What will influencer pay and contracts look like in 2023 and how will you manage them?
As the influencer marketing ecosystem continues to mature, influencer remuneration is changing and diversifying. With different payment models and contractual obligations, influencer marketing managers face a tougher time managing their creator relationships.
If you take a look across almost any of the articles making predictions for influencer marketing in 2023, you’ll spot a comment about how influencers are paid and managed.
The influencer marketing marketplace continues to grow and, with that growth, comes added complexity.
AdWeek reports that: “Over half [of marketers] (52%) expect to increase investment with social media influencers and creators, while a further 65% are planning to work with content creators to connect with communities “aligned with specific interests authentically tied to the brand”.”
Growth on that scale will lead to larger campaigns, larger influencer engagements and more complex campaign briefs, as covered in our own 2023 predictions post, here.
Influencer payments and contracts form part of that complexity – driven, in part, by influencers themselves maturing alongside their marketplace.
Do you want to work with that one influencer in that one niche that is absolutely crucial to the brand you just signed as a client? Well that influencer knows how valuable they are now and they’re only willing to work for a pay-per-results model, driven by their thousands of followers. Do you want to work with a range of influencers across Europe, in order to launch your client in France, Spain and Germany? You’ll most likely need three different contracts and, in all likelihood, to provide payment in three different currencies.
And that’s before you’ve agreed how you’ll decide on a fair price to pay your influencer for their content and reach. Even the traditional models here seem likely to change in 2023, so let’s take a quick look at those, so we can begin to see the size of change on the horizon.
The days of gifting, complementary tickets, vouchers and trips are on their way out. These are going to be the cost of doing business with influencers, if they are not already, rather than the business in itself. Influencers need to know and see your product or service to generate content, which many already do (and more still will) also require payment for. Put simply; the growth in size of the marketplace means more full-time influencers and when being an influencer is your profession, free products don’t pay the mortgage.
Licence-driven agreements and pay per post
Paying an influencer for their content, with one eye on using the content elsewhere (in an advert or on a website, for example) has become increasingly common over the past couple of years. In this scenario an influencer would be compensated for producing the creative and sharing this with their followers, but the main benefit from the brand may come from other media. When influencers enter into these agreements they are becoming increasingly complex. For example, if a brand wants a licence to use an influencer’s content in a campaign, influencers are seeking knowledge of where the campaign will appear, how often and for how long. For longer and more varied usage of creative assets, influencers are increasing their compensation requests. This diversification of usage licence terms is likely to increase this year.
Performance and bonus-driven remuneration
Performance driven payments could be anything between paying influencers a fee based on their follower count to paying influencers based on sales directly attributed to their activity. Both models are likely to change in 2023.
For example, influencers may previously have agreed to engage on the basis of being remunerated per account created on the client’s platform, for example, or per 1,000 views. Increasingly influencers may look to a combination of factors, representative of the fact that they are operating as both creative and publisher. In those scenarios influencers could charge a flat fee for asset creation, a fee to post on their platforms and a results-contingent bonus, based on the success of the campaign. Needless to say this level of engagement will make it more difficult for influencer marketing managers to manage these agreements.
Planning for your influencer management in 2023
Given all of the above, the picture for influencer marketing managers in 2023 is increasingly complex.
Contracts with influencers need to be smart and adaptable. Managing results from influencer’s creative could now increasingly feed into remuneration and total contract value. Crossing borders may expose you to currency fluctuations and evermore complex logistical, regulatory and cultural issues.
With all of that in mind 2023 is one year in particular that is going to take careful planning. Where influencer marketing departments may have managed to get by with manpower alone previously, this seems likely to be the year that complexity could overwhelm any lack of process.
We would love to hear your thoughts on the matter; how will you manage your influencer marketing in 2023? How will you handle multiple contract templates and types, with multiple remuneration models and cross border management? Can you scale effectively and are you ready to grow in the future?