growing popularity for longer partnerships.
To help manage their influencer programs, many marketers have turned to agencies to streamline working relationships with influencers. In fact, 61 percent report that they currently work with an influencer agency or specialist and another 34 percent plan to start using one in the next 12 months.