The State of the Brand Deal
We surveyed and interviewed over 100 representative professional creators about brand deals to understand what they struggle with and how they decide what to charge.
The open secret in the world of online video is that you probably can’t make it with YouTube rev-share alone. Absolutely, those dollars are vital, and depending on the kind of content you make, they can be a huge piece of your income pie.
But it’s rarely the whole pie, and for many it has been shrinking. Another key slice of that pie is the brand deal. Basically, instead of an advertisement running on top of, beside, before, or after your video, a creator includes the advertisement or endorsement in the video they make.
Unfortunately, these deals are often intentionally mysterious and difficult to negotiate and creators are legally prevented from disclosing the terms. As a result, many creators, especially those trying to grow this part of their business, remain in the dark–confused and frustrated. With this study, the ICG is hoping to shed some light on a confusing topic, and highlight a few suggestions for creators and brands.
Brand Deals Generally Take One of Two Basic Forms
The Full Integration
The creator and the brand work together to make a video that is, in its entirety, an advertisement for the brand in your style. These are, in the best cases, collaborative. But it can sometimes be difficult to come to a place that works for the brand (or their agency) and the creator equally.
When it does work, it works very well.
But, authenticity is often the most valuable part of a creator’s relationship with their audience, so they have to be careful not to mess it up.
The Sponsor Mention
Also called “podcast-style”, “endscreen callout” or simply “sponsorship” this is when the creator takes a break from your video to tell everyone that the video was “made possible” or “brought to you by” a sponsor. The creator shares the the sponsor’s message, but it isn’t integrated into the rest of the video. These are much easier to pull off for both creator and brand, but pay lower rates.
Sponsor Mentions tend to be advertisements for services or products that keep close track of conversion rates and will stop working with creators whose audiences don’t immediately buy the advertised product. Those who sell effectively, however, can work to raise rates.
So Let’s Talk About Rates
There is some resistance to discussing this because so many factors affect rates and so there is no rate that fits every deal. We do not want to give ammunition to brands saying that they are being over-charged, but we feel that we need to share this information because we have heard so much confusion from the many creators who have no representation and no recourse when a brand makes an offer.
According to our survey, rates vary wildly, and many creators are able to (and should) charge significantly more, but there was significant clustering in a fairly well-defined bell curve.
Cost Per View (CPV) is typically based not on delivered views, but on an estimation of future viewership. That estimate is based on average views of 5–10 recent videos in their first 30 days after upload.
So, if your last 5 videos received around 10,000 views in the first 30 days after upload, and you’re charging $300 for a sponsor mention, that’s a $0.03 CPV. Because creators should be paid on upload (not waiting to see how many views the video gets) future viewership is estimated based on past performance.
On the high end, a creator with 10,000 average views might have a full integration brand deal worth more than $18,000 with a CPV of $1.80. On the low end, that same creator could do a sponsor mention at a 0.2 cent ($0.002) CPV and be paid $20.
What accounts for this tremendous range?
- Creators that bring a unique skill to a video (i.e. music production or motion graphics) and have a proven track record of great brand deals have much higher rates.
- Creators that have desirable audiences (adults in affluent countries) got higher rates. As did creators whose content focuses on important consumer products (like automobiles). The lowest rates we saw were from South American creators where average incomes are much lower.
- If you have a smaller audience, rates may be all over the place, possibly because these creators are still learning what to charge or have varying levels of experience doing brand deals. Both the highest and lowest rates from ICG members replying to the survey were from channels with fewer than 5,000 subscribers.
Note: We asked creators for their “average” rates for brand deals, so this does not reflect the highest and lowest deals on individual channels.
Even after doing a bunch of deals I still always feel kind of cheated. We are not exactly cheap but I still feel that we don’t know what we are worth and other people get more.
— Educational Content, 2M+ subscribers
How Do I Know What to Charge?
Many creators would like to see standardized rates, but in our conversations with creators, we find that they also say there are no standard audiences, standard videos, or standard deals.
So, instead, we took what we learned from these interviews and put them into a list of suggested best practices based on what top creators and managers are selling and how they sell deals for more:
Fit: Understand how your strengths align with the brand’s goals — some campaigns are about general brand awareness, whereas others want a specific number of views or even clicks / download conversions. If you have a skill or demographic the brand wants, use that to negotiate.
Competition: Creators with niche channels or other qualities that make them unique can often increase the amount they charge due to scarcity.
Workload: Carefully consider the amount of work a campaign will be. Full integrations with brand feedback can easily take five times longer than your average video. Tell the brand how much time you expect to spend and charge accordingly.
Creative Freedom: Working from a set script can be stifling unless you have a format that allows for burned-in sponsor mentions. Full integrations can be particularly messy when a brand might require approval of the final product. When this is required, creators often charge more.
Review: Creators are starting to contractually specify a set number of revisions and then charge if the brand goes beyond that for extra review.
Social Posts: Campaigns often include additional promotion for the campaign across other platforms, but past a limited number of posts, they are an opportunity to up-sell a brand. Different platforms (Instagram) may be worth significantly more than others (Twitter (sorry Twitter)).
Benefits: Creators are sometimes (but not always) willing to charge less if they receive product, experiences, or even the prestige of working with a big name and cool brand. However, creators are wisely moving away from accepting things like product and gift cards in lieu of payment entirely.
Package Deals: If you find a productive and well-matched relationship, brands and creators often prefer working on multiple videos for a campaign, or developing an ongoing ambassadorial role. In these cases, creators will often create packages with slight discounts.
Communicate: Tell the brand what you can and can’t do and stick by it. If a deal can’t be worked out that doesn’t mean you failed, it just means that the deal isn’t worth doing for either of you.
Keep Up to Date: Your audience will change, your channel will change, and your relationships with brands will change. You can (and should) increase rates as your relationship progresses. And you should also be in communication with other creators about their strategies and rates.
I feel like my numbers have changed so much, so fast, that it’s hard to me to stay up to date with valuing my channel for integrations.
— Vlogger, 500k+ subscribers
It may not work for everyone, but a rate sheet can be a useful tool to start conversations with brands, cutting down on the back & forth or weeding out the deals that aren’t going to be in a reasonable range. Create this document based on understanding of what you are bringing to the table, and some knowledge of industry average rates from this article and talking with creators or industry members. With the help of Sarah Weichel, the ICG has created a sample rate sheet here. (to make a copy for yourself, click “file” and then either “make copy” or “download”)
We also suggest creators look into services like Social Bluebook and Famebit as a tool for gathering rates and connecting with sponsors.
Creator Pain Points
Negotiating a rate is only a tiny and early piece of what goes into a successful brand deal. Full integrations often involve extensive conversations between the brand or agency and the creator. This can involve input on the script, production, and even final product. It isn’t unheard of for a brand to walk away after the video is done but before it’s uploaded.
The hardest part? Getting the brand to trust that I know what I’m doing and let me sell the product in a way that’s authentic to my audience
— Vlogger, 1M+ subscribers
Unsurprisingly, it appears that creators like creating, they do not like negotiating contracts or taking notes from corporate marketing teams.
“Have you had a hard time getting paid?” was a last minute addition to our survey. We had been told by a few creators that brands had, at the last minute, decided they didn’t like the video and, even though the video had already gone online, refused or delayed payment.
We expected something in the low single digits, 29% is very discouraging.
I still haven’t been paid $30,000 for a brand deal because the company simply never got back after the video was uploaded. Everyone at my MCN acted like it was no big deal.
— Vlogger, 1M+ subscribers
How are Deals Happening?
Nearly 30% of creators who responded to our survey had never done a brand deal, and of those, 70% wished they had been able to. About half had never had the opportunity, while the other half just hadn’t had the right opportunity.
By far the most common source of a brand deal is the brand themselves (or their agency) reaching out directly to the creator. 75% of respondents who have done brand deals reported that at least some of those had come directly from the advertiser.
The second most common path was reaching out directly to the brand, and coming in at #3 were marketplace services like Niche, GoSnap, or Famebit.
Marketplaces like Famebit have been a Godsend for someone of my size.
— Product Reviews, 25k subscribers
Conclusions and Recommendations
Brand deals are a vital way for creators to monetize their work, but great integrations are hard to come by and even harder to feel great about, especially when considering the amount of work that goes into negotiating the rate, communicating with the brand, and creating a final product everyone is happy with.
Developing a productive relationship with a brand is much easier when they have time to spend with a creator rather than trying to work with dozens or hundreds of creators at a time. Of course, that also means the more productive deals go to the larger channels.
While smaller channels need the extra income, they are the most likely to end up promoting products they don’t love or being pushed into creating content that doesn’t feel natural on their channel.
When you’re used to being honest with your audience but you don’t like the product, it comes down to how badly you need the money, and that’s not a good feeling
— Beauty Creator, 20k subscribers
Unfortunately, we don’t currently have enough data to tease out more patterns regarding audience demographics, country, race, and kind of content. We hope to repeat this survey in the future as our membership and partners in the online video industry grow in order to investigate further.
Creators, a rate kit is a good place to start. It will of course be negotiable, but having a firm starting position will allow negotiations to move much more smoothly, or to end before everyone involved wastes a bunch of time.
While it is impossible to set standard rates when every deal is different and is informed more by demographics, audience engagement, and technical skill than absolute reach, we can say that two cents per view for a full integration is not enough.
The ICG suggests
- Guild members should be paid no less than 5 cents per view* for full integrations.
- Guild members should be paid no less than 1.5 cents per view* for sponsor mentions.
- Contract terms that indicate payment should be delivered on upload and limit the number of revisions.
*by “per view” we mean per expected view after a 30 day period based on an average of 5–10 videos that indicate past performance.
We expect the vast majority of deals to significantly exceed these minimums.
We are outlining minimums only as a guideline to those who are confused and unsure of when they are or are not being taken advantage of. It should be noted, that these minimums are 50% of the median rates. We at the ICG are concerned about hearing guild members ask whether they should do a brand deal at 0.2 cents per view. No, you should not, and a brand should not be making that offer.
We strongly encourage cooperation from brands and agencies in not dropping below these minimums. We know that many campaigns, especially sponsor mentions, are built for conversions and not brand awareness, thus brands will not spend more than their marketing budgets allow. But we think it is necessary for a line to be drawn.
Finally, if you have had problems receiving payments from brands for brand deals and are not receiving support from your representatives, please reach out to the ICG directly.
The Internet Creators Guild is a non-profit organization that advocates for professional creators through collective representation and action. We rely on membership dues from creators for funding to sustain our small team, volunteer board, and growing community. To support us as a member or learn more, visit us at internetcreatorsguild.com