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Opinion

Paying the Price: Working to Close the Influencer Pay Gap

The global pandemic thrust the industry’s chaotic payment structure back into the spotlight when brands paused or stopped their campaigns. The pandemic has also resurfaced realities about a gender pay gap. In light of the #BlackLifeMatters movement, we are also hearing public complaints of a racial pay gap. Let's take a detailed look at how much money influencers should charge brands for their work and what brands should offer.

The scale and speed of the COVID pandemic, in addition to the collective enlightenment around racial injustice, have shone a light on the persistent inequalities in influencer marketing in particular—sobering stuff. But also, a rare opportunity for brands and companies to hit the reset button by making cultural relevance a growth driver.

We might all be living through one of those special historical moments where brands can rise to effectively serve their consumers while also playing a crucial part in solving global issues of inequality.

The pre-COVID advertising, marketing, and general communication’s universe were, without doubt, far from perfect. Many of us surely recognised diversity issues regarding gender and race. But perhaps we were only silently aware because after working for years at our brands, or agencies, or marketing firms it was all par for the course. Nothing out of the ordinary. Systemic.

One of the major transgressions the unequal pay of influencers. 75% of influencers are women—dominating the field from fashion, food, and entertainment to travel and technology. Yet numerous studies reveal a rising pay gap between women and their male counterparts. Men, on average, earn 7% more for a promoted post on Instagram. The gap widens with an increase in follower numbers when we compare male and female influencers. IZEA reports men earn 48% more than women in higher influencer tiers like mid-tier (150-500K followers) and macro influencer (500K-1m followers) brackets. 

One reason may be simple supply and demand. Competition among female influencers in almost every tier is highly intense, especially in the micro category. As a result, content creators tend to lowball their rates and/or allow brands or agencies to exploit them. There’s also some anecdotal evidence that men are inclined to be better negotiators when it comes to rates.

But the larger point here is the influencer marketplace has no regulation and little constraint where payments to content creators offering similar deliverables can vary wildly. And since almost all influencers are contractors, it will continue to be an open market.

This becomes painfully true, when we look at yet another pay gap that resurfaced during the past months — the racial pay gap.

“We don’t have the budget, but we would love to gift you”

Black Influencers have long complained that they have been shortchanged by brands and are paid less than their white peers. Lack of transparency from brands and agencies makes it hard to prove. But more and more black and other influencers of colour are publicly speaking out about systemic racism within the industry.

Often, they’re simply not even considered for campaigns, and when they are, observers can’t help but notice how few are included. One is left with the impression the brand’s objective is to include some token representation rather than to genuinely embrace a diverse core creative. 

Conversations with influencers of color reverberate with stories in which they’re offered gifts or “brand exposure” in lieu of the cash payments their white counterparts receive—counterparts, by the way, who oftentimes may have less engaged audiences or fewer followers. White teams at agencies and brands are so focused on white influencers for their campaigns that they’ve unwittingly created a system that excludes blacks. You see, if you’re only deriving information from a whitewashed data set, how do you even begin to consider the value of black data as you evaluate benchmarks for future projects?

As real opportunities for black influencers dry up, they leave the business. Consequently, there are fewer content creators available to engage with communities of color. For brands that means missing out on the $1 trillion dollar buying power of Blacks in particular and potentially the $3.9 trillion dollar buying power of the country’s racial & ethnic minority in general. 

A new Instagram account called the Influencer Pay Gap is generating chatter. On the account, influencers anonymously share the fees and offers they’ve received from brands. The account even gets information from marketing managers—the very people who are responsible for conceiving, managing, and executing campaigns. One professional who represents influencers of all races protested about “insulting” offers brands made to Black and POC influencers.

Shockingly, digital creator Jackie Aina even talks about what influencers disparagingly refer to as the “Black Budget”, the open secret that indicates there are two profoundly different pay structures—unmistakable and as clear as black and white. 

Change is inevitable

Two unions recently formed in the UK and in the US to protect the rights of influencers – particularly those of influencers of colour, whose content has become increasingly critical to brands

Influencers are small but potent businesses that anchor the digital economy. Their compensation should reflect that across both genders and ethnicities. Brands are clearly exploiting the deregulation of the current market to the detriment of influencers. As more discriminating influencer marketing tactics come to life, the need to organise and understand an influencer’s worth and consequently compensate him or her accordingly is necessary. Education about budgeting and rate setting is paramount.

What goes into an influencer campaign budget anyway?

As the industry matures, an influencer’s follower count is no longer the only criterion that attracts brands, or nails that contract. There’s a bigger picture here. Mature brands want influencers who genuinely resonate with the brand’s sensibilities and their target audience.

Unfortunately, brands often tend to speak only to prospective white consumers even when significant numbers of both their current and potential consumers are people of colour. If a beauty brand only collaborates with white female influencers even though 25% of their customers are POC it will risk alienating those customers. People of colour know when they’re not being addressed. Are brands aware when they’re not engaging them? Can they really afford to miss out and build brand equity for a diverse segment of their customer base? 

Depending on how the campaign is structured, fee tiers should correspond with influencer category tiers. We’re talking nano, micro, mid-tier, macro, mega and celebrity influencers.

Since the influencer represents the brand, a few things to consider, of course, are the number of followers and their audience demographic, how authoritative they are in their respective field, and channels to ensure their content is authentic. The influencer should have a voice within his/her community to ensure consistency of communication. Additional key points are engagement rates, brand alignment, frequency of posting, quality of content, organic vs sponsored content ratio to name a few.

While there are no set pricing standards, rate cards provided by influencer platforms have been published over the past years varying widely. Considering the amount of work that goes into creating a high-quality post, there are a few pointers that serve as a fair rate benchmark for a single static Instagram post:

1-5K Followers – $50-$300

5-10K Followers – $100-$500

10-25K Followers – $500-$800

25-50K Followers – $800-$1500

50-100K Followers – $1500-$2000

100-250K Followers – $2000-$6000

250K-1M Followers – $6000-$10000

1M+ Followers – $10K+

This is just a starting point as a lot goes into pricing, such as the number of deliverables, resources needed to produce the content like hired photographers, materials, timeline, exclusivity, usage, whitelisting, boosting amplification and dark posting, revisions, etc. Some influencers have their set rates, which may be higher than the above, but all those things are mostly factored in.

How to structure an influencer campaign

Again, it all depends. Let’s talk hypothetically: a brand has a budget of $25K for a micro-influencer campaign with varying follower counts between 10 and 80K. Deliverables are one static Instagram feed post, one Instagram Story post 2-3 frames including Swipe-Up link, and one Facebook post with a different photo that the Instagram post.

As already noted not every influencer can be treated equally based on the follower number. Also, you might want to put 5K aside for amplification. Left with 20K to spend on influencers, you now need to calculate how much you would allocate for each individual person. Some of them might have set rates that are not negotiable. They might be bigger than you expected. Then there are really just two options: You really want to work with this creator because he has the right followers and great engagement. Then pay the fee by adjusting the budget for the rest of the influencers or I walk away and look for somebody else. But be always ready to negotiate.

A helpful approach here is to make a list of desired influencers and approach each influencer with their rate and then select the ones that make sense for the entire budget. If an influencer comes back with a really low rate, be fair, and pay what they are actually worth. The suggested prices above might help.

When budgets are being negotiated, everybody should walk away happy – both the brand and the influencer. Treat an influencer like you want to be treated yourself. That includes fair prices. You just might reap greater rewards.

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