What is the cost of an influencer?

Asking how much an influencer costs is almost like asking how much a house costs. There are so many factors involved that it’s impossible to give a simple answer. Those factors could be:

• What is the performance of the influencer?
• What content should the influencer deliver?
• How many pieces of content should the influencer provide?
• Do we need to pay the person to use their content on other channels?
• And so on…

Despite this, we at Goat, GroupM’s influencer department, have conducted research to address the question posed in the headline.

NEGOTIATION IS ALPHA-OMEGA

We’ve examined the data and prices of over 590 influencers with anywhere from 1,200 followers to 1.2 million followers. And this has led to a number of interesting and important insights.

The overall trend we see is that prices are increasing while performance is decreasing. This highlights the importance of negotiation when booking influencers. When we reach out to influencers about a potential collaboration, we often get a “list price” from their agent, which is the standard price for X piece of content. Like everything we see in society, these list prices have increased – and if we don’t negotiate the price, our campaign expenses will only end up increasing. At Goat, we always negotiate prices and on average we negotiate the list price down 22%.

SAVINGS OF 21%

Let’s take an influencer with 20-50,000 followers on TikTok. On a campaign, we want them to deliver a TikTok video and we would pay an average of DKK 7,642 for the video. With data from our survey, we can negotiate the price by estimating the expected performance of the campaign.  As a starting point, we aim to negotiate the campaign at a CPM of DKK 300, which means that our counteroffer to this example would be DKK 6,000, i.e. a saving of 21%. Though, it is important to note, that there may be factors that justify a higher CPM, e.g. niche profile who’s an expert within the sustainability field.

In Goat, we have a benchmark of DKK 300-600 in CPM. In our study, we saw a wide range in CPM – the lowest CPM was DKK 10.53, while the highest CPM was DKK 9,981. Compared to other media, these are obviously very high CPM prices, but keep in mind that with influencers, a client is not just buying a media, but also a creative production and a personal recommendation.

ENGAGEMENT DOESN’T AFFECT PRICE

In addition to rising prices, our research has led to a lot of other useful insights. Regardless of the size of the influencer, we can see that:

• Instagram Reels have the lowest CPM as well as Instagram Stories when containing more than 3 sequences
• TikTok has the highest engagement
• Instagram Reels perform better than other Instagram posts such as carousel on impressions. Instagram posts perform significantly worse on impressions and the price does not match this. However, they have a significantly higher engagement rate.
• Followers and impressions are correlated on a broad spectrum. This means that when the number of followers increases, we reach more people while the influencers’ prices per follower actually decrease.
• And one surprise was: Engagement does not have a direct impact on price.

As described above, there can be several factors at play when it comes to the price of an influencer. At Goat, we always estimate the expected performance of the influencer and use this in the negotiation. In addition, we can include other factors in the negotiation, such as the match with the brand or a specific content style, which can be weighted higher than impressions.

By being aware of the important factors and having a structured approach to the negotiation, we can better ensure a great campaign for the client, but also a campaign that makes the most of the budget.

If you have any questions or would like to learn more, please do not hesitate to reach out to Christine Matthesen, Influencer Strategy Director at [email protected]