An omnichannel marketing strategy drives more sales. Influencers in your niche can become a great source of business visibility. They can bring more traffic to your website landing pages and help you generate leads.

Finding the right individuals is a challenging task, and so is the budget division. Establishing creator partnerships is an important pillar of a diverse marketing strategy. YoY spending on influencer marketing is increasing. 

As per Matter Communications research, 69% of consumers trust influencer recommendations. To evade underspending or overspending, we will share thoughts on planning your influencer marketing budget in this blog post.

Importance of Budgeting in Influencer Marketing

‍

‍

Without planning the influencer marketing campaigns can fall short of expectations. Budgeting can help in effective resource allocation including influencer and content creation expenses.

Budget planning aids in creating a feasible and sustainable campaign. You can anticipate and get prepared for unforeseen costs like, software subscriptions, analytical tools, agency fees, etc.

It helps in measuring campaign performance and ROI. Realistic budget planning is the first crucial step towards long-term partnerships and significant returns. 

Influencer Marketing Cost Evaluation

Cost calculation is important in making a convincing influencer marketing budget. Here are some ideas to evaluate the overall campaign expenses.

Types of Influencers

‍

Influencers selection should be based on several factors like total audience, content quality, and engagement. They are generally divided into three categories.

Micro-Influencers

Influencers in this tier usually have a niche following between 10k to 100k. Micro-influencers are affordable marketing options and bring a high engagement rate. Their cost per post varies from $100 to $1000 depending upon their platform and audience.

Macro Influencers

Macro influencers usually have an audience of 100k to 1 million followers. You can expect a broader reach from such influencer partnerships. But they have a slightly lower engagement rate. They charge businesses and brands $1000 to $10,000 for one post. 

Mega Influencers

Top-tier influencers that have more than 1 million followers are considered mega influencers. It can be ideal for large-scale brand awareness campaigns. These expensive creators charge more than $10,000 for a post which may not be feasible for low-budget startups.

Content Creation Costs

Content is always king and a high quality should be maintained for ultimate results. Its cost should be thoughtfully counted in your influencer marketing budget. Here are some ideas you can consider in decision-making.

Photography Costs

The cost for professional photography can be estimated between $500 to $5000. Photographer experience, equipment sophistication, and shoot complexity are determining parameters.

Videography Costs

Video production is an expensive subject and can range from $1000 to $20,000. Video length, scenes, props, and other details. The post-production modifications and editing can put more burden on your budget.

Platform Specific Costs

Every social media platform has variable influencer marketing costs. We will break down the top three 

Instagram: The sponsored posts or stories can cost between $100 to $10,000. The visual appeal of an Instagram influencer is the biggest pricing factor. 

YouTube: Creators on YouTube charge between $500 to $50,000. The reason behind high fees is the cost of content creation which requires more effort.

TikTok: This platform is a home of entertainment and lifestyle-related influencers. Depending on their audience, you can expect $50 to $10,000 per post.

Related Read: Guide to Calculate Influencer Marketing Costs

Set Your Influencer Marketing Goals

‍

What does your business want to achieve with an influencer marketing campaign? This question should be clear in your mind. Here are a few things to consider:

Budget Alignment with Your Marketing Goals

‍

Clarity of goals is necessary for creating an ideal influencer marketing budget. The most common examples include:

Brand Awareness: If you are aiming for brand visibility through influencer marketing, it needs more budget allocation. Because you need to create compelling proposals to collaborate with macro or mega influencers for a broader reach.

Conversions: Such campaigns require a niche influencer with a highly engaged audience. Creators focusing on identical business categories bring a better conversion rate in terms of sales or sign-ups.

Engagement: Engagement campaigns should consider influencers having an interactive following. Your budget should align with the level of engagement (likes, comments, shares ) expected.

Determining KPIs and ROI Expectations

Influencer marketing efforts are dependent on several KPIs such as impressions, CTR, and audience engagement. Track these influencer metrics across platforms to determine the performance.

ROI expectations are linked with campaign cost and revenue generated. Calculating the CPA(Cost Per Acquisition) gives an understanding of campaign success. Data-driven decision-making improves performance and justifies investments.

‍

Related Read: How to Boost Your ROI with Influencer Marketing?

Factors to Consider While Creating Influencer Marketing Budget

To maximize the campaign's profitability, consider the following factors while planning your influencer marketing budget.

Audience Size and Engagement

A bigger audience may help get a wider reach that can be a good fit for brand awareness campaigns. For a high conversion rate, you need to identify the audience's potential, interest, and engagement.

Prioritize the influencers with a robust following of tier-1 countries (USA, Canada, Australia, United Kingdom). For local products consider the local influencers and evaluate their content performance.

Campaign Duration and Frequency

The duration of the partnership and content frequency affect the influencer marketing budget. There must be a clear agreement on the campaign timeline between you and the creator.

Clearly describe the number of posts required and the duration of collaboration. Then make necessary adjustments in your budget planning. Any mismatch can result in overspending which will directly impact the campaign budget. 

Rewards and Incentives

Once the ideal influencers are shortlisted, you need to specify your rewards and incentives. There are two popular types of influencer offer to be considered:

Monetary Offers:

These offers involve monetary compensation and fees that you will pay to influencers. Every creator has a medium in place to get payments like PayPal, Wise, and Payoneer.

Non-Monetary Offers:

Non-monetary incentives include discount codes, free products, event passes, and time-limited subscriptions. You can also offer exclusive discounts and giveaways for their audience.

‍

Keep both options on the table as per their interest and acceptance. A clear value proposition is mandatory for long-term relationships. 

Additional Costs

The additional expenses include agency charges, software subscriptions, and influencer content promotion. You need to spare some budget to boost the content published by the influencer.

Get an understanding of all the expected or hidden costs before starting the campaign. There should be some flexibility in your budget for unprecedented expenditures.

Steps to Create an Influencer Marketing Budget

Meticulous planning and execution of an influencer marketing budget are necessary to start a successful campaign. Here are a few steps to consider during the process. 

Research and Identify Influencers

Before starting the influencer research process, clarify your campaign goals and objectives. Take the edge of influencer marketing platforms like Phyllo to discover the best matching influencers.

Check their content format, audience demographics, and engagement rate before establishing a partnership communication. Negotiate the pricing as per your budget restraints to secure a good deal.

Allocate Budget to Each Influencer

Choose the budget for compensating the agreed influencers as per the commitments. Either through product gifting or real money, there should be a clear understanding. You can also use performance-based incentives to continue a long-term collaboration.

Allocate more budget to influencers with higher odds of conversions. Diversify your influencer marketing budget with a mix of influencers to reduce the risks. Offer more incentives to YouTube influencers due to their high content creation costs.

Monitor Performance and Make Adjustments

Once the campaign is kickstarted, keep an eye on the content performance. Use analytical tools for data collection and analysis. Evaluate your ROI for each campaign frequently and make adjustments if necessary.

Allocate more of the budget to the best-performing content types and influencers. Get budgeting ideas from current campaigns to implement in the future. Regularly track your progress and make required changes.

Influencer Marketing Budget Example

Here is an example of an influencer marketing budget to visualize the funds' allocation for your campaign. 

Total Budget: $10,000

Influencer Fees: $5,000

Micro-Influencers (5 influencers): $3,000

$600 per influencer

Each creates 1 Instagram post and 1 Instagram story.

Mid-Tier Influencers (2 influencers): $2,000

$1,000 per influencer

Each creates 1 Instagram post and 2 Instagram stories.

Content Creation: $2,000

Photography and Videography: $1,500

Professional photos and videos to be used by influencers.

Graphic Design: $500

Design assets such as banners or custom filters.

Platform Costs: $1,000

Paid Social Media Promotion: $800

Boosting posts on Instagram and Facebook to increase reach.

Influencer Marketing Platform Subscription: $200

Monthly subscription to an influencer management tool.

Campaign Management: $1,500

Agency Fees: $1,000

Fees for managing the influencer campaign, including negotiation and communication.

Reporting and Analytics: $500

Tools and software for tracking campaign performance.

Contingency: $500

Set aside for unexpected costs, such as additional content creation or last-minute changes.

Tools and Resources to Plan Influencer Marketing Budget

Use influencer marketing tools and other resources for an effective campaign budget. For a manual approach, use spreadsheets and other data management methods. Here are some options to plan and manage your influencer marketing budget:

Phyllo: It provides in-depth insights and influencer data analysis for better decision-making. You can get sophisticated data about audience metrics and engagement levels.‍

Influencity: It has built-in budgeting tools, campaign management features, and detailed performance reporting functionality.

Klear: With Klear, you can get helpful audience demographics, influencer pricing, and strategic budget allocation options.

Mistakes to Avoid Planning Influencer Marketing Budget

A weak budget plan with loopholes can bring management challenges to your business. Here are a few mistakes you should avoid while planning an influencer marketing budget. 

Underestimating Costs

Underspending on influencer marketing campaigns can compromise the rate and quality of conversions. Budget overruns are one of the common influencer marketing issues. You can tackle it with proper planning and execution of campaigns.

A tight budget can restrict collaboration with top-tier influencers. There should be flexibility in funds allocation for creators and content creation. 

Not Valuing Long-Term Relationships

An ongoing and long-term influencer relationship is fruitful for brands. It builds trust and authenticity among the audience. Consistency will help you reinforce your brand’s value and presence.

Influencers may reduce their prices if they see a long-term advantage. So you will be able to do more with those savings. Create a cost-efficient and flexible influencer marketing plan for sustainable growth. 

Frequently Asked Questions

How to Calculate Influencer Marketing Budget?

To calculate an influencer marketing budget, finalize your campaign goals and objectives. Then decide the influencer tier you want and content creation costs. Analyze the influencer content performance and engagement. Get an estimate of all indirect and hidden costs involved in influencer marketing.

What is the Cost Per Action in Influencer Marketing?

CPA is a term used in marketing to compensate influencers or publishers based on results they deliver like sign-ups, sales, and clicks. For example, a SaaS marketing manager pays influencers $200 for bringing 10 free trial sign-ups on its platform. The CPA in this campaign will be evaluated as $20.

What Is the Good ROAS in Influencer Marketing?

As per the Influencer Marketing Hub research, more than $4 revenue earned from $1 spending on influencer marketing campaigns is the ideal ROAS for marketers. However, there may vary depending on different business types, profit margins, and campaign setups.   

Wrap Up

Budget planning is necessary before investing money in influencer marketing campaigns.

Keep a check of all costs and resources involved in the process. 

Phyllo can also help you with influencer screening and identification. Sign up now to find relevant influencers with detailed content performance insights. 

‍