Yahoo Finance Influencer's $82,000 demand exposes 'wild' industry: 'The audacity'
Bowen is trying to save her bikini brand from going under and thought influencers might be the answer.
An Aussie business owner has been left speechless after seeing how much influencers charge for spruiking people's products on social media. An influencer told Yahoo Finance it's like the "wild, wild west" for how creators come up with their pricing models and bikini brand owner Bowen found that out the hard way.
She's trying to rescue her business, Prilla Collective, from going under and she only has a few weeks before it goes bust. One avenue Bowen looked at was getting influencers to flaunt her bikinis and she reached out to a few that had a decent online following.
But she was not prepared for how much they wanted in exchange for a post.
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'I'm way out of my league'
"I didn't realise I would have to take a second mortgage to email influencers to see if they [would] work with a small brand like mine," she said.
The first creator she reached out to has 210,000 followers and they were charging $4,500 for a post on their Instagram feed, $6,500 for a reel and $1,000 for a five-frame story post, she said.
The second, who has 86,000 followers, was a bit more affordable and they wanted between $1,300 to $3,000 depending on what format it was and on which social media app.
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The third and final influencer, which Bowen admitted was probably well out of her reach due to her following, caused the bikini brand owner to "nearly fall off her chair".
The unnamed creator wanted nearly $60,000 for an Instagram reel, close to $33,000 for an Instagram story, and $82,000 for a TikTok video that would've highlighted the product.
They also said they could do a TikTok video that didn't mention the bikini and that would set Bowen back nearly $48,000.
"I know this is people's job but I did not realise that's how much money these influencers make," she said. "I'm not making that in my own swimwear business, let alone giving it to an influencer. I'm way out of my league."
'The audacity': How do influencers charge so much?
Grace Garrick, founder of PR company MVMNT, recently revealed a creator tried to charge an "entire year's salary" for a set of Instagram stories.
"Just let that sink in...an entire year's salary for a story set when they do not have 100,000 followers," she said in a video. "I have no words...that just takes the cake.
"Like I wanted to respond saying, 'Did you accidentally put an extra zero on the end of this?' Like, that is comedy...the audacity."
Micro-influencer Simona responded to Garrick's video, saying many creators had no framework for how they came up with that magic number when they invoiced brands and described it as like the "wild, wild west".
With nearly 18,000 followers, the Sydney TikToker organises brand deals herself without the help of a manager and she set up her rates after doing a bit of market research.
"For people in my position, it is literally just a stab," she explained to Yahoo Finance. "I reached out to other people with a similar amount of followers and said, 'What was your rate?' I had no idea.
"As I've developed slightly more of a following, I've become a little bit more fluent in the language that exists on email before the invoice is signed, and so the rates have gone up."
She said how much she charges can also depend on how much she likes the brand. If she has a big association with the company, the rates might come down, but if it's something completely out of her realm then the number goes up.
What has taken Simona by surprise is how brands haven't scrutinised the numbers behind her number. She has rarely, if ever, been asked for analytics to justify why she's asking for that amount of money.
"Every time I've said my rate, they're like, 'Great, let's move, let's move," she said.
Getting influencers on board might not be the key to success for everyone
Despite being on the receiving end of influencer marketing, Simona wonders whether it's actually a successful way of marketing a product to the masses.
"The fact that they invest in influencers this much kills me," she told Yahoo Finance. "Because I honestly don't think there would be that much of a conversion to sales."
Taylor Reilly runs Reilly Talent, a management company which looks after some of Australia's biggest creators. These people are on the other side of the scale compared to Simona and have millions of followers.
He told Yahoo Finance that influencer marketing probably wouldn't be the best for Bowen and her bikini brand at this stage.
"When you're selling bikinis, that's hard," he explained. "What you're selling is very competitive. You have to have something very unique in order to stand out.
"I think there's a point in time to work with influencers, but if you're a really small startup then no. If you're a small startup, you need to treat your cash like it's gold and make sure that every dollar you spend, you're getting a return out of.
The entrepreneur said influencer marketing "to guarantee bottom dollar conversions" is like "gambling" in some cases and you never truly know whether the thousands or tens of thousands of dollars you give to a creator will give you a decent return.
Knowing what numbers to focus on is essential
Reilly explained that the number of followers a creator has shouldn't be the metric used when they try to justify their prices for brand deals.
"It's rubbish. It's not real," he said. "Like I have guys with, you know, 10 million followers. We don't charge according to 10 million followers.
"It's what views you're bringing in, it's what marketing power you bring into that business that they can [use to] justify the spend."
His verdict on how much creators charge when they're approached by brands is just simple business.
"Someone's worth is valued by what someone's willing to pay at any point in time," he explained to Yahoo Finance.
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