Based On Past Campaigns...
As influencer marketing continues to mature, brand marketers are scrambling to figure out how much of their budget should be allocated towards this growing marketing strategy. Like every other aspect of influencer marketing, there are no set rules or guidelines in place to determine how much money should be spent on influencer marketing. So, for many brand marketers, figuring this out can be quite difficult.
From $50 per month to $500,000 per month, it’s nearly impossible to know right away how much your brand should be spending. However, based off of past campaigns and research that our agency has done, we have some solid knowledge to share. In this blog, Hollywood Branded discusses how much money a brand should spend on influencer marketing.
Big Brand Vs Small Brand: How Much Money Should A Brand Spend
The first step in determining how much money your brand should spend on influencer marketing is deciding whether or not you plan to run an influencer campaign using in-house resources or if you want to engage an outside agency.
If you’re a small brand with a small marketing budget, allocating in-house resources towards an influencer campaign will probably make more sense. These brands should be looking to work with micro influencers (those with 10k to 100k followers) whom many of which will work with a brand for product trade or for a much smaller fee than their higher-follower counterparts. However, if you do decide to work directly with influencers and bypass the agency, it’s important to keep in mind that influencers (especially as their follower count increases) will want to be compensated up front.
Influencers are getting more and more business savvy these days and are less likely to do things for trade, or, for the almighty deal that all brand thinks they’ve come up with -- giving an influencer a piece of the revenue generated from their posts. But don’t get discouraged, sometimes bringing an agency on board can help to negotiate these deals for you, which leads us to the next point.
Big Brands With Big Budgets: How Much Money Should A Brand Spend
If you’re a bigger brand with bigger budgets and are looking to make serious headway with influencers, choosing to work with an agency is your best bet.
For most agencies, a budget of $20,000 to $25,000 is a good starting point. Sure, you might be able to save a couple bucks by working in-house but by working with an agency, your brand will have access to the agency’s knowledge and expertise, better analytics and higher quality influencers that have already worked with brands in the past. In addition, an agency will help your brand scale its influencer efforts quickly and efficiently. And save you a massive amount of time.
If your brand is able to spend more than that $20,000 to $25,00 entry point on influencer marketing, you will likely see better results as the $50,000 range seems to be number that most brands continue spending against due to their high return on investment. However, it is important to keep in mind that a higher level of spend does not always equate to better success.
Influencer marketing isn’t a one hit wonder marketing strategy -- each brand will benefit from influencer marketing in its own unique way. By having a larger budget to allocate towards influencer marketing, a brand will be able to test out multiple different strategies to see what works best for them. Once they’ve figured out what does work and what doesn’t, a brand marketer can then increase his or her spend in their specific niche. Because this space is still so complex, working with agency who already has knowledge and past experience will help to find that niche quicker.
Is Influencer Marketing Even Worth It?
Yes, influencer marketing is absolutely worth it. According to the latest poll from influencer platform Tomoson, brands are receiving an average of $6.50 in revenue for every $1.00 spent.
That’s 2-3x more than any other traditional advertising channel! In addition, influencer marketing is currently the fasting growing marketing strategy so brands that don’t hop on it now are losing out on a major opportunity to attract new customers. In fact, influencer marketing tends to draw higher quality customers due to the perceived level of trust that influencers garner with their follower base. At the end of the day, people trust people -- put your brand into that mix and people will trust your brand.
But keep in mind - influencer marketing is not a one-shot wonder. To be successful, your brand needs to touch consumers through a variety of influencers who they follow.
Let’s Wrap It Up
Ultimately, the success of an influencer campaign comes down to a successful strategy -- not the money.
Some things to think about:
- Is the chosen influencer(s) the right influencer(s) for your brand?
- Is the content being created fit your brand identity?
- Is he or she including a proper call-to-action?
These are the types of questions that a brand marketer should be asking him or herself when putting together a campaign strategy. Now, answering these questions correctly is the hard part.
Ready To Start Your Influencer Marketing Campaign?
This is where the knowledge and expertise of an agency can be quite helpful. Here at Hollywood Branded, we eat, sleep and breath influencers and can surely help you put together a successful campaign. Check out our Social Influencer Guide to learn more about how to best work with influencers, and see the ways Hollywood Branded can help your brand out.