Welcome to the first edition of Return on Influence. The influencer marketing newsletter dedicated to providing tips you can use to experiment your way to a better return on your influencer investment.

Here’s what you can expect:

Once a month, I — content marketer girly at Modash, chai drinker, Taylor Swift super-fan — Eleni Zoe will bring you the best 3 tips or tactics we’ve picked up from talking to expert influencer marketers, running polls and surveys, and studying other data-backed sources.

Okay, enough setting the table, let’s eat! 🍴

Figuring out what to pay an influencer or creator isn’t easy.

It’s one of the most common questions our success & support teams get and a source of incredible confusion for everyone involved (Creators, included!)

Over the course of the last month, the head of marketing at Modash, Ryan & I went on a fact-finding mission.

How do influencer marketers in ecom and other industries figure out how much to pay influencers? 

What we discovered is that the process of paying creators looks a lot like this 👇

And less like the benchmarks littered all over the internet that hoodwink newer influencer marketers into believing that payments depends on a simple plug & play equation.

cough Follower count + platform + type of content = price cough

The bad news? Payments aren’t easy because there are so many factors to take into account.

• The geographical market

• The niche

• Metrics like engagement rate & fake followers

• The campaign brief & deliverables

• The partnership duration (i.e. one-off, or year-long contract?)

• The brand (big brands are desirable to work with, and often get better deals)

The good news? Payments aren’t easy for everyone.

Much like all the things we do in marketing, you’re going to have to trial, error & negotatiate your way through until you get the hang of it.

Start with these 3 tips 👇

Tip #1: Focus on the real & relevant audience

We found that only 51.2% of the marketers we surveyed use fake follower rate as a payment consideration.

Gang, this is low.

Does it seem reasonable to pay for bots & fake accounts?

What you want to do is calculate and focus on the number of real, RELEVANT followers.

1. Check how many of a creator's followers are actually your target market (locations, age, gender)

2. Check for fake followers

If an influencer has 100k followers, but 25% of them are bots & fakes and another 50% are outside of your target market, you need to reflect that in your payments.

If you want any chance of that partnership being profitable, you can't pay as if you're going to reach 100k potential customers.

Sell the idea of a long-term partnership if the post is successful. And be prepared to say no & walk away.

Tip #2 Look behind the engagement rate

Engagement rate is the most used data point when deciding how much to pay an influencer, according to the 40+ influencer marketers we surveyed.

Now, if you’re investing in a high value collab (i.e. paying a lot up front, and/or looking for a long-term partnership), you need to take a more than a cursory glance at a creator’s engagement rate.

How come? Because it’s a metric that can easily be manipulated, whether by one viral post, or by engagement pods. Engagement rate doesn’t take into account other activities either. Many creators engage with their communities through Stories & DMs which won’t be reflected in the ER.

Most imporantly, there isn’t always a clear correlation between engagement rate & sales performance.

Senior influencer marketer Ben Williams told us about multiple examples where Farfetch’s top performers had less than 0.5% ER, but huge sales impact.

What to do instead

• Manually review comments. Are they genuine engagements, or generic nonsense and a lot of 🔥🔥emojis? You can tell a lot about how an influencer has built their community by looking through their comments.

• Dig deeper into the engagement rate data. Ask influencers to send you screenshots of their analytics or use an Influencer marketing tool.
  
  You’re looking for a break down of engagement by content type (i.e. Posts vs Reels)

  

  Breakdown of engagement rate in Modash

  You also want to understand the minimum, maximum, and median likes and comments. Is this creator consistently getting good engagement over time? 
  
  If yes, that’s someone you can bank on.

Tip #3: Set your own benchmarks

Stop Googling for benchmarks and start reaching out to creators instead. Since payment depends heavily on tons of factors, including the brand you’re representing and the niche, the only way you’ll get the lay of the land is to go out into the land.

Learn

Tanja Milicevic, Affiliate Manager at Donnerberg recommends

Benchmark

Mark Dandy, Head of Influencer Marketing at Ear To The Ground Agency goes a step further.

Run campaigns & study data

Every campaign you run will return data you can use to refine your benchmarks. Are you seeing any correlations between the size of the influencer & sales? Is engagement rate a good metric for you? What about audience demographics?

🕵️‍♀️By taking a Learn, Benchmark, Run & Study approach, you’ll begin to understand the factors that matter to your brand, industry, niche & market.

What’s working right now

The best bang for your Instagram buck right now is a combination of Reels & Stories.

Stories are authentic, easier to create, and their clickable links make tracking easier. Reels are higher effort, but have the potential to drive lots of views & new awareness.

Let’s make great content together

The internet is filled with influencer marketing advice from people who aren't actually doing it in real life. People who haven't been under pressure to deliver real ROI on their creator partnerships.

We can change that together. You bring the real-world experience. We'll bring the content creation expertise.

If you’re interested in helping us create the most helpful influencer marketing content in the world, visit our contributors page to find out how to get involved!