How Much Should You Pay Influencers? 2023 Update

Influencer marketing has exploded in popularity over the last few years. An estimated 75% of brands now leverage influencer campaigns, turning to creators on Instagram, TikTok, YouTube and beyond to promote their products.

But knowing how much to pay these influential content creators remains a major question mark for many brands.

Influencer rates can vary wildly, from nano influencers charging $100 per post, all the way up to celebrity influencers earning millions per sponsored collaboration. Determining fair compensation is crucial – you want to get the best ROI possible without undervaluing an influencer‘s reach and impact.

So how do you decide what to pay? This guide breaks down the key factors that determine Instagram influencer pricing in 2023, with real examples to help inform your budget.

Key Factors That Impact Influencer Rates

Influencer fees are dependent on a range of variables. As a brand, being aware of these key factors will help you set reasonable rates and negotiate fair contracts.

Social Media Platform

Not all platforms are equal when it comes to influencer compensation. For instance, Instagram influencers generally earn higher rates compared to Twitter or TikTok. This comes down to IG‘s focus on high-quality photography, longer-form video, and robust analytics driving measurable conversions.

As the ideal platform for spurring purchases and promoting products visually, brands pay a premium access to Instagram creators. A 2022 survey by Influencer Marketing Hub found that 94% of polled influencers said Instagram delivered the best ROI for their brand partners.

We‘ll focus specifically on Instagram influencer pricing in this guide as it dominates marketing budgets. But remember to also consider emerging spaces like TikTok which offer cost-efficient ways to tap into Gen Z audiences.

Number of Followers

Follower count significantly impacts negotiation power. Nano influencers under 5K can often be hired for as little as $50-100 per post. Meanwhile, influencers with 1 million+ followers can charge $10K+ per post.

Here‘s the typical breakdown:

Data via Influencer Marketing Hub

So while that Instagram model with 500k dedicated fans will transform your brand awareness, she also comes with a hefty price tag.

When deciding who to partner with, I always suggest brands mix macro influencers with micro supporters to maximize awareness at an efficient cost. Let your mega influencers focus on aspirational storytelling, while your nanos distribute coupons and discounts driving conversions.

Engagement Rate

Raw followers only reveal part of the story. You also need to evaluate the quality of an influencer‘s audience.

Engagement rate measures how well an influencer interacts with their base. It‘s calculated by dividing total comments and likes by their follower count.

For example:

Influencer has: 
   100K followers
   Receives 5K likes/comments per post on average

Engagement Rate = (Likes + Comments) / Followers  

             = 5,000 / 100,000  

             = 5%

So in this case, the influencer has a 5% engagement rate, which is fairly standard. Nano influencers often fall between 5-10%, while mega influencers hover around 1-2% due to their more massive, less targeted reach.

Higher engagement equals a more attentive, responsive audience. Even though their follower count is smaller, a microinfluencer with a 7% engagement rate may ultimately drive more conversions than a celebrity with a 2% engagement rate.

When evaluating potential partners, seek influencers whose engagement aligns with your niche. Food bloggers should have highly engaged fans who regularly like and discuss recipes. Fashion influencers need followers who actively comment on outfit posts.

And expect to pay a rate premium for creators who spark discussion. Their ability to engage viewers in an authentic dialogue around your brand is extremely valuable.

For example, take this case study from a beauty client I managed campaigns for:

We tested two influencers promoting the same luxury skincare product:

1. Micro influencer, 10K followers, 8% engagement
2. Macro influencer, 80K followers, 3% engagement

The micro influencer generated over 550 clicks and 45 sales of the $400 moisturizer.

The macro influencer with 8x more reach drove just 300 clicks and 22 sales.

Despite significantly lower followers, the micro influencer‘s posts sparked more passionate discussion and questions about the product. This authentic engagement translated directly into conversions.

So take engagement rates seriously. Study comment sentiment, not just vanity metrics. Your most affordable nano partnership could become your strongest brand advocate driving real ROI.

Type of Campaign

Influencer marketing encompasses a variety of formats, including:

• Sponsored feed posts
• Instagram Stories
• IGTV videos
• Instagram Reels
• Takeovers
• Live videos

Certain content demands more time and resources from creators. An elaborately produced Reel showcasing your product in action arguably carries more value than a quick Story shoutout.

Understand exactly what you expect from an influencer partnership and compensate accordingly. For one-off posts, tier pricing like this:

• Instagram Feed Post: Base rate
• 2-3 Instagram Stories: 1.5x feed post rate
• Instagram Reel: 1.5-2x feed post rate
• Multi-part Reel series: 2-2.5x feed post rate
• IGTV tutorial video: 2-2.5x feed post rate

Sponsored content that requires significant effort or exclusive promotions (like takeovers), may warrant even higher rates depending on the influencer‘s following and niche.

Now more than ever, short-form video dominates feed algorithms. Reels generate 10-30% more engagement than photos in 2023.

Tapping the viral potential of Reels and Stories should be top priority. Ensure creators have video equipment, editing skills and adequate direction to produce thumb-stopping motion content.

Compensate them appropriately for this premium format. Then watch the views and sales roll in.

Brand Expectations

Your goals and expectations for the partnership also determine appropriate rates. Key considerations include:

Exclusivity: Do you want to be the only brand the influencer promotes within your industry for a set time period? Exclusivity boosts rates.

Content Ownership: Do you want perpetual usage rights to the content produced? Expect to pay more for full content IP ownership.

Campaign Length/Duration: Longer campaigns lasting weeks or months warrant higher investment than one-off posts. Industry experts recommend signing influencers to 6-12 month contracts in order to build authentic connections between them and your brand.

Affiliate Commissions: Will you offer the influencer a cut of any sales they drive via promo codes or affiliate links? Performance-based payments may enable higher upfront investment, while incentivizing influencers to boost promotion.

Be clear about deliverables, rights, incentives and time commitments expected upfront so pricing negotiations proceed smoothly.

Quick tip: Also consider your brand values when vetting potential partners. Seek creators who authentically align with your mission beyond vanity metrics. This emotional resonance will come through in their content.

Location Impacts Pricing Too

Geographic considerations also influence rates:

Local Influencers know their regional community best. A hometown microinfluencer could more genuinely connect your brewery or boutique to locals. Expect to pay 10-25% premiums for their insider credibility.

International Influencers who create content in your brand‘s language add tremendous value in foreign markets. They intrinsically understand cultural nuances that translate better. Be ready to pay 20-50% above average rates to tap into these localized communities abroad.

Additional Factors

• Niche relevance – Align influencer content focus with your target demographic. Foodies attract foodies.
• Production quality – High-quality, well-produced content merits higher pricing.

Consider these supplementary factors when assessing influencer partnership potential.

Real-World Influencer Rates in 2023

Putting these criteria into practice, here are real-world examples of nano, micro and macro Instagram influencers and their typical rates in 2023.

Nano Influencer Rates

Amber Broder @amberskincarediary

• 2.3K Followers
• Skin/Beauty Niche
• 7-15% Engagement

Prices:

• Feed Post: $100-$120
• Reel: $200-$250
• Story: $50-$75

Smaller brands can activate nano influencers like Amber to promote products in an authentic way to very targeted audiences. Her smaller but highly engaged skin care community allows tailored recommendations often outperforming celebrities.

And brands seeking microfeedback from early users find strong value having influencers like Amber regularly interact with followers about the product experience.

Micro Influencer Rates

Tyler Chanel @thriftsandtangles

• 13.7K Instagram Followers
• Lifestyle Blogger
• 3-5% Engagement

Prices:

• Feed Post: $500-$850
• Reel: $750-$850
• Story: $100-$250

Micro influencers like Tyler land the marketing sweet spot balancing community connection with wider reach. Note her engagement dips slightly compared to nanos. But sponsored visibility starts around 10K followers, making her base more valuable.

I‘ve run micro influencer campaigns that generated nearly 600% ROI from the sales and leads produced. When I analyze the highest converting partners, micro influencers dominate – their authentic voice resonates.

Macro Influencer Rates

Macy Mariano @wanderwithmacy

• 167K Instagram Followers
• Travel/Lifestyle Niche
• 2-3% Engagement

Prices:

• Feed Post: $1,200
• Reel/Video: $1,800
• Story: $300

Despite having lower engagement, Macy‘s expanded visibility commands higher branded partnership rates. She brings sponsors expanded reach balanced with relevant lifestyle content.

For brands focused on mass awareness over conversions, macro influencers like Macy grab attention. I positioned a resort client as the premier family spring break destination using travel macro influencers – site traffic jumped 26X YoY.

---

Key Takeaways: Setting Your Influencer Marketing Budget

Determining fair and mutually beneficial influencer compensation requires assessing many factors: audience size, engagement levels, content expectations, rights requested and more.

By outlining clear deliverables and evaluating influencers carefully against core benchmarks, you can invest smartly. Mix nanos, micros and macros tailored to your niche. Story formats like Reels often resonate best, but require higher rates which balanced engagement warrants.

Be upfront about priorities – are you focused on wide awareness or sales conversions? Set goals then select creators who align best.

And remember, top influencers operate like media channels. Their credibility sways audiences more effectively than branded ads alone ever could.

When leveraged strategically, influencers generate a high ROI. View compensation through the lens of performance value over simple cost.

What tips do you have for brands on setting influencer partnership pricing? What rates seem reasonable to you as a creator? How have you approached negotiation conversations? Share your thoughts below!