question we often receive from brands is, "How much should I allocate to an influencer campaign? What should my budget be?" This article will break down how to think about your influencer budget, specifically if you are running a drive-to-retail campaign for a newly launched product at a new retailer. Want to follow along with the exercies throughout the article? Download our free influencer marketing budgeting calculator HERE.

The Importance of Drive-to-Retail Influencer Programs

Many brands assume that breaking into a new retailer means instant success. They think that once the product is on the shelf, customers will discover it, buy it, and the brand will thrive. This is a significant misconception. The real challenge is moving the product off the shelf to meet your velocity targets, which is crucial to staying on the shelf, unlocking more retail partnerships, and ensuring profitability.

Retailers often require or encourage participation in various marketing programs like end caps, demos, price cuts, coupons, and other trade promotions. Increasingly, they are also asking brands to fund influencer campaigns that co-promote the retailer and the brand. Influencer marketing is a critical piece of any strategy because it extends your reach beyond in-store customers to attract new customers and bring them into the store with your product in mind.

Allocating Your Influencer Campaign Budget

To help you estimate a reasonable budget for drive-to-retail influencer programs, we have developed a calculator. Let's break it down:

Drive-to-Retail Influencer Campaign Defined

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A drive-to-retail influencer campaign involves influencers in your target regions visiting the specified retailer, creating a "shop with me" experience. This includes capturing the storefront, heading to where your product is located on the shelf, showcasing the checkout experience, and demonstrating how the product enhances their lives. This could be through recipes, taste tests, reviews, or personal stories.

Estimating Budget Based on Store Count

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We estimate that it takes about 1,000 organic social media views of an influencer post to drive one sale per week. Here’s how you can use this calculator:

• ‍Store Count: Start with how many doors you are in. For example, let's say you are in 1,000 stores.

• ‍Marketing Mix Percentage: Assume 100% of your marketing budget goes towards influencer marketing, meaning no other money would be allocated to other trade promotions or marketing initiatives.
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For every 1,000 views, driving one unit sold per week per store means the number of influencers needed and the views required will be very high. For example, with 100% of your marketing mix dedicated to influencers, targeting 4 units sold per week would require 4 million organic influencer views. Getting to that number could look like tapping anywhere from 10 to 500 influencers, depending on their size and reach. I'll explain this further in the next example.

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Practical Budget Allocation

Realistically, dedicating 100% of your budget to influencers isn’t feasible, as you would typically want a mix of social media, retail media, in-store promotion, and other marketing items like trade shows and packaging redesign to be retail ready. Allocating 10% of your budget is more practical. For example, to hit the target of 4 units sold per week per store, you would need 400,000 views and about ~44 nano and micro-influencers, totaling an influencer budget of $22,000.

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This calculator allows you to adjust numbers based on your specific targets and budget constraints, giving you a starting point for your influencer marketing budget.

How Crafted Prices Influencers

At Crafted, we price creators based on a $33 CPM (cost per thousand impressions). The cost of an influencer via the Crafted platform on average is $500 for an influencer that gets a median of 9,090 views, which is how we got to 88 influencers for 800k views. Here's the pricing breakdown:

• Reach Rate: For every 1,000 views an influencer generates, we charge $33.
• Baseline Fee: We include a baseline fee of $200 for content creation and usage rights in perpetuity, regardless of the creator's size.
• Calculating Costs: For a creator averaging 9,090 views, we divide by 1,000 to get the reach rate ($9.09), multiply by 33, and add the $200 baseline fee, resulting in $500.
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We use a programmatic approach to set the viewership metric for creators, analyzing their last 300 videos and taking the median.

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Understanding Influencer Marketing Costs in the Broader Market

The way Crafted sets rates for creators is a bit unconventional, but a sign of where the industry is headed as performance marketing commands more and more budget over brand awareness. Our process also saves up to 10 hours per week on negotiating rates with creators. However, if you do choose to negotiate rates with creators yourself, here's what you can expect. When planning your influencer marketing budget, it's essential to understand the various factors that influence costs. These include the platform, influencer reach, engagement rates, and content quality.

Instagram Influencer Pricing

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Instagram remains one of the most popular platforms for influencer marketing. Pricing varies widely based on follower count, engagement rates, and the type of content. For instance, a nano-influencer (1,000-10,000 followers) might charge between $10-$100 per post or even post in exchange only for product, while a macro-influencer (100,000-1 million followers) could charge $7,000 or more per post.

TikTok Influencer Rates

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TikTok is rapidly gaining popularity for influencer marketing. Rates on TikTok can be slightly lower than Instagram due to its younger audience and the platform's focus on video content. Nano-influencers on TikTok might charge $20-$200 per post, whereas macro-influencers could demand $2,000-$20,000 per post.

Overall, influencer rates are still very much the wild west when quoted by the creators themselves or by talent agents. I have seen CPM and performance based rate setting come up more recently, however, the CPM based rates are closer to $100-$200. Not only does Crafted's approach save you significant time, it also saves you up to 90% of what you may normally pay, even when negotiating CPM rates.

Influencer Marketing Budget Breakdown

To effectively allocate your influencer marketing budget, consider the following steps:

• Define Your Goals: Determine what you want to achieve with your influencer campaign. Are you aiming for brand awareness, driving sales, or increasing engagement?
• Identify Your Target Audience: Understand who your audience is and which platforms they use the most. This will help you choose the right influencers and platforms.
• Set a Budget: Based on your goals and audience, set a realistic budget. Remember to factor in not just the cost of influencer fees but also additional costs like content creation, usage rights, and campaign management.
• Select Influencers: Choose influencers who align with your brand values and have a genuine connection with their audience. Micro and nano-influencers often provide higher engagement rates and more authentic content.
• Measure Success: Use metrics like engagement rates, reach, impressions, and conversions to measure the success of your campaign. This will help you optimize future campaigns.
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Case Study: Walmart Influencer Campaign

To illustrate the budgeting process, let's look at a hypothetical influencer campaign for a product launch at Walmart.

Campaign Objective: Drive sales and brand awareness for a vegan jerky product at Walmart stores across the country.

Velocity Target: 5 units sold per store per week

Store Count: 2,000 Walmart stores.

Marketing Mix: Allocate 10% of the total marketing budget to influencer marketing.

Budget Calculation:

• Views Required: For 5 units sold per week per store, we need 5,000 views per store (based on 1,000 views = 1 sale).
• Total Views: 2,000 stores x 5,000 views = 10,000,000 views.
• Budget percentage: 10%, bringing the target down to 1,000,000 views.
• Influencer Count: Assuming each influencer generates 10,000 views, we need about 110 nano and micro-influencers
• Influencer Cost: At $500 per influencer (based on our earlier calculation), the total cost is $55,000.
• Additional Costs: Agency, software, and/or initiation fees and the cost of the product gifted to influencers
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Optimizing Your Influencer Marketing Strategy

To maximize the effectiveness of your influencer marketing spend, consider these tips:

• Leverage Micro and Nano-Influencers: These influencers often have more engaged audiences and can provide a higher ROI compared to macro-influencers.
• Diversify Platforms: Don’t rely solely on one platform. Use a mix of Instagram, TikTok, YouTube, and other relevant platforms to reach a broader audience.
• Focus on Quality Content: Invest in high-quality content creation. Influencers who produce engaging, authentic content can drive better results.
• Track Performance: Use analytics tools to track the performance of your campaigns. This data will help you understand what works and what doesn’t, allowing you to refine your strategy.
• Engage with Influencers: Build long-term relationships with influencers. Collaborate with them on multiple campaigns to maintain consistency and trust with their audience.
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Conclusion

Influencer marketing is a highly effective and essential tactic for consumer brands. However, it can be a complex process involving creator outreach, rate negotiation, and contract management. Crafted simplifies this process by pre-negotiating terms, pricing creators, and geo-locating them, helping brands scale their influencer marketing efforts efficiently.

If you have any questions or need assistance in scoping out your next retail launch influencer campaign, please don't hesitate to reach out. We are here to help you succeed. And don't forget to download your budgeting calculator for free HERE!

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