If I could answer the question How to pay influencers? in one sentence, I’d paraphrase veteran marketer Nycole Hampton and say: Pay fairly and spend efficiently.
But negotiating a cost-effective and mutually beneficial partnership with an influencer is uncharted territory for many marketers. To clear things up right at the top, these are the payment choices you have:
- Performance-based pay: An influencer posts recommending a product and the brand only pays them when their content converts a customer, or triggers a successful event like a purchase, booking, download, newsletter signup, etc.
- Pay-per-post: As the name suggests, you pay an influencer for a post (or set of posts).
- Fixed-rate + performance-based pay: The influencer is paid a base sum for each post (or some other set fee, e.g. activation or per campaign), and they must generate sales to get additional pay.
- Gifting & credits: The gifting of the product is the “payment”. Or the gift acts as an initial introduction to the brand.
- Comped events or travel: Similar to gifting, inviting influencers to events, or paying for them to travel is the payment.
Knowing these options is one thing, but how do you choose the right one? And how do you know how much to pay?
There is no one-size-fits-all solution when it comes to contracts, compensation and paying out influencers. The upside is that these payment models are so versatile that they can be used separately or in combination in any creative way that suits your specific brand and budget.
The downside is that there are no hard and fast rules to follow to guarantee success.
But, once you understand the way each payment works, you’ll be much more confident to choose a payment method (or methods) that compensate influencers fairly and help you spend efficiently.
To learn more about how much to pay influencers, see how 42 influencer marketers like you figure it out.
Payment problems influencer marketers are facing
- No standard pricing models and costs vary wildly = What do I do?
The reality is influencer costs do vary wildly. An influencer just starting out might accept free gifts, while the biggest creators are working on multi-million dollar deals. Costs even vary with the same influencer. Someone might work with a larger brand for free one day because they believe it has value, then ask for hundreds of dollars for a post the next day from a different brand.
Since there’s no standard pricing, it leaves a lot of room for negotiation and confusion over price and payment model.
- Marketers aren’t confident negotiating = How and what do I negotiate?
Negotiating terms is a daunting task when there are this many unknowns and moving parts.
- “What if my budget is too low? Will they dismiss me?”
- “I really want to work with this influencer, but their fee is way too high.”
- “What if I overpay and lose money on the partnership?”
Creators can ask for unrealistic fees that throw marketers off. Marketers, on the other hand, may not be aware of different payment models they have at their disposal to persuade an influencer to work with them. Or even, different metrics they can use to negotiate more efficient prices.
- The complex workflow of paying out creators = When did I become an accountant?
Once you’ve gone through the challenging negotiation period & have agreed on a price, marketers still have to capture and track that influencer’s content performance, request an invoice from them, approve the invoice, and send out their money. If you’re working with creators globally, then tax compliance and a bunch of other stuff enters the chat.
Where do you start bridging the gap between creator expectations and influencer marketing budgets? And how do you manage invoicing and payments on top of that?
5 ways to pay influencers & how to choose the right payment model
1. Performance-based pay
This is usually the ideal compensation model for brands, with the lowest risk and highest scalability.
Performance-based pay is a simple form of payment. An influencer posts recommending a product, and the brand only pays them when their content converts a customer or triggers a successful event like a purchase, booking, download, newsletter signup, etc.
Performance-based pay is usually a percentage of sales, for example, between 5 and 30%, depending on margins.
Why brands choose performance-based pay
Brands prefer to use performance-based pay because it’s infinitely scalable compared to the other payment models on this list. Since you only pay when a creator makes a sale, there’s far less risk that you won’t see a positive return on your investment.
It’s also easily trackable: you can use tools that help you track performance, like unique landing pages and promo codes. Affiliate software will even pay out influencers the right amount at the end of the agreed period. You can also build UTM links as a quick and free way to track influencer traffic and conversions in Google Analytics.
Performance-based pay is a smart way to build long-term relationships with influencers. It encourages effort and commitment, as influencers will only earn as much as the work they put in.
When to use this payment method:
Performance-based pay can be used in most cases, whether a brand is in the consumer goods space (beauty, fashion, some electronics, home decor) or the digital space (apps).
The only category of brands that commonly stay away from a performance-based model are luxury brands. When was the last time you saw an influencer recommending Chanel with a discount code?
Promo codes and even bio links can “cheapen” a luxury brand. If your brand plays in this space, this might not be your payment method.
Another factor to consider is the goal of your campaign. Brands usually use performance-based pay for campaigns aimed at direct sales. Using a performance-based model wouldn’t make sense if your campaign goals are brand awareness.
Performance-based payment is most effective with nano- or micro-influencers. As follower numbers increase, depending on your commissions, it can become less cost-efficient. Consider a pay-per-post payment option when working with bigger creators. (Next up on this list)
What about the amount of commission you should offer?
This depends on a few factors: your product or service and your margins. Generally, products or services with high margins can offer higher commissions. Low margins will offer lower commissions.
For example, a mobile app, SaaS, or digital product has higher margins than a physical product, so it’s not uncommon to offer commissions over 20%.
When we asked 35+ marketers, 60% said they offer between 10 to 14% commission, while 40% said they provide over 15% commission.
What to do if influencers push back:
Influencers don't generally like this payment method. Some larger creators may also not accept 100% performance-based pay either.
Influencers push back on performance-based pay because it doesn't guarantee a fixed income. They're also acutely aware of the unpredictable nature of algorithms and consumer behavior.
To counter this objection, offer something extra to make it worthwhile. We often see brands provide free products or an 'activation payment' to kick off the partnership. In some cases, a base fee + commission is the best choice. (We'll discuss this payment model later)
Pay-per-post rates can be anything in reality. We’ve paid out influencers from $100 to five-plus-figure sums.
These rates depend on a ton of factors, but most typically:
- The platform
- The niche
- Metrics like audience engagement and fake follower rate
- The campaign type and deliverables
- The partnership duration (i.e., one-off or year-long contracts)
- The geographical market
The key characteristics of pay-per-post are transparency in payment and clarity on deliverables. The agreement is for a set number of posts over a defined period.
Pay-per-post doesn’t automatically mean it’ll be a one-off collaboration. Typically, what comes to mind is that brands pay influencers for a specific number of posts, usually as part of a short-term campaign or product launch.
But pay-per-post can also be structured into longer-term campaigns over several months or even in ambassador programs where the collaboration is longer.
Why brands choose pay-per-post
In contrast to performance-based pay, most creators jump on a pay-per-post collaboration because it guarantees payment. It's appealing to brands because it guarantees deliverables. Both influencers and marketers clearly understand the expectations and compensation.
Paying influencers per post is also a great way to build more enduring partnerships with influencers with large followings. Generally, since pay-per-post is the preferred payment type among influencers, your outreach and recruitment is more successful. Influencers are more likely to reply and want to work with you when they know that they'll get paid.
Mature influencer marketing programs in big, often luxury brands prefer this model because it's simpler to run as long as you have the right tools to track each post's performance separately.
For example, Modash's eCommerce customers use our Campaign Monitoring tool to track performance of each post, including reach, impressions and number of likes and comments.
The downside of pay-per-post is that it's hard to tie ROI to direct results, especially at scale. Marketers often solve this by adding links to unique landing pages, point-of-sale surveys, or using advanced measurements like marketing mix modeling.
When to use this payment method:
Like performance-based pay, pay-per-post is versatile, and marketers in different industries, products, and scenarios can use it.
We see four different scenarios where pay-per-post makes the most sense to use.
- For new influencer marketing programs: It gives you a clearer idea of campaign processes and helps with future planning.
- Partnering with more prominent creators: Popular creators and creators represented by talent managers aren’t generally open to commission-based deals. In these instances, marketers offer pay-per-post compensation.
- Brand awareness campaigns: Ideal for these campaigns as the goal is visibility, not immediate sales. Paying larger creators a fixed fee can offer lots of exposure, and partnering with them can also serve as social proof when recruiting influencers in the future.
- Products with low margins: A fixed cost per post can be more manageable and cost-effective if revenue sharing is less viable due to low profit margins.
Remember that as trust and mutual understanding grow, the payment method can evolve to performance-based compensation or a hybrid approach. (We’ll discuss this one next)
What to do if influencers push back:
The good news is that direct payments are generally the most attractive payment option because it's less risky and more stable for the influencer.
But this doesn't mean there won't be any objections. Influencers will have set rates that may be out of your budget.
In scenarios like this, it's crucial to negotiate fair compensation based on expected performance outcomes. To do this, you'll need data.
In a payment survey we ran in October 2023, marketers indicated the top 4 data points they rely on to make pricing decisions.
- engagement rate
- percentage of the audience in a target location
- average views
- Fake follower rate
I added the fake follower rate because we always recommend that marketers use this metric to ensure they're not overpaying.
You can get engagement rate, audience location, and average views directly from influencers or use a tool like Modash and you can also get the fake follower rate.
All influencer profiles in Modash show basic and advanced data about an influencer's performance.
You can use this data in your negotiations with influencers to justify your offer.
For instance, if an influencer has 120K followers but a significant portion are fake accounts or bots, it's reasonable to adjust your offer accordingly.
Clear, data-backed communication like this helps set realistic expectations and paves the way for a transparent and trusting partnership.
3. Fixed-rate + performance bonus
Otherwise known as the best of both worlds.
A fixed-rate combined with commission (or a performance bonus) is the most mutually beneficial payment method for influencers and marketers.
An influencer is paid a base sum for each post (or some other set fee, e.g., activation or per campaign), and they must generate a specific action to get additional pay, like clicks, conversions, order value, or sales.
Why brands choose base pay + performanced-based pay
Brands keep this option in their pocket to start a partnership and build trust with influencers.
Since some influencers are wary of purely performance-based pay due to its inherent uncertainty, this hybrid approach balances security and incentivization.
The base fee shows the brand’s commitment and that the brand values them, while the performance bonus ties their efforts to more earnings.
On the brand side, marketers can build a trusting relationship with the influencer by offering a base fee and can track performance to make sure the influencer is producing results—a win-win.
When to use this payment method:
Here are the most common scenarios where brands use base-pay + performance bonus:
- Building long-term partnerships: If you want to build long-term partnerships, this payment method is perfect. It nurtures ongoing relationships as it provides a stable base while encouraging continued effort and engagement from the influencers.
- Diverse campaign goals: Base-pay + performance bonus is suitable for campaigns aiming for both brand visibility and direct sales, as the fixed rate covers the brand exposure part while the bonus incentivizes sales.
- High-value influencers: An effective payment method when working with influencers who have significant reach and impact because it ensures that they are fairly paid for their broader influence. But, brands should be cautious because fixed-pay + performance bonus can quickly become inefficient and expensive if you haven’t taken an influencer’s performance into account. In some cases, it may make more sense to strike a pay-per-post deal.
What to do if influencers push back:
Even in this win-win model, influencers can have reservations, usually due to the performance bonus component. There's added pressure to create engaging content that gets engagement, reach, and converts.
Influencers may not trust how a brand measures those conversions or need help understanding new-to-them and complex language in the agreement around measurement and rewards.
To handle these fears, you can show success stories of other influencers who have benefited from this model and regularly share performance data with them to build trust. Allowing for flexibility in adjusting the payment model can also help influencers feel supported.
Whatever you do, simplify the terms you use in agreements and contracts so they're easily understood, and make sure to have clear and open communication about expectations.
4. Gifting & credits
Gifting is the OG payment method of influencer marketing, where a brand offers a product they’d like the influencer to promote for free.
We’ve seen brands approach gifting in their influencer relationships in different ways. Some brands use gifting as a foot in the door, letting the influencer try out the product first and — if they like it — take things further by discussing a potential partnership or simply promoting you on their account.
The second way is gifting as payment, which tends to work better with smaller creators.
Why brands choose gifting
Brands choose gifting because it can be a cost-effective strategy which is perfect when you’re working with a limited marketing budget. It’s also less financially risky for brands as it only requires a minimal investment, cost of goods plus postage & shipping fees.
Once an influencer successfully posts, brands can invite them onto a revenue-sharing partnership because it tells them that the influencer definitely like their product and they’re motivated.
But it’s also a great way for influencers to be exposed to a new product and get firsthand experience of using a product which can potentially lead to authentic promotions.
Use the posts that users spontaneously post after a gifting campaign as content in your Meta ads, it’s a smart way to test your ads and see which ones convert better.
When to use this payment method:
Gifting is a good way of testing the waters.
For example, you can test the market response to a product or products before committing to larger campaigns. Or, you can try whether influencer marketing is the right channel for you with a gifting campaign.
If you’re starting and you don’t have cash or systems in place to hire influencers and track them, giving away your product is relatively inexpensive and straightforward. If both sides are happy with the outcome, a long-term partnership could be in the cards.
Another scenario where gifting makes sense as a payment option is when you’re engaging new or smaller influencers. Gifting can be pretty effective with influencers building their accounts or having smaller followings. It helps them build a reputation and gives them a test run of working with a brand.
Don’t try to get a prominent creator's attention by sending PR or gifts if you have a small budget. These creators are inundated with gifts, and the chances of them seeing and posting about your gift are very low.
Finally, you don’t have to use one payment method exclusively. You can mix and match to create an offer that benefits both your brand and the creators you work with.
For example, we often see brands use gifting to keep long-term relationships with ambassadors active.
What to do if influencers don’t respond to your gift:
If you’ve sent a gift and not heard a peep in your inbox and the influencer hasn’t promoted your product online, then there’s not much you can do after the fact.
Gifting tends to be a low-commitment option. Without a formal agreement between the influencer and the brand, the influencer may not promote the product at the right time or at all. Some brands simultaneously send out their free product to many influencers and hope for the best. This approach isn’t strategic or sustainable, so there are no guarantees.
For better outcomes, make sure that the product you offer has real value and appeals to the influencer. Keep expectations realistic: Influencers may not get too excited to post about a free toothbrush.
You can also incentivize influencers to post by offering a discount code for friends and family or their audience or offering a second gift if they do post.
5. Comped events or travel
Comped events and travel are mainly used as payment by travel and hospitality brands, offering a free trip or stay in exchange for promotion. More recently, it has fallen out of favor in other industries like beauty and fashion.
Events offer influencers unique experiences as compensation and can work very well for some brands.
Influencers can offer premium content to their followers, while the unique photos and videos of the experience give authenticity to the destination and make for more engaging content.
Why brands choose comped events or travel
Comped events and experiences are the gifting of travel and hospitality brands. Creators won’t often ask for payment on top of a trip, especially if you’re offering a higher-end holiday package.
Brands in niches that promote lifestyle and luxury offer experiences to influencers because they translate into compelling content for their audience.
In a round table discussion about influencer payments, Ben Williams, formerly at luxury digital marketplace FARFETCH, told us that influencers put out an unusually high volume of content during events. Brands choose to host events or offer trips because they’re likely to get more content for the amount they spend.
For example, if you buy from an influencer’s rate card for $5K, you’ll get less content than if they post about a trip or event that cost you $5K.
Pro-tip: A higher volume of content during events doesn’t have to keep you chained to your phone taking screenshots of the content. In Modash, you can activate Event Mode where we automatically collect all content your chosen influencers post in a given period. You don’t have to worry about catching it all manually yourself.
When to use this payment method:
If your brand exists in travel or hospitality, paid or partly-paid trips are a no-brainer.
For example, the marketing team at Tourlane sends their partners on week-long, all-expenses-paid trips to a destination of choice. These trips cost the brand thousands of euros, but partners post content in three phases: before, during, and post-trip.
The results speak for themselves: influencer marketing at Tourlane drives 5-10% of bookings per month (worth hundreds of thousands).
If your brand is in the high-end lifestyle space, exclusive events can be a cost-effective way to get tons of unique content from your partners. Events can create much buzz on social media, so it's a good idea to use them around special seasons or product launches.
You can still consider using events or travel to keep your ambassadors active if you're not in those spaces.
For example, Deeper Sonars, a brand that offers portable sonars for anglers to 50+ markets globally, puts on a fishing tournament every summer for their ambassadors. It's a great way to nurture relationships and offer a chance for their partners to create just a tonnage of content about their brand.
What to do if influencers push back
Not all influencers will jump at the chance to attend an event or accept a free paid travel experience.
If the event doesn't allow for creative freedom or the travel itinerary is too rigid, influencers might feel that the content produced will need to be more engaging for their audience.
Another reason creators may be wary of events is that the expectation around creating content isn't clear, or they seem too demanding. For some influences, the amount of effort it would take may differ from what is equivalent in value to more direct forms of payment.
To ensure you get the influencer you want to commit to an event or travel opportunity, be flexible about when and how much they should post. (Perhaps ask them to post after the trip, not during it). Ensure that their personal and audience interests align with your brand and that you have clearly defined content expectations.
Bonus: What about content licensing fees?
When you pay an influencer or content creator a content licensing fee, you’re able to use their content on your website, social media channels, or other marketing materials.When you pay an influencer or content creator a content licensing fee, you’re securing the rights to use their content on your website, social media channels, or other marketing materials.
Content licencing or content usage fees are typically used in three ways.
To use UGC: If you want high volumes of content from customers and content creators, UGC is the best way to get high volumes of content from customers and other content creators.
To follow up on gifting campaigns: Marketers often secure content usage right on the best-performing posts coming out of gifting campaigns.
To get the best bang for your buck: When we asked marketer what they consider most valuable and would be willing to pay an influencer more for, content usage fees came out on top.
Tip: Not all creators will ask for a content usage fee. You want to ask them. Some will include it for free. Other savvier influencers, will ask for the extra fee.
How to pay out influencers: Tracking & scaling influencer payments
The way you track payments and pay out influencers will vary depending on a number of factors. But in general, you’ll most likely move through three phases as you scale up and recruit more creator partners.
Phase 1: Start manually with a spreadsheet
Phase 2: Use affiliate software to calculate, track & pay out performance commissions
Phase 3: Use a payment platform like Modash Transactions to handle invoices and payments in high number, particularly for multi-country campaigns, without performance-based pay.
Manually tracking influencer payments & paying creators
To start with, you want to record how much you’re spending per influencer per campaign. You can use a spreadsheet or a tool like Modash to do this.
The benefit of using Modash’s campaign tool is that you get an overview of performance per influencer. Then you can quickly compare which partnerships are generating the most engagements.
Automate it: Campaign monitoring also collects content for you automatically. Every Post, Story, Video or Reel is automatically saved according to the hashtags or mentions you choose to track.
If you’re running an event or have influencers on paid-trips, Modash also offers Event mode. In Event mode, you select influencers and we collect all of the content for a given period, regardless of hashtags or mentions. It’s a brilliant way to encourage influencer to document and not worry about adding the right hashtags.
This manual tracking option is a good option if you’re working with fixed costs (i.e. gifting, or pay-per-post) and influencers in the same country.
Your workflow will look like this:
- Ask the creator to send you an invoice
- Check that the amount is accurate & your company’s info is accurate.
- Send it to your manager (or finance team) to process & initiate payment.
But once you start scaling your partnerships or you’re expanding to international markets, the simple workflow quickly becomes complicated and unmanageable by humans. (We only have two hands!)
That’s when a spreadsheet won’t be enough and tools can save you.
Using payment tools to track & paying out creators
Payment tools like affiliate management tools or influencer payment platforms, are designed to take much of the hassle out of payment process.
For example, when you’re working with international creators or creators who are new to influencing, and you’re doing it at scale, the amount of time you need to spend on payments rises substantially.
Some marketers also become responsible for figuring out the tax rules for different countries, and looking up he local laws of working with creators.
When you reach that phase, or if you’re currently in it, you may want to consider a tool.
Modash Transactions makes the whole process pretty hands-off process. It’s a great option if you’re running non-affiliate campaigns.
All you do is create a Transaction by filling out some details about the influencer and your agreed payment. Then you send a personalized link to the influencer. At this point, Modash takes over and does the rest, including creator onboarding, invoice management, and actual payment.
Pay fairly, spend efficiently
Choosing between influencer payment methods comes down to your marketing goals and, of course, budget. Think about your margins, customer value, and what kind of returns are needed to make this channel profitable. If you have any other marketing channels (e.g. PPC), take a look at what kind of cost-per-acquisition you’re getting there too for a benchmark.
Test out different partnership models, and see what works for you. You can also mix and match payment options, or start with one and change it later in your relationship.
Be creative and always strive for a win-win deal.
Don’t be deterred if a creator says no to you or you see a few extortionate prices pitched by creators. There’s 250M+ creators in Modash’s influencer discovery platform. The right partners are out there for you; keep searching, reaching out, and negotiating.