Incentive in the Influencer Industry

In 2020, influencers are all around us. Whether you work in the marketing industry or just use social media, you’ve felt the presence of influencers in some way or another. Maybe it’s been Instagram influencers offering personalized discount codes for savings at their favorite brands. Or Youtube influencers letting us play witness to product unboxings and reactions.

It’s no secret influencer marketing is a huge industry, estimated to reach $9.7B this year. But have you ever wondered how influencers get paid? Or how much they make? If you haven’t tried out influencer marketing and are curious about how influencer incentive works, keep reading.

Types of incentive

It’s important to understand the two types of incentive used to pay influencers, especially if you’re new to influencer marketing. Influencer incentive can come in two forms: monetary and non-monetary.

Monetary incentive

Monetary incentive is obviously the money you pay an influencer as a fee for their services. In influencer marketing, there are a few different models used to handle monetary incentive.

Influencers can be paid a flat fee per campaign. The parties negotiate the fee and the brand makes a one time payment to the influencer to cover the work they do for the campaign.

Or, brands could offer monetary compensation in the form of the cost per acquisition model, or CPA. This is a commission-based model that rewards influencers for the number of acquisitions they bring in. An acquisition is an event defined by your campaign. In influencer marketing campaigns, it may be sales, registrations to the brand’s website, signups to their newsletter, or downloads of an app.

There are two key ways to use CPA. You could offer influencers a fixed rate per acquisition or a variable rate per acquisition. Imagine your brand is a fashion ecommerce, and you’ve defined your acquisition as sales on your website. For example, under the first model, you might pay influencers $5 per sale. Or under the second, you might pay them 5% per sale.

Non-monetary incentive

In influencer marketing, non-monetary incentive takes the form of products offered to influencers in exchange for their social media posts about those items. This incentive may be non-monetary, but that doesn’t mean it lacks value.

In fact, for brands, non-monetary incentive is a great way to pay influencers. The influencer will see your product for its market value. But for you, the investment is technically lower, as you just have to account for the cost of production.

Also, this type of incentive isn’t limited to physical products. Brands also offer services or experiences. For example, a spa might offer a local influencer a free pack of treatments in exchange for posts about their services. Or a travel company might offer an influencer an all-expenses paid cruise in exchange for video logs that document the experience.

Travel influencer @thefivefoottraveler collaborating with hotel @aloftdelraybeach.

When you do offer influencers a physical product, make sure you account for any shipping and handling costs and potential delays. If an influencer needs your product in order to publish their campaign content, you could get behind schedule if you don’t allot adequate time for them to receive it and test it out.

Which incentive works for which influencers?

You should know that influencers can be organized in five tiers according to their follower count:

1. Nano influencers: 1K – 5K

2. Micro influencers: 5K – 50K

3. Medium influencers: 50K – 100K

4. Macro influencers: 100K – 1M

5. Mega influencers: 1M+

Generally speaking, the farther up the tiers you go, the more expensive influencers are to hire.

Nano and micro influencers

It’s great for brands when they can close collaborations based on product alone. To capitalize on this, consider working with nano and micro influencers. Nanos are new to the game, so they’re likely to accept collaborations in order to get experience. Micro influencers, depending on their stats, may ask for a fee in addition to product. But they’ll be a bargain compared to their counterparts higher-up.

Saving money is great, but there’s an added bonus when working with these influencers. They have the highest average engagement rates, which basically means their audiences are invested in their content. They’re also especially useful for brands looking to penetrate new niche markets, as their followers see them as experts in their chosen fields. Nano and micro influencers’ greatest strength is their relatability and authenticity.

Surf micro influencer @valeskaschneider has 21.6K followers and a 9.4% engagement rate.

Top influencers

In the medium range, influencers start to professionalize their accounts and hire managers. This means their content is more refined, but they’re more expensive. Managers, for example, can drive fees up by about 20%.

Medium, macro and mega influencers will almost always ask for a fee. The exception to this could be if the product you’re offering is extremely valuable, such as a luxury vacation or motorbike. As there’s a wide range of followers between these three tiers, there is also a wide range of fees.

@chiaraferragni, who has 21.8M followers on Instagram, is an example of a mega influencer.

Depending on your brand, top influencers may not be the best choice for your campaigns. Yes, they have high reach. But their engagement rates are much lower than those of nano and micro influencers. Their highly polished content reads as inauthentic, and followers see through their brand collaborations more easily.

Other tips to keep in mind

When negotiating influencer compensation, remember to get the final terms in writing. This way, if there’s confusion or a problem down the line, you can refer back to the conditions you agreed upon. The best way to do this is with a contract, but for some low-value collaborations en email may suffice.

Also, when paying influencers in fee, make sure you get an invoice showing what they’ve billed you for their services. If the influencer has a manager, this process should be simple. If not, some big brands have templates for influencers to fill out, or influencers will have to draft up their own invoice. And when you make payments, whether monetary or non-monetary, try to get a receipt.

Finally, many countries have disclosure guidelines for how influencers post about paid collaborations, whether they’re paid in monetary or non-monetary compensation. Always check which guidelines apply to you and what they require.


Regardless of the size of your business, you can take advantage of influencer marketing and the benefits it has to offer. Just know your limits going into it, especially when it comes to what you’re prepared to offer influencers as incentive. Knowing that defines your influencer search and makes sure you find the best person to help make your campaign a success.

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