Working with influencers – people who have the ability to influence potential buyers or service by promoting them on their social media pages to their followers – has transformed the digital marketing landscape. It has become an essential strategy for brands across the UK and content creators from photographers to graphic designers and streamers.
Regardless of whether you’re new to your craft or well-established in the industry, influencers offer a unique opportunity to connect with your audience in an authentic and impactful way. However, working with them involves several financial considerations that you must manage effectively. This post will guide you through budget considerations, ROI tracking, and contractual considerations.
Budget considerations: Setting the right financial foundation
Before reaching out to an influencer, it’s crucial to establish a realistic budget. This should of course cover the fee an influencer will ask for in exchange to promote your product, but also additional costs such as campaign management and content production.
When setting your budget, you may want to consider the following factors:
- Influencer popularity: The fees that influencers charge will depend on the size of their following. You therefore need to balance your budget with the level of exposure to potential buyers. Massive exposure will inevitably result in higher costs for you.
- Platforms and types of posts: Influencers on different platforms may have different costs, as could different types of posts. For example, an Instagram reel – posts that appear on a user’s page for 24 hours – will generally be cheaper than Instagram regular posts.
- Content type: When working with influencers, what will the influencer do to promote your business? A simple Instagram post will be cheaper than a 10-minute YouTube review of your product/service.
- Campaign scope: A one-off post will typically be less expensive than a long-term partnership or a campaign that involves multiple content formats. However, a prolonged campaign is more likely to translate into more potential buyers coming your way.
- Hidden costs: Be mindful of potential hidden costs, such as content revisions, editing, or paid amplification of posts. Discuss these possibilities with the influencer upfront to avoid budget overruns.
Balancing your budget and creating a campaign that will attract the number of potential customers you want to your business is difficult, but it’s absolutely crucial. Take your time and speak to a financial adviser if you need help.
ROI tracking: Measuring the value of your investment
Tracking the return on investment (ROI) is critical for assessing the success of any digital marketing campaign, let alone an influencer campaign. The metrics you use to track ROI will depend on the specific goals of your campaign:
- Direct sales: If driving sales is your main objective, you can use affiliate links or unique discount codes provided to the influencer, allowing you to track the exact number of sales generated by their content.
- Engagement metrics: Likes, comments, shares, and follower growth can indicate how well the content is resonating with the audience. While these metrics don’t directly translate into sales, they can be important indicators of brand engagement and future conversion potential.
- Website traffic: Monitor referral traffic from influencer posts to your website. Use UTM parameters in the URLs shared by the influencer to track this data accurately through Google Analytics.
- Customer lifetime value (CLV): For ongoing campaigns when working with influencers, consider tracking the lifetime value of customers acquired through influencer marketing. This long-term metric can provide a more comprehensive understanding of the campaign’s ROI.
Contractual considerations: Protecting your investment
Contracts are a critical component of influencer collaborations, safeguarding both parties and ensuring clarity around expectations. Things to prioritise in your contract include:
- Deliverables: Always clearly outline what you expect from the influencer, including the number of posts, platforms to be used, and specific content guidelines (for example, mentioning certain product features or using specific hashtags).
- Timeline: Establish clear deadlines for content delivery and publication to ensure that your campaign aligns with broader marketing efforts.
- Exclusivity clauses: If you’re investing heavily in an influencer, consider including an exclusivity clause to prevent them from promoting competing brands for a specified period.
- Payment terms: Define the payment terms, including the amount, payment schedule, and any contingencies. Influencers usually require a deposit upfront, with the balance paid upon content delivery.
- Usage rights: Specify who owns the content created and how it can be used. For instance, can you repurpose the content on your brand’s social media channels or in ads? Ensure these rights are clearly stated in the contract.
If you need help hammering out the financial details of partnering and working with influencers as part of your digital marketing, contact us. We’ll help with budgeting, RIO tracking, contracts, and more.