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What's a fair amount to pay influencers for promotion? (and a warning)

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ycee

Contributor
Sep 22, 2019
27
32
They all quote abnormally high prices, here's how to assess a fair fee.

A warning to start ⚠️

Never ever pay for posts, especially when you're just starting out. A transactional sentiment reflects in the kind of content that the creator would create for your brand and their audience can smell it.

It's 2022, consumers are smart - so give them the respect they deserve. Don't do paid promos with famous influencers just because they'll generate eyeballs for your brand. These shoutouts are more than likely to be unprofitable.

What you should look for
Alignment comes first.
Before followers, before engagement, and way before payment. You can adapt to the metrics, you can't change how aligned a creator is with your brand. So the first step is to find creators that are aligned with your brand.

Only once you've found creators that are aligned with your brand's ethos, then work around negotiating an incentive structure (which may involve upfront payment).

A rule-of-thumb for fair fee
For every placement,

Pay $100 for every 10,000 followers on Instagram.

Pay $150-$200 for every 10,000 subscribers on Youtube.

Pay $75 for every 10,000 fans on TikTok.

Now, all of this also depends on their engagement rate. If they have 100k followers with a poor engagement rate, then certainly don't pay them $1K for a post.

For the advanced folks out here...

I'm building some software in this space and we use this formula for our the fair-fee calculator in our app:
Fair fee formula.png
Sponsor Rate is the % of sponsored posts they have among the last 10-15 posts on their feed. It's a negative factor as you ideally want to work with creators who are selective with the brands they work with.

Does this help you guys make fairer decisions when working with creators on social media? Let me know if you have questions

Appreciate you reading till the end
 
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lowtek

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First, the positive: you're correct that you should reach out to creators who are aligned with your brand ethos. I can't tell you how many offers to promote crypto / nft fly by night operations I get. I decline each one of them, as there is no congruency. Nothing against crypto, I own some myself, but I'm not goign to feed my audience to the lions.

It's also a smart idea to avoid creators that spend too much time shilling other peoples' products. This dilutes the influence of any one of their recommendations, as the audience just learns to tune it out.

Now, the bad:

You may very well get people to create content at those rates, but only because they don't value their own work.

I'm a YouTuber with 30k subs. If you offered me $600 to create a video, I'd tell you no thanks.

Here's why:

If you were to create YOUR OWN video content to market your product, what would that cost? Content ideation, content creation, video editing, scripting, thumbnails, voice over, animation, paid traffic, etc. ... you mean to tell me you can get all that done for $600? Maybe, if you're using the bottom of the barrel outsourced labor.

Not to mention the risk to the content creator in putting their name on the line for a brand they have no control over, as well as the opportunity cost in creating their own original products that would (potentially) produce far more in lifetime value than a single one time payment of a few hundred dollars. Even dangling the potential for an affiliate offer isn't really that great, as again the customer has limited funds. I'd rather they spend their limited funds on my product, rather than yours.

Content creators aren't asking too much, you're just trying to create one sided agreements that only really benefit you. In other words, your payment structure is anything but fair.
 

Pink Sheep

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First, the positive: you're correct that you should reach out to creators who are aligned with your brand ethos. I can't tell you how many offers to promote crypto / nft fly by night operations I get. I decline each one of them, as there is no congruency. Nothing against crypto, I own some myself, but I'm not goign to feed my audience to the lions.

It's also a smart idea to avoid creators that spend too much time shilling other peoples' products. This dilutes the influence of any one of their recommendations, as the audience just learns to tune it out.

Now, the bad:

You may very well get people to create content at those rates, but only because they don't value their own work.

I'm a YouTuber with 30k subs. If you offered me $600 to create a video, I'd tell you no thanks.

Here's why:

If you were to create YOUR OWN video content to market your product, what would that cost? Content ideation, content creation, video editing, scripting, thumbnails, voice over, animation, paid traffic, etc. ... you mean to tell me you can get all that done for $600? Maybe, if you're using the bottom of the barrel outsourced labor.

Not to mention the risk to the content creator in putting their name on the line for a brand they have no control over, as well as the opportunity cost in creating their own original products that would (potentially) produce far more in lifetime value than a single one time payment of a few hundred dollars. Even dangling the potential for an affiliate offer isn't really that great, as again the customer has limited funds. I'd rather they spend their limited funds on my product, rather than yours.

Content creators aren't asking too much, you're just trying to create one sided agreements that only really benefit you. In other words, your payment structure is anything but fair.
Most youtuber spots are them talkng for up to a minute into the camera. 600 sounds pretty good for 20 minutes of work (providing script is sent), especially when 30k subs isn't going to bring a wild amount of traffic
 

Hong_Kong

Contributor
Apr 7, 2022
59
74
They all quote abnormally high prices, here's how to assess a fair fee.

A warning to start ⚠️

Never ever pay for posts, especially when you're just starting out. A transactional sentiment reflects in the kind of content that the creator would create for your brand and their audience can smell it.

It's 2022, consumers are smart - so give them the respect they deserve. Don't do paid promos with famous influencers just because they'll generate eyeballs for your brand. These shoutouts are more than likely to be unprofitable.

What you should look for
Alignment comes first.
Before followers, before engagement, and way before payment. You can adapt to the metrics, you can't change how aligned a creator is with your brand. So the first step is to find creators that are aligned with your brand.

Only once you've found creators that are aligned with your brand's ethos, then work around negotiating an incentive structure (which may involve upfront payment).

A rule-of-thumb for fair fee
For every placement,

Pay $100 for every 10,000 followers on Instagram.

Pay $150-$200 for every 10,000 subscribers on Youtube.

Pay $75 for every 10,000 fans on TikTok.

Now, all of this also depends on their engagement rate. If they have 100k followers with a poor engagement rate, then certainly don't pay them $1K for a post.

For the advanced folks out here...

I'm building some software in this space and we use this formula for our the fair-fee calculator in our app:
View attachment 43381
Sponsor Rate is the % of sponsored posts they have among the last 10-15 posts on their feed. It's a negative factor as you ideally want to work with creators who are selective with the brands they work with.

Does this help you guys make fairer decisions when working with creators on social media? Let me know if you have questions

Appreciate you reading till the end
Very interesting. I'm not sure how effective this would be.
 
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ycee

Contributor
Sep 22, 2019
27
32
First, the positive: you're correct that you should reach out to creators who are aligned with your brand ethos. I can't tell you how many offers to promote crypto / nft fly by night operations I get. I decline each one of them, as there is no congruency. Nothing against crypto, I own some myself, but I'm not goign to feed my audience to the lions.

It's also a smart idea to avoid creators that spend too much time shilling other peoples' products. This dilutes the influence of any one of their recommendations, as the audience just learns to tune it out.

Now, the bad:

You may very well get people to create content at those rates, but only because they don't value their own work.

I'm a YouTuber with 30k subs. If you offered me $600 to create a video, I'd tell you no thanks.

Here's why:

If you were to create YOUR OWN video content to market your product, what would that cost? Content ideation, content creation, video editing, scripting, thumbnails, voice over, animation, paid traffic, etc. ... you mean to tell me you can get all that done for $600? Maybe, if you're using the bottom of the barrel outsourced labor.

Not to mention the risk to the content creator in putting their name on the line for a brand they have no control over, as well as the opportunity cost in creating their own original products that would (potentially) produce far more in lifetime value than a single one time payment of a few hundred dollars. Even dangling the potential for an affiliate offer isn't really that great, as again the customer has limited funds. I'd rather they spend their limited funds on my product, rather than yours.

Content creators aren't asking too much, you're just trying to create one sided agreements that only really benefit you. In other words, your payment structure is anything but fair.
This entire theory falls flat on it's face when brands work with creators truly have alignment with their philosophy.

Creators who'd try to milk a brand for $$ regardless of results will never be fair for the brand (and is a long-term terrible strategy for the creator)

I've worked with creators with >1M subscribers who slashed their fixed rates by more than 60% for the potential commission-driven upside and ended up netting >200% of what their quoted fees were lol. It works when there's alignment.

And yes, taking a small fee to cover basic costs and doing mostly commissions is way easier than launching a product of your own. "Opportunity cost" is not an argument. Creators can do both.
 

Kevin88660

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They all quote abnormally high prices, here's how to assess a fair fee.

A warning to start ⚠️

Never ever pay for posts, especially when you're just starting out. A transactional sentiment reflects in the kind of content that the creator would create for your brand and their audience can smell it.

It's 2022, consumers are smart - so give them the respect they deserve. Don't do paid promos with famous influencers just because they'll generate eyeballs for your brand. These shoutouts are more than likely to be unprofitable.

What you should look for
Alignment comes first.
Before followers, before engagement, and way before payment. You can adapt to the metrics, you can't change how aligned a creator is with your brand. So the first step is to find creators that are aligned with your brand.

Only once you've found creators that are aligned with your brand's ethos, then work around negotiating an incentive structure (which may involve upfront payment).

A rule-of-thumb for fair fee
For every placement,

Pay $100 for every 10,000 followers on Instagram.

Pay $150-$200 for every 10,000 subscribers on Youtube.

Pay $75 for every 10,000 fans on TikTok.

Now, all of this also depends on their engagement rate. If they have 100k followers with a poor engagement rate, then certainly don't pay them $1K for a post.

For the advanced folks out here...

I'm building some software in this space and we use this formula for our the fair-fee calculator in our app:
View attachment 43381
Sponsor Rate is the % of sponsored posts they have among the last 10-15 posts on their feed. It's a negative factor as you ideally want to work with creators who are selective with the brands they work with.

Does this help you guys make fairer decisions when working with creators on social media? Let me know if you have questions

Appreciate you reading till the end
The better your reputation of perceived value, the lower we (creators) could charge.

No creator wants to push shitty products at the detriment of their own reputation.

The best is that you could allow the creator to test or sample the products and develop trust.
 

ycee

Contributor
Sep 22, 2019
27
32
The better your reputation of perceived value, the lower we (creators) could charge.

No creator wants to push shitty products at the detriment of their own reputation.

The best is that you could allow the creator to test or sample the products and develop trust.
Yeah! That's the best. Send free product and see if they like it.
 
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Fox

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Pay $150-$200 for every 10,000 subscribers on Youtube.

@lowtek covered it perfectly above.
This type of formula makes no sense.

- A "football fan videos" channel might have 5 million subs.
- A "how to invest" channel might have 5k subs.

But the second channel's viewers are worth 100x more.

Any good channel will not have a sponsor for $200 per 10,000 subscribers.
They can just make their own product and get way more revenue.

Can it be done? Ya, I am sure it can.
But are you getting a proper audience at those rates? No way.
 

ycee

Contributor
Sep 22, 2019
27
32
@lowtek covered it perfectly above.
This type of formula makes no sense.

- A "football fan videos" channel might have 5 million subs.
- A "how to invest" channel might have 5k subs.

But the second channel's viewers are worth 100x more.

Any good channel will not have a sponsor for $200 per 10,000 subscribers.
They can just make their own product and get way more revenue.

Can it be done? Ya, I am sure it can.
But are you getting a proper audience at those rates? No way.
This sounds good in theory but is incorrect based on my experience. You're comparing apples to pineapples.

A football fan channel with 5M subs if you're selling football gear? Invaluable, and its audience is worth 100x more than the investment channel's audience. It's about alignment first like I mentioned in my post.

Once you're aligned with the creator, that's when the formula kicks in. At 5M subs the channel would have a lower than normal engagement rate, which is what would help the "Football gear inc" company make a fair assessment of how much they should pay the creator of the channel.

Also the whole "they can just create own product and make more revenue" argument makes no sense as there's upfront costs and a diverse set of skills that are needed to create a useful product of their own (skills that go beyond content creation). I don't think they can wake up one morning and just create a product of their own. It's like saying a junior developer at a Fintech can make 100x more money if he just creates his own product and ditches the salary. We can debate the specifics of the formula (I'm sure there's room for improvement) but this argument is nonsensical.
 

Lex DeVille

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I'm building some software in this space and we use this formula for our the fair-fee calculator in our app:
Fair fee formula.png

Sponsor Rate is the % of sponsored posts they have among the last 10-15 posts on their feed. It's a negative factor as you ideally want to work with creators who are selective with the brands they work with.

Can you share your credibility in this space? Without that, this thread comes across like every other spam marketing post.

I've worked with creators with >1M subscribers who slashed their fixed rates by more than 60% for the potential commission-driven upside and ended up netting >200% of what their quoted fees were lol. It works when there's alignment.

Please share actual numbers. Not vague percentages.

as there's upfront costs and a diverse set of skills that are needed to create a useful product of their own (skills that go beyond content creation). I don't think they can wake up one morning and just create a product of their own.

I can announce a high-ticket group coaching program right now and make $10,000 to $50,000+ today without any pre-existing materials. Most influencers have diverse skill sets. That's why people follow them.

This sounds good in theory but is incorrect based on my experience.

which is what would help the "Football gear inc" company make a fair assessment of how much they should pay the creator of the channel.

You are the one speaking in theory. A company can make "fair" assessments all it wants. With the exception of low-value influencers who seek partnerships on third-party sites to make a quick buck... the influencer has all of the power in the world to demand whatever price they want. If a company doesn't want to pay it, no problem. Another company will.
 
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Lex DeVille

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If someone wants a high-value, low-cost way to leverage influencers... get on a relevant livestream, donate $100 in super chat, and watch the world F*cking explode around you, including getting the attention of the influencer.
 

ycee

Contributor
Sep 22, 2019
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If someone wants a high-value, low-cost way to leverage influencers... get on a relevant livestream, donate $100 in super chat, and watch the world F*cking explode around you, including getting the attention of the influencer.
Good idea. Not a way to create a sustainable growth channel though.

Can you share your credibility in this space? Without that, this thread comes across like every other spam marketing post.
Happy to. Generated over $300K in ambassador-driven revenue for consumer-facing brands. Working with a couple more as we speak, know the space in-and-out so building software for ecom brands looking at influencers.

I can announce a high-ticket group coaching program right now and make $10,000 to $50,000+ today without any pre-existing materials. Most influencers have diverse skill sets. That's why people follow them.
Good for you! You also have a lot of credibility apart from just being an influencer, I've been following your posts. I reckon you as the exception, not the norm. Pick any 15k follower Instagram influencer and you can't say the same about most of them.
You are the one speaking in theory. A company can make "fair" assessments all it wants. With the exception of low-value influencers who seek partnerships on third-party sites to make a quick buck... the influencer has all of the power in the world to demand whatever price they want. If a company doesn't want to pay it, no problem. Another company will.
This is not true at all, have you reached out to creators on behalf of brands at all or is this just assumption?

Creators do have all the power in the world to demand whatever price they want, and so do brands. You're saying it's a free market, and any company can buy at above-market. The formula is meant to calculate fair market rate. It's an approximation. It's just like the P/E multiple. It'll tell you if a shares are overpriced or underpriced and it's on you to take the decision on whether to buy - it's the same for creator prices and brands.

That aside, yes there are scummy bottom of the barrel "duckface influencers" who would shill any product for money. There are also (majority) legit creators who are popular in a niche and would love to promote brands that are aligned with their audience. Thomas Frank is a productivity influencer who is a Notion ambassador and promotes Notion like crazy simply because it's a useful tool that helps him and his audience.
Can he make $500k tomorrow if he chooses to launch a mastermind community? Yes.
Does he have to? No.
Is he happy promoting Notion as it's so good? Yes.

And Notion probably only pays him affiliate commissions based on their ambassador agreement, not $50k for a video shoutout.

I wonder why you think only only bottom of barrel influencers would share products for commissions and all "good" influencers would rather over charge for their shoutout? This is absolutely not true. There's thousands of examples like Thomas Frank who prove otherwise.
 

Lex DeVille

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I wonder why you think only only bottom of barrel influencers would share products for commissions and all "good" influencers would rather over charge for their shoutout? This is absolutely not true. There's thousands of examples like Thomas Frank who prove otherwise.
Is that what I think? Thanks for letting me know.
 
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This sounds good in theory but is incorrect based on my experience. You're comparing apples to pineapples.

A football fan channel with 5M subs if you're selling football gear? Invaluable, and its audience is worth 100x more than the investment channel's audience. It's about alignment first like I mentioned in my post.

Once you're aligned with the creator, that's when the formula kicks in. At 5M subs the channel would have a lower than normal engagement rate, which is what would help the "Football gear inc" company make a fair assessment of how much they should pay the creator of the channel.

Also the whole "they can just create own product and make more revenue" argument makes no sense as there's upfront costs and a diverse set of skills that are needed to create a useful product of their own (skills that go beyond content creation). I don't think they can wake up one morning and just create a product of their own. It's like saying a junior developer at a Fintech can make 100x more money if he just creates his own product and ditches the salary. We can debate the specifics of the formula (I'm sure there's room for improvement) but this argument is nonsensical.

- Using followers as the metric is a bad move in any scenario, its views that matter

- You seem to be focused on the overall numbers when quality is for sure a massive factor
That's why youtube has much different rates for ads on different types of channels/content.

For example, investment style channels have one of the highest ads costs on YT. It's why I used that example.
That's for a reason - those viewers are worth a lot more than someone watching sports clips.
That same concept directly applies to sponsorship.

- It isn't that hard to monetise your own YT channel.
There are a dozen different ways to do it rather than sponsorship.

I get you want to build software for this but as a creator, I don't see why I would need this.
I am not trying to sound harsh but rather give feedback - what's the big need for this?
 

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Can you give an example of this formula actually being used on a well-known channel?

Like, map out the channel stats plus show the actual dollar amount of sponsorship you think is right.
 

Hong_Kong

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Apr 7, 2022
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I agree with the other posts. It feels like you just wrote a simple equation, and now you want to sell it as a product. I don't think the equation would be accurate, and I also think its not really solving a real world problem.

Its more of a solution in search of a problem.

Additionally, there isn't enough variables for that equation to be accurate. Like it was mentioned above the value of each visitor really varries based on niche which wasn't included in your formula.
 
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CarlosRamos

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Here's why:

If you were to create YOUR OWN video content to market your product, what would that cost? Content ideation, content creation, video editing, scripting, thumbnails, voice over, animation, paid traffic, etc. ... you mean to tell me you can get all that done for $600? Maybe, if you're using the bottom of the barrel outsourced labor.

Not to mention the risk to the content creator in putting their name on the line for a brand they have no control over, as well as the opportunity cost in creating their own original products that would (potentially) produce far more in lifetime value than a single one time payment of a few hundred dollars. Even dangling the potential for an affiliate offer isn't really that great, as again the customer has limited funds. I'd rather they spend their limited funds on my product, rather than yours.

I couldn't agree more with you. This is known as the influencer myth. First things have to grow big enough, then influencers will adopt it to get a boost by adopting it.

What makes things grow are well-established friendship networks. Try to involve your trusted social network, not social media stars.
 

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