Influencer Marketing Inflation - How to deal with it

As the creator economy grows and more people become aware of their ability to make money from Instagram, brands are finding themselves paying more for sponsored posts and campaigns.

In 2014, the average price for Instagram posts by creators was about $134 per post. By 2019, that number had jumped to $1643 per post — a 12.3x increase! 😲

The same trend is happening across all social media platforms and types of influencers (from YouTube celebrities to Instagram stars). That’s why it’s more important than ever before to think carefully before choosing an influencer campaign partner — they could be costing your company thousands more than they used to!

Here are some ways you can keep your influencer marketing costs under control:

1. Skirt the Agents

You can hire an agent — which is what many brands do — or you can reach out directly to the influencer to see if they’re interested in partnering with you. But what if you want to save some money? 💸

The answer is simple: Skirt the agents and go direct.

The agent landscape has changed dramatically in recent years as more brands are finding success in going direct with influencers and skipping the middleman.

The reason is simple: Influencer prices are skyrocketing, meaning that agencies are charging hefty fees just to make introductions between brands and talent.

Agencies usually work on a commission basis, according to research that interviewed a network of marketers on LinkedIn. The first half of the participants believe that these agencies charge 20%, whereas the other half think that they charge more than 20%.

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In the same study, an expert who has worked with influencer agencies said they tend to charge 50-60% of their customers’ ad budgets. Another person mentioned that a large Sweden-based agency had an internal goal of charging as much as 75% of their customers’ budgets. 😵

But if you want to avoid paying an agency altogether, here's how:

• Hire an assistant who knows how to reach out and negotiate deals with influencers directly (or learn yourself!)

• Use social media search tools like BuzzSumo to find influencers who have talked about similar topics in the past.

• Use a service like SARAL to shortcut the work and automate your process of finding and reaching out to influencers. The platform connects brands with talent and takes care of all the negotiations for you — including finding talent based on your industry, tracking engagement, negotiating payment terms, building a relationship with them, and more.

2. Get Referrals

When you're looking for influencers, one of the best ways to find them is by asking your friends.

The challenge with this approach is that it's hard to know who has influence and who doesn't. But it's also one of the most effective ways to find great influencers for your brand.

By reaching out to a content creator through a referral, you can get access to highly sought-after talent without having to pay the premium prices they charge clients outside their circles.

There are two main ways you can get referrals:

• Ask your customers and clients who they think would be a good fit for your brand. This can be done via email or social media. However, in both cases, it needs to be done in a way that encourages people to respond without feeling obligated to do so (i.e., don't put "Reply if you know any good influencers" or something similar).

• Ask other brands whose products or services are similar to yours (but not competitive) and ask them to refer you to some creators. This gives you a list of names that you can reach out to directly and ask if they'd like to take part in your campaign, or, better, direct intros!

You can also post on forums asking for recommendations on popular bloggers or content creators relevant to your brand, company, or product category. If there's enough demand in your industry, someone will know who should be approached.

Sometimes, we’ve seen tweets work wonders!

3. Leverage Your Customer List

If you’re looking for an alternative way to promote your brand without breaking the bank, consider leveraging word of mouth from your existing customers as brand ambassadors instead of buying sponsored posts from influencers.

After all, your customers already know about you and agree with your mission – making it the easiest to convince them to promote your products!

Yes, yes – there’s data too!

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Casper, a DTC mattress company, is an example of a company that was able to sell $20 million in its first ten months with little advertising and just word-of-mouth.

The company's social media strategy was designed not only to engage its audience but also to generate sales. It included articles about sleep, quick response times, and gifting events. Moreover, it offered the best quality products that worked together with those elements to make customers share its products willingly and organically.

The first thing you should know is that you don't have to limit your campaign to just one person — or even two or three people.

Instead, you can take advantage of your customer list—especially if you have over 1000 people on your list—and use some of those people's smaller followings to gain the word-of-mouth power that all businesses crave.

The next thing you should know is that your customer list is probably full of potential influencers (especially nano-influencers with below 10k followers) who are the most influential.

But how do you get them to talk about your brand?

Here are some tips for leveraging your customers for word of mouth:

• Use email flows to engage your customers and ask them to share their stories.

• Create contests where they can win prizes if they get others to join in on the conversation.

• Launch an ambassador program and invite them to become an ambassador for your brand by doing some tasks such as posting pictures of their products and tagging you on social media platforms, writing reviews and sharing them on their own accounts, or creating content (videos, photos, etc.). You can also offer them a discount or free products in exchange for their work.

• Set up a referral program where existing customers get incentives when they refer new customers to sign up on your platform. You can also offer discounts or freebies to existing customers who refer new ones to join the platform.

• Run hashtag contests and ask them to share photos on social media with a specific hashtag (like #mypixeldiary). This will help you find more people like them who love your brand just as much as they do.

You can also encourage customers to make unboxing videos by offering incentives in return.

For instance, in an unboxing video of the product FabFitFun, CruiseGear Channel's Sheri Griffiths shares how customers get customized products depending on their subscription.

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The video also shows how FabFitFun provides add-ons with freebies and gift certificates from varied brands. This is a great way to familiarize customers with the product, and it makes it even more believable since it comes from another customer who is just like them.

4. Attend Influencer Marketing Events

This is probably the easiest way to meet influencers. All you need to do is attend relevant events and speak to them.

Not only does it put you in front of your target audience and allow you to connect with influencers, but it also gives you insight into what's hot in the marketplace.

There are several events where you can network with content creators in your niche. For instance, Youth Marketing Strategy is a major youth marketing festival in America that focuses on how brands can reach Gen-Z better.

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Events like this offer an opportunity to meet potential influencers face-to-face. Not only does this give you an opportunity to build relationships with these people in person (and maybe even find a few diamonds in the rough), but it also gives you insight into what they're looking for in terms of compensation.

Don't be afraid to reach out beforehand, either — many creators will be happy to connect with you before their event so they can learn more about your company and make recommendations for how they can help promote your brand once they meet in person at the event itself.

You may not be able to work with them immediately, but you can get to know them better and build a relationship over time.

💡 Pro Tip: Organize an event specifically for influencers so they can meet each other and learn more about your brand. The key here is to make sure that everyone who attends gets something out of it – whether it's networking opportunities or exclusive offers.

5. Read Their Books And Subscribe to Their Newsletter

If you want to stay ahead of the curve and avoid paying inflated prices, I would recommend reading some of their books and subscribing to their newsletters

You're probably asking yourself: how does that help me?

Well, influencers like to write about themselves and their experiences, so their books or newsletters will give you a peek into how much they charge for different types of campaigns and what sort of budgets they're used to working with.

This information might come in handy in order to negotiate with them effectively.

Also, they tend to include some advice on how to work with them in their books – this can be incredibly useful because it gives you a sense of the way they work and what sort of expectations they have from brands.

The best part is that they’re more likely to respond to you if you mention something specific from their book, blog, or newsletter. So going “deeper” before you reach out always makes sense.

6. Work With Them on Their Secondary Social Media Channel

What if you can't afford to pay that price? What if you're just starting out and need to build your brand? Or what if you've been in business for a while but are just starting to think of influencer marketing as a viable channel for your business?

You have options. And one of those options is using secondary social media channels to deal with influencer pricing going up.

No doubt, Instagram is the preferred social media channel for influencers and brands that incorporate Influencer Marketing in their business strategy.

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However, influencers usually have secondary channels where they try to create a real connection with their audience while providing value.

For example, on average, micro-influencers charge about $25-$125 per post on TikTok. That’s a drastic difference from the $100-$500 per post that they’ll charge for Instagram.

So if your target audience is present on both platforms and you’re just starting out and want to build an audience quickly, it makes sense to pay for a creator to post on TikTok for your brand.

For example, Karen Camargo is a beauty micro-influencer from Chicago famous for her makeup videos on Instagram. She has more than 40K followers there, but she also uses her TikTok handle to engage with her viewers.

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While saving money is the most obvious benefit of working with a content creator on his or her secondary account, there are other benefits as well.

If you follow an influencer’s secondary account, you will have a better chance of getting a response – since the followers are fewer and people trying to reach out to them via their secondary account will be fewer too.

7. Negotiate a Base + Bonus Incentive Structure

The influencer market is becoming more competitive – but you can still find good influencers at affordable rates.

The key is to negotiate a base + bonus structure that allows you to pay less for each post but make up for it by offering a higher bonus for every sales or engagement goal reached.

For example, if your campaign calls for ten posts, you could negotiate with your influencer to pay $100 per post and then give them an additional $25 bonus if you gain 1k followers on your social media. Or better yet, pay a base amount for posts and then a % commission on generating sales.

This helps the creator generate infinite upside on their income. We’ve seen instances where the commissions overtake their initial upfront ask. So it’s a win-win!

This gives you room to pay less per post while still incentivizing the creator if they help you achieve your goals.

It's Time to Put These Tips Into Action!

The sad news is that influencer pricing is only going up.

The good news? There are plenty of ways to save costs on influencer marketing. Just don’t be lazy about it--take the time to sort through potential influencers and find the best match for your brand.

And once your influencer marketing starts working in your favor, it might be time to invest in building long-term relationships with particular creators.

Sign up for our “No BS” Influence Marketing Letter below to get more insights like this every week.

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