The Hidden Costs of Influencer Marketing

Key Article Takeaways:

  • Time is the overarching hidden cost in influencer marketing 
  • Scaling up is impractical without influencer tools since Brand Manager time is valuable 
  • Spending 5x as much per influencer is going to get you probably 10x as much in terms of reach and the related metrics.


I think this is one of the most underappreciated topics in all of influencer marketing and it plays into some of the conventional wisdom in the industry. 

Basically, the hidden costs of influencer marketing come down to one critical element: time. Specifically, the value of both a brand manager’s time…and an influencer’s time.  

First, let’s focus on a brand manager’s time. Simply based on consulting rates, let’s assume that it is worth $300 / hour. And then let’s assume we’re going to execute a $30,000 campaign…large for most businesses, but on the smaller side for some enterprises. Now let’s set up a variable to see how the hidden costs are going to play through in this campaign. In Option A, the brand is going to work with 5 influencers. In option B, the brand is going to work with 25 influencers. 

The reality is that working with 25 influencers would be practically impossible without the incredible influencer tools available on the market now that enable efficient discovery of influencers that meet the required demographic, interests and other criteria. That’s the key selling feature of many influencer platforms and so there’s a definite bias toward using these tools to maximum benefit. 

But there’s a trap: any good brand manager is still going to vet each of the proposed influencers for at least 15 minutes. The “time” cost for the five influencer program is $500 but for the 25 influencer program it is $2,500. These dynamics are compounded for tasks like coordinating samples and approving content (which generally involves multiple people and potentially legal). Including some “non-scaling” efforts like structuring and we estimate the brand’s “time” cost of the 25 influencer program at over $20,000 (adding a whopping 70% to the cost of execution) while the 5 influencer program costs less than $5,000 (a more manageable 15%). 

Here’s A Chart Showing The Math: 


Here’s the other hidden cost: we’ve acted like these two programs are equal in terms of expected outcomes because they both cost $30,000. But we can tell you for an almost certainty that the reach, views and clicks of the 5 influencer program will actually be larger than the 25 influencer program. Why? Because there is a similar effect in how influencers price their services. Even if they don’t ascribe any value to their reach, just the 5 to 10 hours of work minimum required to create a post, do edits and post the content is worth that much.  

But again, that gets you influencers with immaterial followings. And think about this campaign: even if you run it on a self-service basis with no agency fees, there’s barely more than $1,000 per influencer meaning you are still way down at the inefficient part of the curve. Spending 5x as much per influencer is going to get you probably 10x as much in terms of reach and the related metrics. The pundits love to say that micros and nanos have more engaged audiences. The data on that is more mixed than they let on, but our data clearly shows that the right influencers at any size can have engaged audiences…but they all exhibit the scaled efficiencies in terms of size. Why does this happen? Wouldn’t bigger influencers be more sophisticated and price themselves especially aggressively? Well, we’ll theorize about why that typically doesn’t happen in another post. 

Separately, how did we get here? Not to sound like there’s some kind of conspiracy, but I think part of the answer is that the 25 influencer scenario is in the best interest of the influencer platforms. Not only do you need a discovery platform to find 25 suitable influencers but you definitely need a workflow engine to process 25 (or more!) influencers in a campaign! And if you aren’t sure about how to quantify the success of a campaign, nothing impresses like a “look over here” wall of content. 

None of this is overt and so to make sure I understood the dynamic from a brand manager’s perspective, we reached out to some of our client friends who do a lot of influencer marketing and got some great feedback. As a result, we are going to close out this post with a quote and then turn the entire series over to a guest writer next week.  

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Bottom line: be aware of these silent dynamics and you’ll be sure to chart the appropriate course!