Social Media Influencer Marketing is one of those new digital marketing practices that many people are aware of, but very few actually understand or have tried first-hand. As someone who is passionate about gathering information on the topic, I’ve spent the past three years taking part in hundreds of influencer marketing campaigns as both a marketer and an influencer, as well as speaking to countless fellow enthusiasts about the main issues surrounding our work. One issue that never fails to come up is pricing.
What is a fair price to pay for an Instagram post? Is there a way to reliably predict the traffic or sales that an Instagram post will generate? How can it be measured? How do you find the influencers that create the most valuable content?
Although we’re nowhere close to making pricing for an Instagram post a predictable science yet, there are objective and comparable metrics you can evaluate that will give you a better estimate of potential traffic or sales to be driven by an Instagram account’s promotion. A simple and effective way to assess an Instagram’s potential value is to use the following formula:
An Instagram’s Potential Value = Engagement Rate + Follower Growth Rate + Follower Demographic and Lifestyle match — Sponsored Post Promotion Rate
Here’s how it works:
The most efficient and relatively objective way to evaluate an Instagram account’s potential value is by measuring its engagement. Why? Out of all the data points that can be measured on an Instagram account, engagement is the most reliable and easily comparable indicator of how much people care about the content that an account is publishing. Since there is no way to measure people’s feelings, measuring what percentage of a user’s audience (its followers) cares enough about what it has to say to engage with the content being presented (aka liking the photo) is the next best option.
How to measure: A simple way to calculate an Instagram’s engagement is by measuring the average number of likes it receives in posts 4 through 10 and then dividing that number by the account’s total number of followers.
The higher an account’s engagement, the more likely it is that one of their posts will generate traffic or sales because a higher percentage of the people who are looking at the post are actually paying attention to what is being communicated. Hence, it’s the best first-measure to evaluate an account’s potential value.
How to evaluate: Although there’s not much reliable data out there, according to Digiday, engagement rates below 0% are considered LOW, rates between 1–5% are AVERAGE, 5–10% are ABOVE AVERAGE, 10–20% are GREAT and anything above 20% is EXCELLENT.
Tools to use: The most simple, fast and free way to find this data by measuring it yourself through a web browser or the Instagram app. With the ability to hover over posts on your web browser to quickly see the number of likes it received, making the calculation won’t take more than 30 seconds. Plus, in the process you’ll have the opportunity to visually identify if that account’s visuals and content are the right fit to promote your product or service.
How to apply the data: Everything else held constant, you should evaluate the likely return on your investment based on the engagement rate of the account and how it’s price compares to the price of other accounts in a similar follower range. The higher their engagement rate, the more they are worth compared to other accounts with similar audience numbers.
Let’s say you’re planning to launch an influencer marketing campaign with Instagram accounts in the 20K follower range. You reach out to four different accounts, with different engagement rates and you received the following prices for each (see table below). Which one should you invest your money in?
FOLLOWER GROWTH RATE
Now that you’re evaluating how you spend your $$ based on an Instagram’s engagement rates, you should also take a look at account’s follower growth rate to get a better idea of how much value that account will continue to create in the future, thus giving it more value now. The higher the organic growth rate, the higher the likelihood that an account will multiply its audience relatively quickly and increase its worth in the future.
Please note that I say organic growth rate: There are various tactics someone can use to artificially boost their account’s growth rate. Having an above average growth rate with a stagnant or below average engagement rate is usually an indicator of that. Paying for promotion with an account with those type of metrics isn’t necessarily a bad thing, because more people will be seeing the content in the future but you should be wary of paying top dollar because it’s very likely that a percentage of their followers will be bots or people who are less engaged with the content, since they didn’t gain it organically. In general, high engagement rates usually correlate with high growth rates.
How to measure: To find the follower growth rate, you take the difference in total number of followers an account has today minus the total number of followers it had one month ago and divide that number by the total number of followers it had one month ago.
The higher the growth rate, the higher return you’ll receive if you pay for promotion today because not only is the price likely to increase in the near future, but you’ll also be able to provide the content creators with more value. Early in an influencer’s career, the money earned from a paid sponsorship has a much bigger impact, since at this point it’s less likely people will value their work. Building a great relationship with a high growth and high engagement Instagram account, early in their career, is definitely something to aim for.
How to evaluate: There’s not that much data about this out there, but according to Influencerdb.com, a follower growth rate lower than 0 is rated as VERY POOR, from 0 to 2.5% as POOR, from 2.5–5% as AVERAGE, 5–7.5% as ABOVE AVERAGE and anything above 7.5% is EXCELLENT. As a general rule of thumb, accounts with high engagement and high growth rates are the most valuable, high engagement but low growth rates are the second most valuable, low engagement but high growth are the third most valuable and accounts with low engagement and low growth are the least valuable.
Tools: My favorite tool to find this information is Social Blade’s “Total Instagram Followers” graph shown whenever you search for an account. It’s simple, free and won’t take you more than a minute or two.
FOLLOWER DEMOGRAPHIC/LIFESTYLE MATCH
Discovering an Instagram with great engagement and a high growth rate means nothing if the majority of its followers are spanish-speaking middle-aged men located in Europe and you’re trying to promote a female-focused high-end product that can only be bought in the USA. That is why it’s very important that you also evaluate if an account’s follower demographics and lifestyle are a good match to what you do. The better the match, the higher the likelihood that they’ll find your product or service relevant enough to take action (traffic/sales/growth) once it’s promoted on an account’s feed.
How to measure: There are no tools out there that can give you an account’s demographic information at an accessible price (most services that claim to offer this type of data are usually pricey and not always reliable), but the information can be found relatively easily and intuitively. More often than not, follower location, demographics and lifestyle are identifiable from taking a quick peek at the account’s content and the people who like and comment on its posts. If you have absolutely no clue about the people who follow a specific account, just ask someone who does. Feedback from people who are directly familiar with an Instagram will likely be accurate when describing it’s followers. Using an intuitive process like this one is far from perfect, but it’s your best bet given the lack of tools out there that can give you reliable data.
How to evaluate: Although you won’t be able to get exact info on an account’s follower demographics and lifestyle, there are tools you can use that can give you an estimate of what percentage of those followers aren’t real. These days, most (if not all) Instagram accounts have “bot” followers but some have a much higher density of bot or fake followers than others, and those are the ones you want to avoid spending your money on.
Tools: Follower Check takes a random sample of 150 Instagram followers for a user and calculates a score for each follower. This score is based on profile completeness and ratio of followers to followed. They use these scores to determine whether any given user is real or fake. Of course, this scoring method is not perfect but it is a good way to tell if someone with lots of followers is likely to have increased their follower count by inorganic means.
How to apply the data: A simple way to turn this into data that you can use with your other metrics, is by applying a 3 option rating system. Use 0 for a LOW follow demographic/lifestyle match, 1 for an AVERAGE match and 2 for a HIGH match. All accounts with high bot density should also be rated as 0.
SPONSORED POST PROMOTION RATE
Last but not least, an Instagram’s sponsored post promotion rate is a metric people usually overlook but it can be a great predictor of how your promotion will perform, despite its engagement and growth numbers.
How to measure: Go through an Instagram account’s first 20 posts and count how many of those are sponsored posts. Divide that number by 20.
How to evaluate: Imagine watching a TV show that shows you an ad every 2 minutes (not too hard to imagine these days). You’re probably not going to enjoy watching it or care about its content as much as a show that focuses on giving you great, engaging content with sparse ads that are relevant to you, right? The same applies to Instagram accounts. The higher the amount of posts with sponsored content, the less traffics/sales each additional promotion will generate. An Instagram Influencer’s main currency is the personal connection and goodwill it shares with their audience. Every time an Instagram publishes a sponsored post that’s insincere or irrelevant to the Influencer’s content, its audience’s personal connection and goodwill is slowly but surely depleted. If you can, I recommend avoiding partnerships with Instagram Influencers that aren’t conscious about how their audience perceives their sponsored posts. Everything else remaining constant, they tend to drive less per promotion in comparison with someone who has the same follower and engagement count, but a lower sponsored post rate.
Okay, now that you know the most relevant and effective metrics to evaluate, let’s try out a simple example that will give you a better idea of how to use them in your next influencer marketing campaign. Imagine you’re planning to launch a small campaign with Instagram accounts in the 10–15K follower range. You reach out to nine different accounts, measure their potential value metrics and you received the following prices for each. Which one should you invest your money in?
As I mentioned before, these metrics are still far from being an exact science, but compared to most subjective evaluation processes currently being used in Social Media Influencer Marketing, they might be a step in a more scientific direction and help you make more informed and objective decisions about where you spend your money.
Try it out and let me know what you think?