How To Set Prices On Instagram – A Guide For Influencers

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I have been using Instagram for 6 years now on a daily basis. For about 3 years I have been doing this for a living and by now, I sometimes make 5-digit sales per month. All this time I was able to make so many valuable experiences and I gained additional expertise through Instagram consultations and workshops.

My colleagues often ask me for advice concerning the pricing and negotiating with advertising partners. There is no standardized guideline and that is why this blog post can give you some impulses for your own pricing. I recommend you to read it completely as there are so many valuable tips included.

Instagram fees and prices for influencers

Who actually pays for Instagram posts?

Unlike on YouTube, you don’t get automatically paid by Instagram for clicks or other automated ad revenues. Each cent an influencer earn was previously arranged and negotiated. Instagram does not pay influencers. This means: Collaborations have to be negotiated and coordinated again and again.

Moreover, not every product placement receives payment. Sometimes, an influencer only gets the products and no financial compensation. But more on this later.

 

How do I find collaboration partners who pay?

Ideally, you don’t have to ask yourself that, but you get enough collaboration requests via email or Instagram direct messages. That’s how it works with me by now. Only very few times I contact the companies myself e.g. when I am looking for hotels or restaurants when traveling. If you want to know how I do this, you can read here. From my own experience, I can also tell you that most of the companies are not willing to pay you if you contact them yourself. Paid collaborations mostly emerge from the initiative of the company. 

If you want to get the attention of companies on your Instagram profile, I can recommend the following:

  1. Move around in a niche and type some keywords into your profile description. Also, your story highlights are a hint on which topics you are occupied with. All in all, your profile should be focused on one topic, e.g food, sustainability or fashion.
    Die Themen sind auf den ersten Blick erkennbar

    The topics are obvious at first glance

     

  2. Interact with accounts that are occupied with similar topics. Companies often take a close look at the comments and stories of influencers in order to find similar accounts. Especially advertising posts (tagged with display or ad) will be looked at and analysed closely.
  3. Interact with the accounts of companies that you like. Tag companies in your story when using their products. You can make the tag very small so that your followers don’t see it. The companies do see the tag anyways and may consider you for future collaboration.

 

At what follower count can I charge for my posts?

We just learned that the money comes from companies and not from Instagram. The next question is: from what reach on can you charge advertising partners for Instagram posts or an Instagram story? Many influencers don’t charge at all for advertising posts where their products are shown even if they could.

It is a fact: Everyone may and should charge for posts, regardless of their reach. 

Yes, you’ve read it, the reach is absolutely irrelevant. Even with 500 followers, you have the right to charge for your postings.

I always explain it like that:

Imagine you had all these 500 people in front of you on a football pitch. A lot of people, don’t you think? And they aren’t just any people, but people who like you. They are people who trust you and identify with you. They follow you because they are interested in you and your content. And now imagine you show all these people your new amazing shoes. So, you got 500 people looking at your new shoes. Do you still think that they are few people?

With this demonstration, I want to suggest the worth of your community. Followers aren’t just a number but real people. If your topic is within a niche, e.g. riding, then a 1,000 followers are a lot. A 1,000 horse enthusiasts who follow you because of your tips and recommendations. Each of them is a potential customer for a manufacturer of riding accessories. Where else can you reach the right target group so precisely?

Short résumé: You can charge for your posts from now on. Every person who you can reach with your posts is a potential customer for your advertising partner. Even if the paid amount is lower at the beginning and companies often pay with products, you nevertheless have the right to charge.

How much can I charge per post?

The actual pricing depends on several factors. Negotiations often turn out to be very different and therefore the fees actually paid also differ. By the way, this is a very nice word, the meaning of which I would like to suggest to you at this point. Honorarium comes from the Latin honorare, which means honor. With the payment, the buyer (advertising partner) appreciates the service of the influencer. And this service is not just a quick snapshot and upload to Instagram. There is a whole process behind a post:

  • Community building, often over the years (I did not earn anything for the first 3 years)
  • Daily communication with the community via comments and private messages
  • Regular creation of interesting content
  • Further training and experience, which are incorporated into the contents
  • An ideally close basis of trust, which should not be violated by inappropriate cooperation (credibility)
  • Communication via email; often long negotiations
  • Creation of a media kit, email signature, and other technical background activities
  • Preparation and post-processing of the content to be created (planning, research, implementation, editing, post-interaction, post-processing in the form of screenshots of statistics and invoicing)
With this extensive list, I would like to show you what a “simple” photo on Instagram contains in terms of processes. Many companies and also “usual people” are not even aware of all the work in the background, which is sometimes a reason for the bad image of influencers. It is said that we hardly do anything for our money. But the reality is quite different because the companies usually do not come directly to us with price ideas. In the collaboration request, there is usually nothing about financial compensation. Which brings us to the next point.

 

How do I ask for financial compensation?

I often hear from my colleagues that they do not dare to ask for money. Or they don’t dare to negotiate and simply accept products (PR samples) without even asking for financial compensation. There is only one thing I can think of: 🤦‍♀️

Companies do have money and more than enough. Many start-ups say in their emails that they don’t have a budget available for collaborations (which one of you knows this!?), but in reality, there is always a certain budget. Most companies, in fact, say by not being able to pay that they actually don’t want to pay. Either as a conscious decision to reduce expenses and thus increase profits or as an indication “from above”. In other words, sometimes the influencer marketing officers’ hands are actually tied because they have not received a budget from their bosses. In this case, nothing can be done and the influencer must consider whether to accept the products in the form of PR samples or to refuse the collaboration. In most cases, however, there is a budget and you should insist on a financial compensation.

Short interjection to PR samples: These are all kinds of products that are provided to the influencer “free of charge”. Free is written in quotation marks because these products are also taxed either as business expenses or as income of the influencer. There are no gifts in the business world.

So think carefully about whether the products are enough as payment for all your effort and maintain your credibility. I am aware that it sounds tempting to have products sent to you all the time. I am also happy like a child at Christmas every time I get to do an “unboxing”. But even this unboxing should be fairly compensated financially, especially if it has the right reach. Otherwise, you’re playing into the company’s pockets and giving away your own profits.
Recognize the value of your work and, above all, the value of your community – and send your prizes in response to every collaboration request. Thank them in the email for their interest in collaboration and send either a list of your prizes directly in the email or a PDF file with a media kit, which also contains statistics. After that, the negotiations will start.

 

How do I set my prices?

So, now you know that you can respond to all collaboration requests with a list of your prizes. By the way, it will look more professional and credible if you have a media kit and send it along with your request. Read more about professional media kits here.

Setting your prices depends on several factors, including:

  • Your follower number
  • Reach and impressions
  • Story views
  • Country, gender and age distribution
  • Interaction rate
  • Relationship to your community

How much you actually get depends on:

  • how the company is financially positioned (start-ups often want to pay less than larger companies)
  • how well you can negotiate and convey your value
  • in which branch or niche you are moving

In fact, the amounts paid vary among different sectors. Since I myself do a lot of food collaborations, I know that companies in the food niche often pay lower amounts than collaborations from other areas of life.

 

The TCP-Formula

The term TCP is the thousand-contact price. It comes from classical media planning and indicates how much money has to be invested to reach 1,000 people. For comparison: At the Süddeutsche Zeitung, a one-page ad with 400,000 readers costs about €100,000. This corresponds to a TCP of €250. So you have to invest €250 per thousand contact points.
In order to pass on information as accurately as possible, I have asked around in my circles. Via Whatsapp and Instagram, I have regular contact to other influencers and exchange information about pricing. The TCP is determined independently by each influencer and varies in part depending on the branch, size of the company and country of origin. That’s why I can’t give you here this one number that defines the ideal TCP. It’s best to find your own TCP that works. You can also adjust it over time.
I usually work with a TCP of €10, which with a range of 140,000 followers results in exactly €1,400 per mail. At IG Stories I expect a much higher TCP, because almost 90% of my viewers are there daily and therefore there is a very close relationship. This is particularly evident in the sales figures when I advertise my own products or affiliates. Stories result in a noticeably higher conversion than feed posts. Therefore I calculate with a TCP of €50-100, which would be exactly €1.000 (€100 TCP) or €500 (€50 TCP) with 10.000 story views. With a story, I mean here a paid story with at least 3 video sequences.
Other influencers also take a TCP of €20-40 for posts, especially smaller accounts. With a range of 2.000 people, you can charge €80 with a TCP40. Just because of the effort involved, you can round up to higher sums in many cases. A colleague of mine, for example, charges €250 per mail with 3.500 followers. Even if that sounds like a lot for one or the other – always think of the value of the community. For companies €250 is a piece of cake.

For stories, the prices vary even more extreme. The main reason I would say is that most influencers (and companies) are not aware of how much more effective stories are. Your audience are people who follow you every day and trust you like a good friend. So, a story view is worth much more than an impression from a feed post. Always keep this in mind when negotiating for story campaigns.

 

Instagram Honorare für Influencer

More income through package prices and staggered pricing

Last but not least I give you another tip on how to earn more money with the same effort. Offer the company discounts for several postings in return.

Example:

  • Instagram post – 1.000€
  • 2 Instagram posts – 1.800€
  • 3 Instagram posts – 2.400€
  • etc.

This principle is called staggering. You can also set package prices if you use several channels within a campaign.

Beispiel:

  • Instagram Post + Story – 1.500€
  • Instagram Post, Story und YouTube Video – 2.500€
  • Instagram Post + 3 Stories innerhalb eines Monats – 3.000€
  • usw.

Overall, it is always advisable to plan for the long term and, at best, to retain collaboration partners for several months. This way you will have a regular income, which means you are less dependent on new collaborations. The less you are financially dependent on your advertising partners, the more authentically you can plan your content. Choose a few lucrative collaborations that fit your account rather than a large number of poorly paid collaborations or PR samples. With all this input, your followers won’t know what’s good and what’s not. Keep the focus on the few products you like to use yourself rather than introducing a new product package every day.

 

Any questions left?

I hope these tips help you with your own pricing. If there are any questions left you are welcome to leave a comment under this blogpost. I love to give you tips and help you with eventual difficulties.

For a personal and more intensive strategy coaching, you can write me an email to: laurafruitfairy{at}gmail.com. My coaching workload is limited, so it’s best to get in touch with me specifically with your concerns (Where do you stand? Where do you want to go? What do you hope for from the coaching?) I will then send you a proposal on which basis we can work together.

 

Thank you so much for reading my blogpost and good luck with the implementation!

 

Love,

Laura.

 

 

1 Comment

  1. April 12, 2020 / 8:53 am

    This is a very nice Blogpost. Best wishes


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