Free Product Exchanges
As a creator should you do them?
The Free Product Exchange, one of the original building blocks of the influencer marketing industry has come under fire recently as more and more brands shift to the strategy. Over the last 5+ years, I have been lucky to take part in thousands of collaboration negotiations on both the brand and creator sides. I have seen every imaginable compensation structure but the one that has remained the most popular is the free product in exchange for some type of social content.
In the early days of influencer marketing, free product exchanges were rightfully popular as so many new brands were testing the waters and didn’t really know what the results would be. As the industry has matured (on track to be worth $15b+ in 2021) why haven’t the brands moved away from this type of compensation?
We dive into why brands favor this strategy and how creators can maximize their value during negotiations.
Brands Love Giving Away Free Product
For most brands giving away free products is their preferred method of influencer compensation. Why? Because it’s easier and cheap. It’s really that simple. As a creator, you might talk to 3–4 brands/agencies per week depending on your personal brand size or the time of year but on the brand side, they are talking to hundreds of creators every week.
As the creator economy has grown, the overall number of creators has swelled to nearly 50 million. So for a brand focusing on influencer marketing that means they talking to thousands of influencers every month trying to find the best ones to represent their brand. The example I like to use here is to imagine a tech recruiter trying to fill a new job opening…they have to sort through hundreds of possible candidates and the more candidates they have, the less time they have to spend talking to each one.
Most talent managers at these major brands or agencies would love to talk/negotiate with every single talent that they’re interested in but it’s not possible nor efficient. This is where the free product comes into play. It’s much easier for the influencer manager (most brands that don’t outsource their talent management to agencies only have 1 to 3 people on their influencer marketing team) to offer free products in exchange for a couple of stories on Instagram then analyze which posts perform the best. After brands analyze the campaign, most will reach out to the top-performing influencers and look to run another campaign.
How to Negotiate Free Product Deals
With more and more brands using free product exchanges as a key tactic to acquire influencers at scale, how can you as a creator move past this and secure cash payments for your content?
You have a few options:
- Don’t accept free product exchanges. Depending on where you are in your influencer career or personal brand, it might not make sense to accept free products in exchange for content. If that’s the case you can always counter their free product offer with one of your own asking for cash compensation, just be prepared for the brand to move on to the next influencer.
- Ask for an affiliate link. One of the main gripes we hear from influencers that accept free product deals is that their content drives thousands of dollars of sales for the brand and they don’t see a penny of it. To overcome this just ask for an affiliate link to include in the post and/or your link in bio so you can receive a percentage of every sale that you drive for the brand. Most brands will honor this request.
- Ask for a CPA deal. CPA (also known as cost per acquisition) is slightly different than regular affiliate links in that you get paid a flat rate per sale/download/lead/etc. Many brands that don’t have traditional shopping experiences like game or app companies will be familiar with this model and honor your request.
- Ask for a campaign report. Not all brands will want to honor your request to receive a cut of each sale but you can ask to see some type of campaign performance report. This will help you understand what type of products/services resonate with your audience and give you leverage with the same brand or similar brands in the future.
- Follow up and offer more content. Without receiving some type of affiliate or campaign report it may be hard to know how your content performed for the brand but it never hurts to follow up and find out. As I mentioned before, most brands have very small influencer marketing teams and you initiating the communication will go a long way to securing another deal.
When Free Product Make Sense & When It Doesn’t
Hopefully, now you have a better understanding of how free product exchanges work from the brand perspective and why they use them to compensate influencers but should you accept them?
At FamePick we are not very fond of free product exchanges and that’s one of the reasons why I wrote this article but not all of them are bad deals. Free product campaigns can benefit many different types of creators.
Here is what we recommend:
New Creators
If you are a new creator or influencer looking to secure your first paid collaboration, accepting some free product exchanges are a great way to show brands that you can produce branded content. Unless brands are specifically looking for brand new influencers, they want to see what type of branded content you have made in the past. Just remember to read all the details, not all free product offers are the same so make sure the value of the product is worth your time.
Up and Coming Creators
If you are an established creator that has done a few free product exchanges already we recommend that you are selective with future offers. Accepting and posting too many deals will draw red flags from prospective brands as they don’t want to see an IG feed full of past product promos. Look for bigger brand names, especially ones that resonate with your audience. For example, let’s say you are a fashion influencer that accepted some free product from a boutique clothing shop, you should now use that content and pitch bigger clothing brands like Shein, Fashion Nova, or American Eagle.
Well Established Creators
If you are a veteran creator with multiple free and paid collaborations under your belt, you should not be accepting free product exchanges. Use your previous campaigns as leverage when negotiating so you can show brands that they do not need to ‘test the waters’ first and that you have proven you and your audience can drive results. The only exception here would be if your ‘dream brand’ comes along. A ‘dream brand’ is the one you have always wanted to work with and you know your audience will love it.
