WHY NOW ISN'T THE TIME TO RAISE CREATOR FEES

Influencer marketing is an interesting sector to be in right now, as retailers stumble to recoup after Covid. Most brands have set themselves large sales targets but with conservative budgets, meaning it really is the time to make more impact from less money. When you factor in the big changes to the performance marketing industry (iOS updates, paid social changes, etc.) more pressure has been put on creators to be the saving grace of the marketing mix. 

From the creators’ standpoint, many thrived during the pandemic as consumer dwell times soared and they were for many the only form of advertising that was regularly absorbed inside a household. Creators are armed with brilliant case studies from that time, which although impressive, are unlikely to be replicated as the world reopens and we see a wider range of advertising methods regain their impact. However, this hasn’t stopped many from upping their pricings, meaning you have the reverse issue to that of a brand: creators want more money in 2022 to deliver less impact than in 2020/2021. 

Image credit: Emma Thatcher

You can see the conundrum, often wrestled out over a series of emails between a creator and the brand (or a long-suffering agent). When it comes down to it, the brand is going to have the ultimate control as they are the ones with the budget. However, where it starts to get murky is where brands over-blame the pandemic; making unreasonable demands in the name of “recuperation.” 

It's important to be brutally honest when it comes to creator costs; nobody really has any official way to price themselves or their talent. If there was such a metric the world would be an easier place and as much as you can benchmark, doing so doesn’t give you any guarantees. Being totally candid the UK market is not a place for unreasonable fees – this is not a marketplace with minimal options. Put simply: if one creator asks for too much, brands move on and find a different option. As unfair as a creator may feel this is, the pendulum of hold on the industry really does sit with the brand and creators should be humble to it. 

The reality is that influencer marketing is usually priced by a creator’s individual historic fee structure, that was probably started in a “let’s see if they go for it” fashion. Or, it comes from one creator speaking to another and benchmarking their own costs between themselves (or the same happening within a talent agency’s roster). There is no perfect way of going about it; many a performance-minded marketeer has tried to overly regiment fee structures based on a sum usually in the form of “engagement rate x total follower size = result” which is at best imperfect, at worst doomed for failure. 

As an example of the disparity, we recently worked on a campaign where we needed a handful of the same sized creators. We had already researched heavily and knew that despite all those shortlisted having surface level stats that appeared similar, underneath them were very different figures meaning we earmarked varying costs to each one. When we approached them the suggested costs that came back were jaw-dropping. As we mentioned before, all had the same surface level stats (what we call vanity metrics: average total engagement rate and total following). For the same deliverables the costs varied from £900 to £11,000 (some claiming an extra 20% for agency fee which we have very little time for – a brand should not pay for a creator’s decision to hire help). 

In fact, those with the more impactful figures were the ones who came in low. Those shooting for the high costs were also those least prepared to discuss a breakdown and justification for those figures – and the frostiest towards us putting forward a very transparent reason for them needing to rethink. The campaign went live, with the majority of creators involved being paid more than they quoted for – as we went for the ones with the stronger, deeper analytics – most of whom underquoted themselves. 

On the flip side to defend creators a little, brands really need to know when to stop when making requests in addition to a creator making content for them on their feed. If a brand wants to use the content, they need to understand it costs money. Put simply; would any other form of creative hand over their assets for free? No. Costings for that can be tricky, but equally a brand knows what it costs to commission a shoot and hire in photographers, etc. and pricing should be benchmarked accordingly. 

Content rights are expensive and rightly so. It’s a complicated thing to put a price on but the length of usage, the number of times a brand wants to use content, the varied ways the content will be used all play a part in coming to a number. Where a brand isn’t sure and just wants it in reserve, we typically suggest they should pay 30-50% of the fee again for 6 months usage. Creators should also be wary of what having that content out in the industry will do – it may limit the number of other brands in the same sector who will want to work with them as they can see they are affiliated with a competitor. 

If you are a smaller brand, unfortunately much like other advertising methods influencer marketing may now be out of reach for you. Should a large creator want to work with you, you should be very aware if they are taking a reduced fee and appreciate it. The “excuse” of being small is not really a valid one anymore and concentration should be focused on working with creators who are similar in size to you where there is an equalled interest in furthering success on social media. Yes, it means the impact is lower but as the costs are too that should be reasonably understood. 

So how do you get it right? Well, both brands and creators should be ready to be transparent. We suggest brands are open with the way they assign budget, and they base pricings in a proportional manner based on information provided by all creators they wish to be involved. Ignore the surface level stuff; a creator having 100,000 followers is not by any means worth x10 more than someone with 10,000. Impact is measured by deeper demographic info, relevant case studies and by listening to the creator in question as to what deliverables will hit assigned goals. We suggest (as outlined in our downloadable Pricing Guides) that instead of pricing on “totals” you should focus on more specific requirements within those large numbers to determine how relevant the creator is for a campaign. We’ve seen this go both ways – some will really fall down when it’s revealed exactly how many of their followers would reasonably be relevant to the brand’s objectives, whereas others suddenly become a lot more interesting when it’s clear how aligned a creator is with what needs to be achieved. 

Remember that success comes from creating a broad marketing funnel. That doesn’t have to all come from influencer marketing; what’s going on in wider communications, marketing and customer experience is all relevant. Most influencer activity will gather a snowball effect; the person who posts first will probably have lower conversion rates than the person who goes second, etc. Therefore although code redemptions can be a good measurement, it’s important to factor in the length of the campaign when collating for a comparative study. 

 Furthermore, as we really harp on about internally, different creators invoke different responses. We break creators down into three categories – sales, halos and curators – for that very reason. It is naïve to try and broadly group and compare creators against each other and we suspect the reason so many brands get it wrong is they choose the wrong type of creator for the wrong kind of result. 

To come back to our original point; influencer marketing pricing in 2022. Two things need to be remembered. Firstly, that working with creators can be incredibly impactful when done knowledgably, collaboratively and strategically. This needs to be respected by brands – it is not an area where you can cheaply gain results. Secondly and directed more specifically at creators; remember that 2022 budget was earned through 2021 revenues. Although there are some exceptions most brands did not weather Covid well. For that reason, whilst it is tempting to increase your fees we suggest being very flexible and going more by the % of total spend a brand is willing to allot to you (and ensuring that the proportion is fair) and/or by how much you want to take on the work in question.

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