Throughout the last decade, we have seen an unceasing upward trend in reliance on influencer marketing. While influencer marketing isn’t exactly new, the reliance on it is. Throughout 2017, this reliance has only increased, and now about half or more of all marketers say they plan to increase their spending on influencer marketing in the next year.
However, if you are a small business, you may not have all that much to spend on marketing, influencer or otherwise. Chances are your goal is to make as big of an impact as you can while spending as little as possible. So, how can you set an influencer budget that gets the results you seek without breaking the bank?
And when it comes to a return on investment, few types of marketing deliver as much as influencer marketing. While ad blockers can hide your ads from view and the clips that cannot be blocked are easily ignored, audiences enjoy listening to or reading their favorite influencers. As a result, SocialPR Chat found that for every dollar spent on influencer marketing earns an average of $6.85 in media value. So, if you are going to spend a little extra somewhere, this is where you should allocate those funds.
The answer to that comes down to the influencers you work with, how many you work with, and the scope of the campaign you want to launch. Larger companies can spend millions on influencer marketing every year. However, chances are you do not have that kind of cash to drop. So, how can you make influencer marketing and affordable option for your business?
Micro-influencers are influencers who have a small following—generally under 10,000. However, because their following is small, they are able to interact one-one-one with their followers. This translates into a very loyal following that is incredibly receptive to the content the influencer puts out. While influencers with millions of followers may have only 5% engagement, these micro-influencers can see upwards of 25% engagement. This ultimately translates into more bang for your buck.
While you are not tied to using the more common compensation structures, since they are well-known, it is probably your best bet. For influencer marketing, there are five common compensation structures: Cost per Engagement, Cost per Click, Cost per Acquisition, Pay per Post, and Free Product or Experiences. Let’s take a look at how each structure works.
Cost per Engagement (CPE): Each like, share, or comment earns a specific amount of compensation. You can set different rates for different types of engagement.
Cost per Click (CPC): Each consumer action earns a specific amount of compensation.
Cost per Acquisition (CPA): Compensation is based on the number or sales or sign-ups generated by the influencer.
Pay per Post: You pay the influencer a flat rate per post. Compensation rates may vary by platform and word count.
Free Product or Experiences: Rather than offering monetary compensation, you offer products or experiences that interest your influencer.
By targeting the right influencers and settling on the right form of compensation plan, you should find that you are able to leverage the help of influencers while staying with your budget.