I N F L U E N C E R M A R K E T I N G R E S O U R C E S

H O W T O G U I D E S F R O M Z I N E

B U D G E T I N G Y O U R I N F L U E N C E R M A R K E T I N G C A M P A I G N S

ZINE INFLUENCER FOCUS

ZINE’s ‘How To’ guides provide explanations & actionable advice to help you tackle some of the biggest challenges faced in the influencer

marketing industry

2

HOW TO GUIDES FROM ZINE

How to budget an influencer marketing campaignHOW TO GUIDES FROM ZINE

The biggest challenge for most marketers looking to launch an influencer marketing campaign is budgeting. There seems to be a lot of mystery around how to budget an influencer campaign and with little transparency in the market around pricing. It’s understandable how budgeting is often perceived as a dark art, best left to the experts in the industry. All it takes however, is some relatively simple math and some key variables. Even if you’re not sure about the exact value of those variables, understanding what drives the cost and reach of a campaign is a helpful exercise. Whilst there are websites out there offering free budgeting tools for

marketers, the underlying assumptions of their models are mostly unknown. So how do you know this tool is doing a good job in budgeting your particular campaign? It probably isn’t.

This blog post will go through the steps of building a simple but effective budgeting tool for your influencer marketing campaign and explain the underlying drivers and variables involved. Since it’s still the most popular platform for in-fluencer marketing out there, we will focus exclusively on Instagram for the purpose of this exercise.

THE VARIABLES

Total Reach - This is the total reach of your campaign, simply calculated as the sum of all followers of the influencers on the campaign. Budget - The total budget you have available for this campaign Number of Influencers - The target number of influencers you want to work with

All of the above variables can be calculated with some simple formulas:

Total Reach = Avg Influencer Reach*Number of influencers

Budget = Number of influencers*Avg Influencer Fee

Number of Influencers = Budget/Avg Influencer Fee

Where most marketers will struggle with the above, is the average fee and reach per influencer. There is no single price for influencers, and most campaigns will have influencers of different reach - meaning Influencer fees and reach could vary a lot across the campaign.

Instead of an average fee, it’s easier to use CPM - the cost per thousand followers. If you know how much the cost per 1,000 followers is you can easily work out how much reach your budget will buy, how many influencers you could work with or how much budget you will need to achieve your target reach.

CPM (and CPE)

Letting influencers know what your objectives are will help shape their content. Whether your goals are awareness, con-sideration, buying or advocacy, providing details of specific

3

BUDGETING YOUR INFLUENCER CAMPAIGNS

goals and how they will be measured, eg. clicks, new follows etc. means the influencer can weave these objectives in their content strategy.

The traditional CPM metric has quickly been adopted as a simple benchmarking tool that allows marketers to compare influencer fees, more or less, like for like. In theory, you would be indifferent between one influencer with 100k followers at £550 or two influencers with 50k reach at £275. The CPM for both options is £5.5 [550/(100,000/1000)]. But there is no single CPM for influencers. Rates vary by size and also depend on other factors - however for now, we’ll consider the impact of using influencers of varying reach on your campaign budget.

As reach increases, CPM decreases, making larger influenc-ers relatively cheaper than smaller influencers. The chart below shows the relationship between influencer reach and fee across UK influencers based on a limited sample from the ZINE database.

So why are micro influencers so much more expensive than larger influencers? And why is everyone praising micro influ-encers as a cheaper and more effective option for influenc-er campaigns?

1. The price floorSimply speaking, there is a minimum fee anyone would

expect for creating content - regardless of how small their following. If they are serious about their ambitions as an influencer they will put in some effort in creating content, meaning time is spent doing so. Even with as little as 1,000 followers - few people would spend a day or half a day coming up with content, producing and editing it, for less than say £30 - £50, implying a whopping CPM of well, £30-£50 for 1k followers. 3. Higher concentration of relevant audienceMicro influencers are more likely to have geographical-ly more concentrated following, meaning if you’re targeting a single country, for example UK, you will get a better deal (CPM) once you adjust for geographic relevance. Larger influ-encers might be cheaper based on CPM but tend to have a greater geographic spread in their following, resulting in an overall lower relevant reach. 2. Micro Influencers have a more engaged audienceMarketers should not only be concerned about reach but also engagement, meaning the percentage of followers who engage with an influencers post (on average). Smaller influencers have a more intimate relationship with their followers, are often considered to be closer and more engaged with their audience, and more trusted. In a previous report, ZINE surveyed over 1,000 consumers and found that more than one in five (23%) consumers said that they would be influenced to research or buy a product if it was recom-

ABOVE: A high CPM correlates closely with a higher engagement rate

ABOVE: Average CPMs across Influencers with different reach

4

HOW TO GUIDES FROM ZINE

I F Y O U C O U L D S N A P U P A 1 M + I N F L U E N C E R

A T A C P M O F 3 . 9 - W H Y W O U L D Y O U B O T H E R

D E A L I N G W I T H A N U M B E R O F I N F L U E N C E R S

A N D H I G H E R C O M P A R A T I V E P R I C E S ?

5

BUDGETING YOUR INFLUENCER CAMPAIGNS

ers at 100k+ and micro influencers or a number of mid tier influencers around the 50k mark. It’s probably best to leave the exact combination more or less open until you have done some research on appropriate influencers, reached out to check their fees and compared geographic and demograph-ic break down of their audience. Don’t’ get stuck on looking for an influencer of an exact size at an exact rate for your campaign - you will make your research and execution un-necessarily difficult by doing so.

T A R G E T R E A C H K N O W N

I want to reach 1,000,000 people on instagram/ I want to work with 10 influencers with around 100k reach - how much budget do I need? Again, it all comes down to the type of influencers you chose and again, what really matters is your target CPM / average reach of influencers in your campaign. Since we’ve done the math before, let’s keep it simple here: Budget = (1,000,000/1000)* target CPM

mended by someone they didn’t know but trusted. Since engagement rates are higher for smaller influencers, their CPE (Cost per engagement) tends to be lower, despite a higher CPM.

To make things a little more complicated, these statistics are simple market averages, not taking into account seasonali-ty, industry verticals, cities, etc. You will more often than not encounter outliers on either side of the spectrum.

Individual influencers price themselves based on supply and demand, not on reach. The above analysis was run on in-fluencers across the board, but different verticals will have different price tags. Mum and high end fashion influencers are notoriously expensive as they usually have an audience with a higher disposable income. An influencers reach on other channels apart from instagram can also play a role, let alone celebrity status.

BUDGETING BASED ON CPM

To budget your influencer marketing campaign you will thus need to decide on the average reach of the influenc-ers in your campaign. You don’t have to work with influenc-ers of exactly 50k reach to be able to use CPM, as long as you roughly stick to your average reach target you will be fine. Setting a target CPM for your campaign will make your life a lot easier when planning and executing a campaign. It’s an easy way to keep track of your budget and gives you a benchmark to decide on whether an influencers is too expensive or not. If you still have no idea about what variables to plug into your model, I’d recommend to use the market average of £6.5 to start with, just to get a feeling for the numbers. Once you set a CPM you will only need either the total reach of your campaign or the budget to work out your entire campaign framework.

B U D G E T K N O W N

Assume your budget is £5,000 and you are looking to work with an average influencer size of 50,000 at a CPM of £6.5 - a commonly observed mid tier CPM in the UK. (£5,000/ £6.5)*1000 = 769,230 Total campaign reach Your average influencer size is 50k, so you will work with around 18 influencers (909,090/50,000). Your 18 influencers could be a mix of some macro influenc-

6

HOW TO GUIDES FROM ZINE

Or using the numbers of the previous example:

(1,000,000/1000)*6.5 = £6,500

T A R G E T C P M C O N S I D E R A T I O N S

So wy not set the target CPM as low as possible? If you could snap up a 1m+ influencer at a CPM of 3.9 - why would you bother dealing with a number of influencers and higher comparative prices? As discussed previously, reach should be adjusted for geographic and demographic relevance. In addition, a campaign with multiple influencers will create a larger pool of content, allow you to test different approach-es in terms of target audience and messaging. Through audience overlaps, you may hit consumers more than once with your advertising, creating more buzz around your brand and also have higher chances of getting some earned media in addition to your paid posts.

C P M P I T F A L L S

Adding CPM to your budgeting calculation will definitely

get you started more easily on launching a realistic and well budgeted influencer marketing campaign. The higher your target CPM, the easier it will be for you to reach and beat your target reach. But there are various reasons why the CPM you set for your campaign based on ‘’market’ rates may not achievable:

1. Industry vertical As mentioned previously, luxury fashion bloggers, celebrities, mum bloggers and generally any influencer with an agent will be working at a premium to the market CPM

2. Your brand For well-known and established brands it’s much easier to negotiate a rate close to the market CPM. Often influencers see working with a well-established brand as mutually benefi-cial in terms of their personal PR. Working with a global brand is perceived as a stamp of approval and acknowledgment.

3. Your campaign guidelinesOften, very often, massively underestimated or even com-pletely ignored. The creative direction and in particular the level of branding required on your campaign has a huge

Made by ZINEwww.zine.co

Twitter: @zineco_officialFacebook: @zine.co.officialInstagram: @zine.co.officialLindekdIn: ZINE

SALESJON LAWFORDjon@zine.co

MARKETING/PRMAEVE SUGRUEmaeve@zine.co

7

BUDGETING YOUR INFLUENCER CAMPAIGNS

CAMPAIGN BUDGET FORMULAS OVERVIEW

impact on cost/CPM. Influencers expect to be compensat-ed extra for posts that will stand out as blatant adver-tising, that is, if they agree to such guidelines in the first place.

Since the last point is playing such a big role, yet is so rarely brought up, we will dedicated an entire blog post to the topic of heavily branded vs lightly branded vs hardly branded in our next report.

8 8

B R A N D S A C H I E V E M O R E - W I T H Z I N E

W W W . Z I N E . C O