Try to Google how much you should be charging a brand for a sponsored post.
Did you get a straightforward answer? Our guess is no.
Determining influencer compensation can be tricky for both you as an influencer and even for the savviest of influencer marketing experts. There just seems to be no real consensus on the amount that influencers should charge brands, or what brands should ask to pay for a sponsored post.
However, given that influencers have a reach similar to that of social media display ads, assuming some standard rates and formula can be useful when estimating costs.
Digital Display Ads
Marketers often use CPM (cost per-thousand impressions) as a standard marketing calculation to determine the cost to reach 1,000 potential customers with a digital ad campaign. As the name says, it's the cost per thousand impressions of an ad, eg. a CPM of $1, means the marketer pays $1 for 1000 impressions on an ad. This helps comparing the cost of different display methods and channels.
Overall reports show that Instagram seems to have the cheapest CPM for display ads on social media. With averages as low as $4.44 and $5.68. Facebook estimates are more varied ranging from $5.75, $6.28 to $7.34 . Whilst Twitter and YouTube have been found to have the most expensive CPMs with Twitter at $6.93 and Youtube at $7.60.
Just like display ads, as an influencer you also have the potential to reach thousands of impressions with one post.
In influencer marketing, CPM is largely related to your follower reach.
In theory, a sponsored post can be seen by all of your followers, which means that the number of impressions a sponsored post receives, would be similar to your reach. Though making such assumptions about following and number of impressions can be a little tricky. One post can have multiple impressions from the same person, as a follower can view the same piece of sponsored content more than once, and also some followers may not see the sponsored post at all.
For blog posts it's a little different, rather than using following as a guideline to estimate the number of potential impressions, Blogs have average unique readers per article, or unique monthly visitors (UMV).
How much should you Charge Based on CPM
You could use the averages below as an indicator for how much you should charge brands based on your following. Multiplying the CPM by the number of your UMV/ followers on each of your social media handles.
ZINE CPM Benchmarks
Twitter : $6-$10
Formula: Cost Per Sponsored Post = ([CPM Benchmark] x [number of followers]) / 1000
Even in the averages above, among the social media platforms and between influencers, there is a big range in price.
Engagement rate helps differentiate good content from the bad. Influencers, whose content sparks interaction, lively conversations, and helps reveal more about the brand and its' products, are considered more valuable and will be more expensive than, influencers who simply post a photo and get mere impressions, with no interaction. Instagram CPM estimates assume that followers = reach, which is of course not the case. This also explains why Instagram has the lowest CPM of all channels, since it's hard to establish what the actual reach per post is (unless you have a business account and manually calculate the average reach of your instagram posts - tedious!). Engagement however gives a good indicator on how many of your followers have seen your post - the higher the better of course. On average, around 12% of followers see your post, that percentage however varies widely depending on how many followers you and your followers have.
Basing your prices on your Engagement rate
Unlike CPM which is used as a metric more so for brands who want to increase exposure, CPE (cost per engagement) is a better predictor of sales. As when followers interact with content, they are more inclined to go one step further into becoming buyers.
As reach increases engagement rates decrease. So for influencers with smaller followings, even though their CPM may be higher since their posts reach fewer people, their CPE would be lower as they have an increased engagement rate.
How Much Should you Charge Based on CPE
If you want to estimate your costs based on engagement rate, it's important to note that not all engagements are equal. Shares, comments, likes, re-posts, post-clicks all hold different weight on different platforms.
Instagram receives higher engagement rates than Twitter and Facebook. So using CPE is ideal for Instagram. Your Instagram engagement rate is provided on your ZINE media kit as a percentage. To find the number of your engagements multiply the percentage by the number of your followers.
Multiply your engagement percentage by the number of your followers, to estimate your average number of engagements.
ZINE CPE Benchmark
$0.25 - 0.40
Formula: Cost Per Sponsored Post = [CPE Benchmark] x [average number of engagements per post]
It’s up to you whether you use CPM or CPE as indicators to estimate, how much you should be charging brands. But you should also alter your prices accordingly.
- If your content requires more work or has high production costs
- if your following is comprised by a popular target audience. Popular markets have higher costs, as more advertisers would want to reach out to that specific audience
- If it’s a small startup or a charity
- If the brand includes a free product or event invitation