Costs Are Soaring: The Current State of Influencer Marketing In 2017

Influencers are charging more, but is it money well-spent?

Influencer marketing is big business — and it’s only getting bigger. According to a survey by Tomoson, influencer marketing is the fastest growing online customer acquisition channel, and a survey by Linqia shows that 48% of marketers plan on increasing their influencer marketing budgets in 2017.


The True Power of Influencer Marketing

So, why is influencer marketing growing so fast? The answer lies in the power of earned media. Earned media is built on trust, communities and relationships—whereas traditional marketing relies heavily on paid media. Are you more likely to visit a new restaurant after a recommendation from a friend, or from seeing an ad? It’s no surprise that 92% of consumers around the world say they trust earned media, above all other forms of advertising.

Source: Titan SEO

And, paid media isn’t just less trustworthy than earned media, it’s also actively ignored. In 2016, there was 30% increase in the use of online ad blockers worldwide. So, as paid media becomes less effective as time goes on, influencer marketing will continue to become more important to business success. But not everyone’s happy about it.

The Frustrating Problem With Influencer Marketing

The confusion around how much to pay influencers seems to grow in unison with the industry’s boom. In a study by The Internet Creator’s Guild, an educational YouTube channel with 2M+ subscribers admitted that, “even after doing a bunch of deals I still feel kind of cheated. We are not exactly cheap, but I still feel that I don’t know what we are worth and other people get more.”

And, in an anonymous interview with Digiday, a social media exec said, “We threw too much money at them and did it too quickly. So in 2014, they were making $500 to show up and take some photos. Then it became $1,500. Now it’s hundreds of thousands of dollars,” going on to say, “We have no idea what to pay them. That’s the problem.”

A young industry in a state of exponential growth has no standard rates or rules. It’s the Wild West of marketing.

So, How Much Do Influencers Earn?

With some influencers swapping promotion for freebies, to YouTube’s top earner Pewdiepie, earning a whopping $15M in 2016, it’s far from a one-size-fits-all industry. Still, understanding ball-park figures can be a good place to start. Here, Captiv8 breaks down the average earnings for influencer posts across YouTube, Facebook and Instagram:


But while many marketers are targeting the big players, it’s actually the micro-influencers who have better engagement rates—and who therefore, produce the largest ROI.

Micro-Influencers Are More Effective Than Larger Accounts

Micro-influencers have thousands or tens of thousands of followers, instead of hundreds of thousands or millions. They’re trusted leaders, with die-hard communities, usually operating in a niche. Just look at these two graphs from Markerly, showing the relationship between Instagram followership and engagement:


As counter-intuitive as it seems, the more followers an influencer has, the less engaged they are.
For this reason, it’s far more effective to partner with a group of micro-influencers, than a single big-hitter. Markerly goes on to suggest, “We believe influencers in the 10k-100k follower range offer the best combination of engagement and broad reach”. So, why do businesses continue to throw money at the larger accounts?

Businesses Are Partnering With Influencers To Build Their Brands

According to a global research study by Traackr, businesses are looking to use influencer marketing to improve brand advocacy, expand brand awareness and reach new targeted audiences.


A survey by GroupHigh, showed that calculating ROI is the biggest challenge marketers face in influencer marketing. Add in the confusion surrounding how much to pay influencers, and businesses will struggle to predict how much to invest in an influencer campaign.

So, It’s More Important Than Ever to Demonstrate ROI

Ultimately, as the use of ad blockers continues to rise, and earned media continues to overtake paid media, influencer marketing is only going to become more critical to business success.

With businesses increasing their budgets, and influencers increasing their prices, it only becomes more important for businesses to have a clear path to ROI, before looking to partner with influencers.

Social-reach and views might look great, but if businesses don’t strive to ensure that these turn into clicks, sign-ups, measurable social buzz (like comments and shares), or revenue, the bubble of influencer marketing will burst.

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