The Engagement Rate

An industry bulletin for marketing pros.

Brat summer has not yet finished, coconut tree memes are still dominating my TikTok feeds and influencer marketing is alive and thriving, here’s your latest… 

As micro-influencers rise, so do their fees…

Smaller influencers are now demanding higher fees. Two to three years ago, TikTok micro-influencers with followings between 5,000 to 20,000 charged around $1,000 to $3,000 per post, but today that range has increased to $3,000 to $5,000, as reported by Krishna Subramanian, CEO and co-founder of influencer shop Captiv8. 

The surge in rates is attributed to the maturation of influencer marketing, which has become a staple in advertising budgets. Industry experts note that increased pay transparency, better tracking tools, and influencers’ awareness of content usage rights are key factors driving up costs. Influencer partnerships have expanded beyond simple social posts to include event attendance, brainstorming sessions, and content creation for brands, leading to more comprehensive and higher-paying deals.

Interestingly, the rates for celebrity and macro-influencers (100,000 to one million followers) have not seen similar increases. Influencers with larger followings have historically charged based on their audience size, a factor that remains relatively unchanged. However, the focus has shifted towards influencers with smaller followings (under 100,000) due to the benefits of increased pay transparency, better measurement tools, and a prioritization of engagement rates over follower count. This change is reflected in rising costs for micro-influencers, as seen with Loops Beauty, where social post rates for influencers with 10,000 to 50,000 followers have jumped from $250-$500 in 2022 to up to $2,500 in 2023.

Despite the rising costs, influencer marketing spending shows no signs of slowing down. U.S. marketers are projected to spend $7.14 billion on influencer marketing by the end of this year, marking a 16% increase from 2022. To manage the escalating prices, advertisers are exploring long-term contracts, brand ambassador programs, and product gifting in exchange for posts. Some agencies, like Dagger, use range tiers to negotiate added value and platform distribution, while others, like Evite, focus on securing broad usage rights for produced content. Collaboration between brands on influencer marketing efforts is also becoming more common to expand reach and find cost savings, highlighting the industry's adaptability and resilience in the face of increasing influencer fees.

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Big moves for Publicis Groupe 

The French PR company has announced plans to acquire influencer marketing company Influential to expand its influencer marketing services, with the deal expected to close in late August. This acquisition aims to combine Influential’s network and data with Epsilon’s transactional and audience data, creating a strong data and technology backbone to scale influencer campaigns. Influential’s founder and CEO, Ryan Detert, will remain in his role and work centrally within Publicis to enhance influencer identification, content creation, amplification, and measurement for clients.

This move comes amidst a trend of acquisitions in the influencer marketing space, as companies like Stagwell also expand their capabilities in this area. Publicis’ strategy includes leveraging Influential’s AI-backed platform, which consists of a vast network of over 3.5 million creators and extensive data points, to integrate influencer marketing with their existing media, creative, PR, affiliate, and social practices. With the creator economy expected to outgrow linear TV in ad spend soon, Publicis aims to strengthen its position in this rapidly growing sector.