Just like any other marketing strategy, figuring how much you should invest in your influencer marketing campaigns can be tricky. On top of that, you have to make sure you’re getting the most value out of the money you’re spending. And if you’re new to the space, how do you know which pricing model to offer to the influencers you want to work with?
At Matchmade, we work closely with advertisers, influencers, and agencies. And we made it our mission to make influencer marketing measurable, efficient, and transparent for everyone involved. Based on our experience from over 200 campaigns, we decided to do a quick dive into the 3 most popular deal types that the advertisers we work with choose, to help answer the question above: CPM, CPI, or Fixed Fee.
Before we begin, it’s important to remember that not all influencers agree to the deal type you suggest. Most of them already know which pricing model they are most comfortable with. So, we strongly recommend to keep an open mind when exploring this territory with each influencer you work with.
Let’s get to it.. What is a CPM deal?
A CPM (cost-per-mille) model focuses on the number of views sponsored videos get. It enables you to estimate and predict the type of results you can expect as it takes into account the fluctuation between the number of videos and the number of total views on a channel.
This deal type is a lot easier for advertisers to estimate how much they will pay compared to one of the other deal types listed below: CPI deals. It is also considered as the most “performance oriented” pricing model to influencers because they can similarly see and measure how much they will earn.
High viewership doesn’t always lead to a high conversion rate. For instance, many gaming influencers would create an integrated video for their sponsored campaigns. However, no matter how interesting the main piece of content is, if the integrated bit is poor and unnatural, the conversion rate from views to installs will reflect that. A good way to overcome this advantage is to search for YouTube channels with keywords (e.g. sponsor, download, etc) to see if they have public bitly links.
Psst.. we’re excited to announce the Matchmade platform now offers CPM support. Advertisers and influencers using our platform can negotiate deals based on cost per 1k views. Sign up now to create your first influencer campaign.
What is a CPI deal?
A CPI (Cost Per Install) deal focuses on the number of installs a game gets through a specific tracking link. When you opt for this pricing model, you essentially pay for the number of installs your game earns.
It’s the most ideal to choose because you only pay for what you want. It becomes even more beneficial when you already know how your game monetizes, and how valuable an install, on average, is for you.
Not many influencers (especially those doing a sponsored campaign for mobile apps) accept this type of deals because they are normally being paid less than the actual number of downloads they influenced. In most cases, instead of using the tracking link shared in the video’s description section, most viewers who are interested in the game the YouTuber features download it directly from the App Store. And when it comes to CPI deals, advertisers are only paying for the number of installs gained from the tracking link.
Double psst.. Another disadvantage you may encounter when choosing this pricing model is going over-budget if the video performs exceptionally well. Luckily, the Matchmade platform offers advertisers the option to set a cap on the amount an influencer can negotiate.
What is a Fixed Fee deal?
This pricing model is by far the most popular amongst influencers because they are getting a predetermined fee for their creation. It’s also the easiest deal type for both parties because, at least for your part, all you need to do is set a payout amount for each campaign.
A fixed fee deal is the safest bet when your goal is to assess the performance of your game on YouTube. This is because you can then measure the number of installs gained to the price you and the influencer initially agreed on. More importantly, it also makes budgeting easier because you will know exactly how much you’ll be allocating your marketing budget to influencer marketing campaigns.
Compared to the two pricing models above, fixed fee deals can be more risky because they don’t incentivize influencers to go the extra mile the same way (At Matchmade, you have the option to review the video before it goes live). Whenever you choose this deal type, there’s always the possibility of overpaying influencers, especially when they are receiving the exact amount you both agreed on, regardless of how well or poor their video performed. Another disadvantage is that it may be more difficult and time consuming for both parties to agree on a specific price right away.
In a nutshell..
Experiment, experiment, experiment. If it’s your first time running influencer marketing campaigns, learn about the different pricing models available through trial and error, and focus on the one that brings you the best results. But remember, it’s a negotiation at the end of the day, so don’t be discouraged if there’s a lot of back and forth at the beginning – it’s completely normal. The end goal should be for both parties to agree on a deal type that is mutually beneficial.
Check out the first section of this blog post to get a further understanding of the different deal types you can experiment with (of course, depending on what your campaign goals are).
Triple psst.. At Matchmade, the intelligent influencer marketing platform, we also offer real-time campaign performance metrics on our dashboard. Make sure you try our Advanced Analytics toolset if you want a deeper data dive into the performance of your influencer marketing campaign.