Influencer Marketing: How to Determine Rates for Your E-Commerce Brand in 2022
The popularity of influencer marketing has skyrocketed over the past couple of years. Experts project by the end of 2022, the influencer marketing industry will reach $16.4 billion.
It makes sense why influencer marketing has seen such significant growth. Short-form videos across social platforms have become wildly popular, the Creator Economy blossomed in the past two years to the tune of a $104.2 billion market size, and consumers started actively participating in social shopping.
Not to mention, these new creators have built niche and highly loyal fandoms, and heavily influence their followers’ purchasing decisions.
Simply put: the influencer marketing industry has changed significantly in the past few years. As a result, 76% of marketers plan to increase their influencer marketing budget in 2022.
While more marketers are investing in influencer marketing, not every brand has millions of dollars to pour into hiring mega-influencers.
Here’s the good news—you don’t have to have a huge budget to start with influencer marketing. You can experience success by starting with nano-influencers and growing from there.
In this article, we’ll cover the different types of influencers, what influencers are best to partner with, and the average going rates for influencers.
Types of Social Media Influencers
1. Nano-Influencers (1K-10K followers)
Nano-influencers may have a humble follower count (fewer than 10K), but they also have the highest level of average engagement rates (4%) – according to the Later & Fohr 2021 report. Their audiences are extremely involved and loyal, and often take what influencers say as gospel.
Today, the market rate for nano-influencers is approximately $5-$25 for a TikTok post, $10-$100 for an Instagram post, and $20-$200 for a YouTube video.
2. Micro-Influencers (10K-50K followers)
TikTok’s micro-influencers can raise brand awareness, thanks to their 17.96% engagement rate on the platform. On other mediums, they have engagement rates of 3.86% (Instagram) and 1.63% (YouTube).
With a follower count between 10K and 50K, micro-influencers are also the most common type of influencer.
Their market rates are $25-$125 for a TikTok post, $100-$500 for an Instagram post, and $200-$1,000 for YouTube.
3. Mid-Tier Influencers (50K-500K followers)
Mid-tier influencers are at a sweet spot, where they provide a high engagement rate and exposure for your product/service. Although the engagement rates vary depending on the niche they’re in, reports show their average is around 2.58%.
Mid-tier influencers charge around $125-$1,250 for a TikTok post, $500-$5,000 for an Instagram post, and $1,000-$10,000 for a YouTube video.
4. Macro-Influencers (500K-1M followers)
With a massive following between 500K and 1M people, these are the influencers you may already know. They come with a reach of 10.1% (of their total followers) and a 1.3% engagement rate.
Rates may vary according to the specific influencer marketing agency that represents the creator, but here are the averages for macro-influencers: $1,250-$2,500 for a TikTok post, $5,000-$10,000 for an Instagram post, and $10,000-$20,000 for a YouTube video.
5. Mega-Influencers (1M+ followers)
Mega-influencers have the highest follower counts with celebrity status. Their engagement rates hover around 1.5-1.6%.
Depending on the influencer marketing strategy you create, mega-influences can charge around $2,500+ for a TikTok post, $10,000+ for an Instagram post, and $20,000+ for a YouTube video.
The Best Influencer for Your E-Commerce Business
Each type of influencer can be crucial, depending on your stage of business development. For example, nano-influencers are great if you want to test-launch a product to see audience reviews. Macro-influencers, on the other hand, can help build brand reputation after you’ve already established a foothold.
Think of an influencer who speaks the values your brand believes in, who would possibly use your brand’s products, who aligns with your product niche, and who your customers would listen to. Based on these factors (plus recognizing which stage your business is in), you can decide which level of influencer to target.
Determining Rates for Your Influencer Marketing Strategy
Engagement rates and reach efficiency rates are the two biggest factors when determining how much an influencer’s work is worth.
Here’s how to calculate an engagement rate:
Engagement rate = (Total engagements on a post / Total followers) x 100
Reach efficiency rate = (Average reach / Total followers) x 100
A few important influencer marketing tips to keep in mind:
- If your goal is to get a high ROI on influencer marketing, focus on a TikTok strategy since the platform’s influencer network boasts high engagement rates
- When developing an influencer marketing strategy, always determine an end goal, plus a strategy for measuring if you’ve reached it. It’s not efficient or beneficial to do influencer marketing just for the sake of doing influencer marketing
An Expert’s Take On Pricing
Jessie Jacobson, a TikTok influencer with over 1M+ followers shares her thoughts on how some brands pay influencers.
“Some brands like to pay creators with an actual formula such as: The engagement rate/post + extra factors = your total rate. Extra factors would include things like social and digital rights to the content for a period of time, the generation of an authorization code for ads, posting to your story, creating a carousel, using brand-specific hashtags, and more. Another way brands connect with creators is through the standardized formula: $100 per 10k followers + extra factors = your total rate,” said Jessie.
Jessie recommends brands develop long-term partnerships with creators. She said, “I always suggest a longer-term partnership negotiated at a set price with extra factors included in the final price. Rather than agreeing to one video where the creator posts on their profile and the brand repurposes it as they please (as per the guidelines agreed upon), it can be more beneficial for a brand to get a creator to agree to a number of videos and create a series.”
Jessie also offered insight into how brands can hire creators directly through TikTok.
“The TikTok Creator Marketplace has direct applications. Brands can reach out to creators directly and get them to work with you on a campaign at a set price. It also has open applications, which are my personal favorite. You can create a campaign, set a price and creators can apply freely, where you can then generate ads authorization codes and creative guidelines strictly within the marketplace. It’s a game-changer,” Jessie said.
Get Started with Influencer Marketing
Influencer marketing has many variables, so it can be difficult to decide which level of influencer is best for your brand. Even more difficult is constructing an influencer marketing strategy that gets you a high ROI.
We understand your struggles and we’re here to help. If you wish to develop an influencer marketing strategy that directly addresses your customers (and delivers results), get in touch with us.