The truth about influencer marketing: Why pricing remains a murky world

When personal care giant Johnson & Johnson tapped style influencer Scarlett Dixon (aka Scarlett London) to promote its Listerine Advanced White mouthwash in early September, the company nor Dixon could have imagined the social media outrage that followed.

On Instagram, Dixon posted a so-called natural picture of herself surrounded by heart balloons, strawberries and pancakes and emphasized that the aforementioned mouthwash was part of her normal morning ritual. Her caption read: “My morning routine is now live on YouTube — and while I don’t show you my real bed hair (trust me, it’s not pretty), I do give you a little insight into how I start my day in a positive way. Head over to my stories for a swipe up link — and let me know what you think! It features my morning habit of rinsing with Listerine Advanced White to help whiten my teeth.”

Critical responses followed, including one that yielded nearly 25,000 retweets and 111,000 likes on Twitter, which lambasted Dixon’s “normal morning,” calling out its fakeness. “Instagram is a ridiculous lie factory made to make us all feel inadequate,” said Nathan Collins.

Though Johnson & Johnson didn’t respond, Dixon, in turn posted on social media and said she had received “death threats.” “Yes, I do adverts here, but only with brands I genuinely use and would spend money on myself,” she said. “I personally don’t think my content is harmful to young girls but I do agree Instagram can present a false expectation for people to live up to.”

While more and more brands are turning to influencer marketing to sell products — both paid and unpaid, the question of authenticity becomes increasingly important.

Even those who don’t play in the paid influencer space, like makeup mogul Huda Kattan, who has never accepted a dollar for sponsored posts and doesn’t pay the social media stars that she hires for Huda Beauty, raises questions around who should be paid and for what.

Though Kattan has set a standard around price and realness, not all brands and influencers agree. And over the course of interviews with 25 influencers, brands, agencies, managers and agents, a muddled picture has emerged of how influencers are paid, what the standards are and if they’re paid at all.

Big brands aren’t absolved. Shiseido, which recently announced a giant influencer campaign with 200 influencers, isn’t paying most of them. The brand did not reveal who it was paying. Shiseido also partnered with market research and product review platform Influenster to seed its Influenster product boxes, known as VoxBoxes, to 2,500 hyper-targeted beauty enthusiasts. Those makeup junkies are not paid to review the product, while Influenster is. Both Shiseido and Influenster did not disclose their terms of their agreement.

It’s a problem that has led some outspoken influencers to push back. Bryan Grey Yambao, better known as Bryanboy, is now a media powerhouse who sits front row at fashion shows and and boasts 659,000 followers on Instagram and 523,000 followers on Twitter. In a recent tweet, he said a lot hasn’t changed: “With no compensation, they want me to: take time off to go to a fitting to borrow clothes I won’t keep, spend my own $ to go to and from the fitting, spend my own $ to go to and from show, be photographed and be seen wearing their clothes for no money, post on my social.”

Payment problems

Influencer Cassandra Bankson, who boasts 832,100 subscribers on YouTube and 43,800 on Instagram, regularly works with beauty brands like Hourglass and It Cosmetics, but is selective about who she partners with, making sure they “make sense for her audience.” The one thing she is sure of is this: She’s not going to do it for free.

Bankson prices social support packages between $1,200 and $2,900, YouTube posts upwards of $3,000, exclusive videos with social support around $6,500 and multiple series upwards of $10,000. These rates not only include Bankson’s time, but the rates of her team, management, travel, props required and rental spaces.

While there are no real standards, companies have benchmarks. At Socialyte, an influencer relations creative agency and content production studio, standard rates are about $1,000 for every 100,000 followers — however, it exclusively works with larger influencers.  The price also varies based on engagement rate, reach, quality of content, how in demand the talent is and how busy they are with other projects.

One medium-level influencer requesting anonymity says pricing is even more muddled and could vary from $500 to $10,000, depending on the type of content created and how big the brand is. Three other medium influencers suggested that the going rates for single Instagram posts also depended mostly on follower counts. For instance, influencers within the 100,000 to 140,000 follower range commanded anywhere from $1,000 to $1,400 for a single post, while those with above 250,000 followers could ask for at least $2,500 a post.

“No one is expecting you to sell a product out,” says one macro-level fashion influencer. “Usually a few sales is good enough. Brands care about the halo effect more.” This is in stark contrast to the outcry for real, measurable results sweeping marketing departments.

Talent management firm Rare Global’s Ashley Villa agrees. Villa, who represents lifestyle star Wendy Ayche (aka Wengie), with 1.6 million Instagram followers and 12.1 million YouTube subscribers, and beauty expert Kandee Johnson, with 1.8 million Instagram followers and nearly 4 million YouTube subscribers, never adjusts her clients’ rates based on expected conversion metrics.

“Of course, there are times when a foundation or lipstick sells out in minutes online when one of our girls talk about it on YouTube, but that’s because the products are linked directly in the video, but how do you measure if Wengie talks about something and that makes someone go into the store and buy? Our rates are firm and we don’t negotiate,” she says.

In a recent report, Launchmetrics found that 80 percent of fashion and beauty brands planned to use influencer marketing and planned to spend more on it. Only 41 percent of them said they always pay their influencers.

Some companies still prefer to trade on other types of compensation (free clothing, press trips, beauty products and the elusive brand association), and hope that influencers will pay it forward.

The engagement question

But many are also cognizant of the fact that follower counts aren’t a great way to necessarily measure worth. “Some influencers with 300,000 or 500,000 followers have a way worse engagement than I do, so brands are starting to think about how valuable those followings are,” says one influencer with a medium following.

There are attempts to do things differently. At Fohr, an influencer marketing platform, follower counts are barely looked at, with CEO James Nord saying he uses a proprietary “follower health” score instead.

“Brands tell my manager all the time that my rates are much higher than a lot of my peers and so are my pets’ rates, but I’m guaranteeing them real access to people who follow me and are obsessed with my world,” says one influencer who charges $3,500 per Instagram post — featuring her dog. “So, why wouldn’t I charge for that?”

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