Influencer Marketing
One of the many advantages of today’s digital landscape is that it challenges the way we create and share value. And amidst continuing development in the world of business and marketing, transparency has always been highly valued.
One of the most commonly seen examples of this is when influencers would explicitly state when their content is sponsored. Influencers would also note if they are only sharing a product organically—without any tied sponsorships.
Recently, the trend of transparency is more focused on influencer rates. This has its own set of implications for both influencers and businesses.
Why Influencers are Sharing Their Rates
It’s understandable that influencer rates are not the same for everyone. The following factors affect influencer rates:
- The size of their social media following
- Their engagement rate
- Access to a niche audience
- Type of content produced
- Platform
- Usage rights
- Post exclusivity
- Seasonal demand
Though the above factors are effective as general guidelines, there are nuances that present dilemmas for businesses and new influencers.
One example is that though a larger following usually commands higher rates, some nano influencers can be considered exceptions. Nano influencers (those with 1,000 to 9,000 followers) are known to have strong follower loyalty and higher engagement rates. In this example, the factors are conflicting with regard to determining the best pay rate for the influencer.
The confusion regarding the “right influencer rates” created a gap. This motivated experienced influencers to be transparent about how they make a living and what their rates are. One example of this is with foodie influencer, @tiffycooks.
Becoming a content creator is not an easy task, and @tiffycooks is not an exception to the rule. As a recipe creator first and foremost, she knows how difficult it is to break into the industry, but also how rewarding it can be; which is why she has always been so forthcoming with exactly how she did it. Now earning five figures a month, she is a leader when it comes to rate transparency and the monetization of influencer marketing.
It is important to understand that within the ecosystem of influencers, there are opportunities to create value amongst each other. This is why some influencers seek to educate and inspire other influencers. So rather than just one-off posts here and there, there is a thriving conversation on charging the right rates.
Aside from established influencers speaking up, posts also come from creators dedicated to influencer success, wealth coaching, digital entrepreneurship, and so on.
On Instagram and TikTok, there are numerous posts with phrases like “Charge your worth!” or “Know your worth and charge it!” To date, #chargeyourworth has over 10,300 posts on Instagram. Meanwhile, the same hashtag has over 7.4M views on TikTok.
The Implications of Influencer Rate Transparency
For Influencers
Influencer rate transparency is beneficial for influencers because they get a better baseline of rates. This information is particularly useful for up-and-coming influencers, BIPOC creators, and women who are still establishing their rate cards and may charge less than their male counterparts. This is the main benefit of an ecosystem wherein motivating, inspiring, and educating each other is encouraged.
One of the possible pitfalls of this, however, is if influencers simply mimic rates from other influencers—without adding a strong enough context or rationale behind their change in rates—this can strain potential or current relationships with businesses.
For Businesses & Marketers
Spending on influencer marketing is projected to be around $4.6 billion per year. This is collective because of rising influencer rates and because competition is rising. Forbes predicts that all companies will soon have an influencer strategy.
Numerous industry leaders attribute the rising influencer rates to increased transparency on the subject. This would eventually translate to higher budgets required for influencer marketing campaigns.
Businesses and marketers need to adapt to this situation by offering better value to influencers and knowing how to set their businesses apart. This does not necessarily mean your business will need to shell out the highest pay.
Just like everyone, influencers will prefer to connect with a business they like, know, and trust. Showing genuine respect, fostering trust, and ensuring an alignment in values with the chosen influencer can go a long way.
Expressing a desire for a long-term collaboration is also beneficial. For some influencers, their rates are packaged which means a long-term campaign with them could be worth exploring.
But as with anything, the price of influencer marketing today will not be the price of it tomorrow.
The Way Forward: Beyond Influencer Marketing
The need for transparency is not confined to influencer rates. In fact, all industries are pushing for more salary transparency. The 2022 Compensation and Culture Report states that transparency regarding pay rates is becoming increasingly important to employees.
Moving forward, salary transparency is the first step to narrowing the pay gap between men and women, as well as bringing pay equality to BIPOC (Black, Indigenous, and People of Colour) employees, and content creators.
