How Brands Pay Influencers: All About Influencer Incentive

Ever wondered how brands pay influencers? Well, there’s no one answer. There are many different types of incentive brands use to compensate influencers for their collaborations. 

Keep reading to learn about the types of monetary and non-monetary incentive that exists, and some tips on how brands can pay influencers seamlessly. And remember, your budget directly shapes how you search for Instagram and Youtube influencers on Heepsy. So before searching for influencers for your campaigns, make sure you know what you can offer them.

Non-monetary incentive

In influencer marketing campaigns, non-monetary compensation is generally a free gift in the form of the product that the brand sells. But it doesn’t always have to be a physical product; it could be a digital product, a service, or an experience, too. For example, a music festival might give an influencer a free VIP ticket in exchange for posts showing off their experience at the event. 

Product is generally the best type of incentive for brands, as it means you only have to invest the cost of materials and labor used to make the product. But the perceived value to the influencer will be higher. They’ll recognize the market value of the product, while you calculate your investment as the cost of production.

However, paying influencers in physical products can also cause snags in your campaign, if you don’t plan carefully. Always plan ahead to accommodate shipping and handling costs, and potential delays associated with such. 

If you think you may run into problems with getting products to influencers, look for a digital solution. For instance, it’s definitely nice to send an influencer a personalized box from your fashion boutique. But, for logistics’ sake, it may be better to send them a voucher via email that they can redeem at your eCommerce.

Which influencers is this strategy useful for?

Nano influencers are a great option if your budget only allows you product incentive. Nanos only have 1K – 5K followers, but their extremely high engagement rates make up for that. As they’re just starting out, they’ll generally accept collaborations in exchange for product alone.

An Instagram review of products gifted to nano influencer @cleanbeautyrepublic., showing one example of how brands pay influencers
A review of gifted products by @cleanbeautyrepublic.

Next up, micro influencers are a great addition to any campaign. In fact, brands are using them now more than ever to capitalize on their high engagement and low price tag. Some micro influencers may collaborate with brands for only product. But with 5K-50K followers and a bit more experience, they may decline products of very low value. Keep this in mind, along with the fact that some micro influencers will request a small fee for their collaborations. 

Finally, when working with influencers of the higher tiers, it’s nearly impossible to strike a deal based purely on non-monetary incentive, unless your product is extremely valuable, like diamond jewelry or a motorcycle.

Monetary incentive

This is the money side of influencer incentive. As influencers rise up the ranks, they’ll begin to request a fee in exchange for their collaboration. And there’s no real limit on those; just a few weeks ago we covered two extreme examples of the influencer business model and how much money it can bring it.

Once influencers hit the Medium tier, expect them to start asking for fees regularly. Influencers who hire managers may also cost a bit more, as the manager may add on about 20% to the fee.

 

An Instagram post showing another example of how brands pay influencers: paid partnerships.
A paid partnership between @znombona and @huggies_sa. Remember to check up on the applicable guidelines about how influencers must disclose brand collaborations.

Take a look at these two examples of monetary compensation in influencer marketing campaigns.

Flat fee

This is simple. Negotiate a one-time fee with the influencer before starting the campaign. You pay that, the influencer posts the agreed-upon content, and if all goes according to plan, everyone is happy. 

CPA

Cost per acquisition, or CPA, is a payment model that works like commissions. The brand pays influencers based on how many acquisitions they make for the campaign. 

Acquisition can mean whatever your campaign wants it to mean, but the important thing is to have it clearly defined. Examples of acquisitions in influencer marketing campaigns include sales, registrations to your website, downloads of an app, or newsletter signups.

CPA can be used as a fixed rate per acquisition or a variable rate per acquisition. For the first, imagine you’re that fashion eCommerce we mentioned before. You could offer an influencer $5 for every sale generated through the links on their profile. 

Or, if you prefer the variable model, you could offer the influencer 5% on every sale generated through their links. So, if a customer spends $10, the influencer gets $0.50. But if a second customer spends $300, the influencer will get $15.

Contracts & invoices

Another important aspect of influencer incentive is how to define and keep records of the compensation.

Get agreements in writing

If you make a deal over the phone, or through social channels that could potentially be deleted, you may lose written proof of the collaboration you’ve negotiated. Therefore, regardless of how brands pay influencers, it’s important to get the collaboration agreement in writing

A contract is always best, but there may be cases in which you choose not to prepare one, like collaborations built around products of low value. In those cases, make sure you get another form of written confirmation that you can save for later.

Use invoices for monetary compensation

Naturally, if you’re paying an influencer in product alone, an invoice isn’t necessary. But when an influencer requests a monetary fee, they should send you an invoice. If the influencer has a manager, they should be used to this process. Additionally, some large companies may have templates they give to the influencer to fill out. 

Whatever the process, make sure you iron out the details while negotiating the collaboration. Generally, invoices are issued after the influencer has published their content. But you may encounter influencers who want to be paid upfront, or half upfront and half later.

For more about contracts, invoices and negotiating with influencers, see our Definitive Guide to Influencer Marketing.

Conclusion

How brands pay influencers is largely determined by the size of the company, the scope of the campaign, and the budget available for it. Fortunately there are various types of influencers, and many methods of paying them. Because of this, any business, no matter how big or small, can launch influencer marketing campaigns and reap their benefits.

Kate works on the Marketing team at Heepsy as a content writer. When she's not online she can be found traveling or trying out a new recipe.
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