Influencer marketing has quickly become one of the most effective digital marketing channels. As you look to keep up with the latest trends and stand out from the competition in 2023, developing a strategic influencer marketing budget is essential.
With over a decade of hands-on experience driving results through social campaigns, I‘ve helped brands both big and small successfully integrate influencers. In this comprehensive guide tailored to next year‘s landscape, I‘ll share critical knowledge that will enable you to reap significant returns.
Why Influencer Marketing Needs Its Own Budget
Unlike more traditional formats like print or TV ads measured by impressions, influencer marketing relies on genuine connections and engagement. The value comes from a creator‘s authoritative voice reaching and resonating with your precise audience.
This makes it impossible to benchmark against other activities using standard metrics. To fully leverage influencers as part of your integrated marketing strategy, having a dedicated budget is vital for planning campaigns and measuring true ROI.
Size Your Budget Based on Business Stage
With a better understanding of its strategic nature, what amount should you actually invest? Industry data provides helpful guidance:
- Startups – 5-15% of total marketing budget
- Growing Brands – 15-30% as efforts scale
- Enterprises – 25-50% focused on innovation
Within your company‘s current life stage, I recommend starting on the lower end of those spectrums. As you test and learn what performs best, double down on what drives outcomes to gradually increase your influencer marketing budget allocation.
Set Goals That Ladder Up to Revenue
The single most important step that most brands overlook is defining campaign success ahead of time based on business objectives.
Common goals include:
- Brand awareness and favorability
- Website traffic
- Lead generation
- Sales revenue
Get specific to quantify what you want to achieve. If boosting purchases is the primary aim, map influencer content strategies back to your sales funnel. Establish cost per lead and sale benchmarks for your economics.
This connects budgets directly to your actual monetization while setting targets for demonstrating ROI. I‘ll cover more on tracking performance shortly.
Audit Your Audience Personas
You can only achieve those established goals if you have a clear sense of who you‘re trying to reach. Influencer marketing supercharges your ability to engage very specific, highly-valued segments that align to products.
Take time to create detailed buyer personas across demographics, interests, behaviors, preferred platforms, and what motivates them. This further focuses your budget spending to only those influencers perfectly matched to customers.
Cost Varies Greatly by Type of Influencer
Your audience insights then inform what tier of influencer you tap for campaigns. Just as audience size and engagement differ greatly, so do average costs.
Mega-Influencers (1M+ followers) get $10K+ per post
Macro-Influencers (50K-1M followers) get $1-5K
Micro-Influencers (5K-50K followers) get $500-1.5K
Nano-Influencers (1K-5K followers) get $250-500
While reaching seven or eight figures of followers sounds appealing, don‘t undervalue lower-tier influencers. Micro and nano-influencers convert more followers into customers due to higher trust and engagement from niche communities.
I‘ve helped brands achieve their highest sales through smartly leveraging influencers of all sizes. Structure agreements by performance-based tiers to incentivize ROI.
Account For Content Production
You‘ll want to develop creative concepts and assets to integrate influencer posts with other initiatives. While you won‘t pay influencer content fees directly since they own the audience, you need to budget for:
- Developing compelling ideas
- Producing videos and photo shoots
- Custom graphic design
- Providing free product samples
- Campaign management
In-house teams or agencies can support on creative direction, development, and licensing to boost engagement. Quality original content gets noticed and shared with prospective customers.
Tech Tools Connect Efforts & Data
Bringing all these moving parts together at scale requires adopting SaaS platforms purpose-built for influencer marketing. Leading options like AspireIQ, Impact, Julius, and Grin provide discovery, workflow, analytics, and optimization.
Even basic plans cost upwards of $1,000 per month. The expense fuels a multiplier effect on results achieved from streamlined processes, informed decisions, and automation fueled by campaign data.
Constantly Track Outcomes
This brings us to measurement and running numbers-driven programs. Every activated influencer should tie to a UTM tracking code for tagging their content.
Analyze traffic driven, behavioral flows, conversions by creator, engagement rates, actual sales, and precise ROAS (return on ad spend) powered through the platform‘s reporting dashboards.
Compare this performance data to the KPI goals outlined earlier. Which creators and content best engage your potential customers? Refine your programs based on empirical evidence into what resonates most.
Optimize Spend Levels Through Experience
While this guide establishes a strong starting point framework, influencer marketing needs constant optimization from lessons only learned through experience. Leverage what the data reveals around outcomes to double down on what works and pull back on what doesn‘t.
Build enough frequency running quarterly campaigns to gain a level of precision around your ideal budget levels to achieve particular targets by segment. Reaching the next milestones in your business growth rely heavily on cultivating this expertise.
The opportunities for your brand are truly unlimited if you dedicate resources to nurture this essential channel and community. Feel free to reach out if you need any further first-hand perspective; I‘m always happy to chat influencer marketing budget strategy.
Now go wow your niche audiences in 2023!