- 1. What is an Influencer Money Calculator?
- 2. How do Influencer Money Calculators work?
- 3. The accuracy of Influencer Money Calculators
Table of contents
What is an Influencer Money Calculator?
If you have never heard of an influencer money calculator, it is a feature of a typical influencer marketing platform that helps marketers calculate the value of any social media profile. The money calculator processes several data sets, which are taken from influencer's account, in order to assess what his or her estimated earnings per post could be, as well as how much brands should pay that specific influencer to maximize the return on investment (ROI) of their influencer marketing campaign.
Different influencer marketing companies will have different approaches to design their own money calculator. Some calculate the value in correlation with the price for traditional advertisement on the specific social media channel (e.g. Facebook Ads, Instagram Ads, Linkedin Ads), while the other companies may use equivalent information about influencer's compensation in the market (e.g. influencer marketing industry report) as the starting point to compare and analyze the standard price for different types of influencer. Using influencer marketing metrics, the tool can accurately gauge your earning potential by analyzing the audience data, follower growth rate, user engagement e.g. likes, comments, shares, and what sort of demographic market you have access to.
Depending on the database of the company, the money calculator is sometimes available to not only the influencers but also any social media profile (such as the Media Value Per Post provided by InfluencerDB). Thus, brands can use this feature to analyze the data regarding their own social media accounts and calculates the return on your investment (ROI) of social media advertising campaigns. Then, marketers can easily compare the returns of doing advertisement versus collaborating with an influencer and find the best solution for their marketing strategy. Most influencer campaign management tools allow users to put in the amount spent on their ad campaign/ influencer marketing campaign, the amount received in earnings, the overall rate of conversion, and other data in order to draw an accurate assessment.
How do Influencer Money Calculators work?
Influencer money calculators work in several different ways. When it comes to analyzing your income potential for a social media channel (such as Instagram, YouTube, Twitter, Facebook, or others), the tool primarily focuses on vanilla social media marketing metrics such as the number of subscribers, followers, or friends. By analyzing this data and cross-comparing it with benchmarked earning examples throughout the industry, the tools are able to generate a remarkably accurate potential earnings rate.
The second data set that an influencer money calculator may collect is the rate of pay for third-party ad groups that commonly advertise on influencer accounts. This rate of pay might be a commission percentage or ad exposure rate, typically calculated at an RPM or revenue per 1,000 impressions. There are other data sets analyzed as well with this type of tool, however, the user typically only has to enter their social media username in order to generate estimated earnings per post rate.
With regard to calculators that analyze your influencer marketing ROI, these tools tend to need a lot more manually entered data. The data used to calculate your ROI is commonly referred to in influencer media circles as your KPIs, an acronym for key performance indicators. KPIs are measurable units exclusive to the influencer marketing industry and can include your gross profit margin, net debt, after-tax profit margin, marketing campaign costs, year over year growth, and many other data sets. The more data the tool digests, the more reliable, broad-ranging and comprehensive the output will be.
The accuracy of Influencer Money Calculators
According to the market standards, most influencer money calculators are highly accurate in both estimated potential account earnings and influencer marketing ROI. However, they become less accurate when the influencer account has too many or too few followers. If an influencer has too many fans, it will be hard to assess the quality of those followers and identify the truly relevant group to a specific brand. For instance, not every single one of Selena Gomez's 140 million followers is a potential Coca-cola buyer. Meanwhile, an account with too few followers cannot reach the critical mass to be analyzed by the market standard's pricing. Thus, most influencer money calculators work best with micro-influencers, who have 15,000 to 100,000 followers, but to enhance the accuracy and reliability of money calculator, marketers need to combine these findings with the analysis of follower's audience quality in order to get the full picture about any influencer's profile.
Audience data of @selenagomez Instagram profile using InfluencerDB premium software
Another factor which may affect the accuracy of any influencer money calculator is that most influencer management agencies sign non-disclosure contracts with their high-end influencer clients. This means that due to contractual obligations set out by the influencer management, the influencers are not allowed to discuss earnings publically, meaning the author of the influencer calculators has almost no perfect way of benchmarking a large account holder's true earning potential as they simply have no reliable figures or earning data to work with. Additionally, exclusive ad deals that the influencers are likely to garner can greatly vary in payouts. Thus, marketers should see this as a numerical indicator to support their decision-making process rather than absolutely put their trust in the calculators.