Negotiating The Best Deals With Influencers – The Ultimate Influencer Pricing Formula!

If it’s true that celebrity Selena Gomez earns 550,000 Dollars per Instagram post and beauty influencer Huda Kattan demands 18,000, influencer marketing must be a costly business for companies, wouldn’t it? Even though different factors impact the pricing of influencers, we are asked “How much shall I pay exactly?” ever so often. So here it is, the ultimate influencer pricing formula!

There are hard factors as well as soft factors that impact influencer pricing. While the hard factors are defined by precise numbers, the soft factors have to be evaluated for each individual case.

Soft Factors

Brand Fit & Authenticity

This factor itself includes the brand environment of an influencer. A high-class fashion brand should aim for influencers who position themselves in a high-class brand environment instead of working with low-price brands. A good brand fit supports the authenticity of an influencer which reflects on the promoted brand as well.

Similar to the brand environment, the engaged influencers are an aspect that impacts this soft factor. If a fashion influencer surrounds herself with other successful influencers with a great reputation in this sector, the value of the influencer will increase and so will her worth for brands.

Content Quality

The content quality is another soft factor and has to be evaluated for each case individually. It all comes down to how valuable a content piece is for the brand.

Influencer Pricing Formula Content QualityContent pieces of @fashiioncarpet

If a campaign mainly focuses on the reach of influencers, the content quality might be a secondary factor. Thus, the value of a content piece for a brand depends on the campaign objectives.

Hard Factors

Media Value Per Post

The media value per post is an indicator of how valuable the activities of an Instagram channel are. This metric is calculated with the help of Instagram’s CPM of approximately 5$.

Audience Quality

The better the audience, the better the influencer! An active and engaged audience is essential for influencers and influencer marketing campaigns. There is no point in creating content for dead-end users and companies would not want to pay for inactive followers who do not even see the campaign posts in their feeds, let alone express interest in the brand or the products displayed.

Target Group Accuracy

An active and engaged audience is great, but it is completely useless if it is not the right audience. Target group accuracy is key! For brands, it is important to reach those users who live in the countries the brand’s products are sold in.

Additionally, the gender split should be taken into account. Not every female influencer has a majority of female followers.

Influencer Pricing Formula Target Group Accuracy

The content above of influencer @deborah_tmz illustrates this fact. Her target group analysis reveals that 81% of her followers are men. So, would you invest in cooperating with this influencer if you wanted to reach a female audience?

The Influencer Pricing Formula

Let’s start the calculation. Our influencer pricing formula takes all factors mentioned above into consideration.

Influencer Pricing Formula

Media Value per Post, in $
Audience Quality, in %
Target Group Accuracy, in %
Brand Fit, on a scale of 0.5 to 1.5
Content Value, based on quality of $50 to $1,000

We’ll illustrate this formula using two female influencers with similar reach as examples.

 

A post shared by Caroline Daur (@carodaur) on

Both Caro and Deborah are German influencers with a reach of 1.1 million followers each. Nonetheless, their pricing will vary depending on different factors.

Let’s say the fashion brand Tommy Hilfiger would want to work with both influencers for the worldwide launch of a new female clothing line. We’ll calculate the expenses with the help of the influencer pricing formula.

This is how Tommy Hilfiger could calculate Caro’s pricing:

Media Value per Post$5,689
Audience Quality84%
Target Group Accuracy88.7% (female followers)
Brand Fit1.5
Content Value$300
Price$6,680

Calculation: 5,689 x 0,84 x 0,89 x 1.5 + 300 = $6,680


And here is Deborah’s pricing for Tommy Hilfiger:

Media Value per Post$5,031
Audience Quality63%
Target Group Accuracy19.7% (female followers)
Brand Fit0.75
Content Value$100
Price$552

Calculation: 5,031 x 0,63 x 0,19 x 0.75 + 100 = $552

Caro Daur is a fashion influencer with a brand environment that includes Dolce & Gabbana, Chanel, Louis Vuitton, and Dior. Thus, it can be assumed that her brand fit for a fashion brand like Tommy Hilfiger is very good and her content quality is of high value for the brand. Her good audience quality and a high percentage of female followers add to the price of approximately 6,680 Dollars.

Deborah, on the other hand, is engaged in the fitness sector rather than in fashion. Her brand fit for a fashion brand like Tommy Hilfiger is low which decreases her content value for the brand. Additionally, Deborah has a rather low amount of female followers and a mediocre audience quality. Thus, with 553 Dollars, Deborah’s pricing is significantly lower than Caro’s regarding a collaboration with Tommy Hilfiger.

But do these prices apply to every single cooperation?

The influencer marketing experts of foodspring frequently cooperate with influencers to promote their fitness foods. Will their potential expenses for a campaign with Caro and Deborah be similar to those of Tommy Hilfiger?

Here comes Caro’s pricing for Foodspring:

Media Value per Post$5,689
Audience Quality84%
Target Group Accuracy40.8% (German followers)
Brand Fit0.5
Content Value$100
Price$1,080

Calculation: 5,689 x 0,84 x 0,41 x 0.5 + 100 = $1,080


And this is Foodspring’s pricing for Deborah:

Media Value per Post$5,031
Audience Quality63%
Target Group Accuracy29.9% (German followers)
Brand Fit1.5
Content Value$300
Price$1,726

Calculation: 5,031 x 0,63 x 0,3 x 1.5 + 300 = $1,726

Deborah is a fitness enthusiast and works with fitness brands frequently. She keeps her followers updated on her fitness routine and her diet and enjoys a high level of authenticity in the fitness sector. For Foodspring, her brand fit is significantly higher than it is for a fashion brand like Tommy Hilfiger. And since Foodspring aims at female as well as male customers, her high amount of male followers does not impact her pricing negatively in this case. Thus, she would be able to charge a higher price for a fitness-related collab.

Caro Daur is a fitness fan in her spare time. She could be a possible addition to the influencer portfolio of foodspring. Nonetheless, she is rather involved in the fashion industry which lowers her brand fit for foodspring. Caro’s audience mainly follows her because of her fashion expertise. Her authenticity for fitness-related topics is significantly lower – her pricing is impacted by this fact.

The Takeaway

This influencer pricing formula takes all necessary metrics into account. Nonetheless, the soft factors have to be evaluated by each brand and for each cooperation individually. Two influencer channels might look similar at first glance and have the same follower number, but an in-depth analysis might reveal that the channels strongly differ regarding audience quality and target group fit.

 FollowersLike Follower RatioAudience QualityPrice Tommy HilfigerPrice foodspring
Caro Daur 1,162,052 3.4% 84% $6,680 $1,080
Deborah_tmz 1,102,617 1.6% 63% $552 $1,726

Keep in mind that factors like long-term relations between influencers and brands impact the pricing as well and are not included in the formula. Also, each influencer has a different value for each individual brand as we see with the fashion brand Tommy Hilfiger and the fitness food brand foodspring. It is no surprise that a fashion influencer like Caro Daur can charge a higher price for collaborating with a fashion brand than a fitness influencer can for the same cooperation. For a collab with a fitness brand, Deborah’s pricing, on the other hand, is significantly higher due to her better brand fit.

Thus, this influencer pricing formula is not a fixed pricing system but serves as a means of orientation for marketers. Of course, the final price for a collaboration has to be negotiated with the influencer or management and can differ from the result of our calculation. Marketers should aim for a lower value than the calculated one to get the best deal.

All data calculated with InfluencerDB.

Watch our on-demand webinar to learn more about influencer pricing, industry CPMs, and how to negotiate the best deals for your company!