You don’t have to be a Kardashian or have millions of followers to make money on Instagram. Advertisers are now looking for collaboration sponsorships with micro-influencers (100 – under 1M followers) who usually have higher engagements than celebrity influencers and are more authentic.
The number of people on Instagram continues to explode. It’s safe to say that influencer marketing on social media has come of age.
According to PR Couture, “Although reaching out to micro-influencers might seem counterintuitive to businesses desperate for growth and reach, studies indicate that micro-influencers may be more cost-effective and successful than their macro counterparts.”
Markerly has found, “people with fewer than 1,000 followers get an 8% like ratio, while influencers with between 1-10 million followers have a ratio of only 1.7%.”
Another study by Expertcity found that:
- Micro-influencers are considered to be 10% more knowledgeable than the public.
- 82% of customers are very likely to follow micro-influencer recommendations
- Micro-influencers have 22.2 times more buying conversations.
How should you charge for a sponsored post on Instagram?
The rates vary depending on the industry, location, and niche you’re in, but here’s a simple approach to help you get started.
Often the hardest part is justifying your rates to the brand or company who’s sponsoring your post. Traditional online marketing such as banner and graphic ads set rates based on CPC (Cost Per Click) or CPM (Cost for 1,000 people to see). Since there are no links to click on an Instagram post, CPM is more appropriate. Having run my own fashion magazine as well as managed influencers in various niches, I’ve found this to be the most straightforward for brands or companies to understand.
Your CPM rate can be higher or lower depending on the amount of engagements (likes and comments) you receive on your Instagram posts. As mentioned above, engagement is more valuable to advertisers. When a lot of people like and comment on your post, it shows you’ve made a stronger impact on your followers than posts with fewer likes and comments.
Adjust your CPM by engagement.
Engagement = (likes + comments per post)/(total number of followers):
- 1.5-3% engagement ~ $5 CPM
- 3-5% engagement ~ $7 CPM
- 5-8% engagement ~ $10 CPM
- > 8% engagement ~ $15 CPM
Combine engagement and total number of followers for your final rate:
For example, let’s say the standard CPM in your niche is $5. Since CPM is the cost for 1,000 people to see the post, if you have 1,000 followers, your rate per post is $5. If you have 10,000 followers, your rate is $5 CPM x 10 = $50.
- $5 CPM x 10 = $50
- $7 CPM x 10 = $70
- $10 CPM x 10 = $100
- $15 CPM x 10 = $150
Most large influencers, those with over 500,000 followers, have less than 1.5% engagement. This happens for a variety of reasons, such as being followed by fake Instagram accounts or random people following them just because they’re popular.
Therefore, if brands ask why your CPM is higher than a celebrity influencer’s CPM rate, explain that you have a higher % engagement, which means a larger % of your followers pays attention to brands you promote.
In the end, your actual rates will depend on how much real value you can provide the brand or company sponsoring you. if you bring them a lot more sales, they would love to work with you again, and probably pay a higher rate. If they do not get more sales, customer leads, or awareness through the sponsorship, they won’t work with you again. So, buying followers, likes, and comments is not only morally wrong, but if you don’t have real followers, the brands and companies sponsoring you will know because those fake followers won’t bring them any sales.
What rates are other people charging for different topics/niches and number of followers? Check out this amazing influencer rate tool.