Hiring Kylie Jenner for Your Brand is Cheaper than a Super Bowl Ad

Contextualizing Influencer Ad Pricing

Forbes' recent cover model and "self-made" billionaire, Kylie Jenner, charges brands $1,000,000 per Instagram post to promote their products. It sounds expensive but are companies like Teami or Bondi Sands savvy marketers or are they wasting their precious advertising dollars? Let's break down the math to see if it's a scam or purely sticker shock.

To provide some context to Kylie's costs, it's helpful to look at the CPMs of popular media buys in the United States. A CPM or Cost per Thousand Impressions is the most common metric used by marketers to compare performance among different platforms and campaigns.

For example, to have an ad seen 1,000 times on Instagram, brands pay anywhere from $5-20 CPM depending on the placement (In-feed or Story), content type (photo or video) and the objective (clicks vs. impressions). Of course, that cost does not include the price the agency or freelancer will charge to produce the ad.

One of the benefits of working with influencers is that they develop and capture the content on behalf of the brand. These costs are typically baked into the price the influencer receives so it’s a great way to offset some of the overhead production costs.

only 20-30% of influencers’ followers actually see their posts on instagram

Crunching the numbers

Using data provided by the Instagram Graph API,  we anonymized and analyzed the impression rate across more than 500,000 posts to determine a benchmark. The impression rate is the amount of impressions divided by followers at the time of publication. There’s no way every single person that follows an influencer will see every single post, therefore we know it’s practically impossible for an impression rate to hit 100%. Our data shows that it's more accurate to say that only 20-30% of an influencer’s followers will actually see a given post on Instagram. Compared to other platforms like Facebook where it hovers as low at 1%, this is still a very strong organic impression rate. This is why Instagram has become the go-to platform for influencer marketing.

It's important to note some posts in our data set generated as high as a 75% impression rates which correlates with higher levels of engagement per post. As more people like and comment on a post, Instagram's algorithm will boost the post and show it more frequently in to users in Feed and Discovery. This increases the likelihood that more people will see the post, and further engage, driving the impression rate even higher.

Comparing Media Costs

Using these impression rates, it's possible to calculate the CPMs based on the prices provided by WWD. This data was mapped against the CPMs of popular traditional entertainment media buys like the Monday Night Football, The Super Bowl, and The Academy Awards (based on 2017 estimates, provided by Forbes).

Even if a celebrity has a 15% impression rate, their posts will reach a large audience at a cost efficient rate when compared to the traditional media buys. Let’s imagine Kylie has a 40% impression rate, which is feasible given her high engagement levels. If so, she would be 50% more cost efficient at a $22 CPM vs. a Super Bowl spot at $45.

Let's also remember that social content is actionable and marketers can drive consumers directly to a product landing page with one click or swipe. Now it's starting to look like celebrities are a serious alternative to consider.

Justifying the purchase

With any expensive purchase, it's important to understand the actual & perceived value received for the amount spent. Yes, it's true that a private jet is objectively expensive, but for a billionaire, the value they receive (time saved, convenience, comfort, etc.) may be worth the amount spent.

Solving the math isn't too difficult and the data is fairly easy to collect. Be clear about data expectations pre- and post-campaign when engaging influencers. Before signing the contract, request the number of impressions per post they've received on the last 10 to 15 posts. Typically an influencer will share this information via screenshots of their latest posts.

To calculate the impression rate for each post, take the number of impressions and divide by the number of followers on the publish date. Now that you have 10 to 15 impression rates, let's look at the median value to remove unwanted outliers. Once the math is complete, the brand has a clear understanding of the impressions to expect for each post during the campaign. Use these estimated impressions to calculate the CPM at various price points.

As the campaign wraps, ensure the influencer shares screenshots for all campaign posts to compare to the original estimate. Even better, Tagger’s campaign management workflow automates the data collection process to save precious time and effort.

It's time to move beyond follower counts as a north star in influencer marketing. When working with influencers, it's critical to know the true value by looking at the estimated impressions and CPMs. From there, it's easy to compare this spend against the traditional & digital channels in your marketing mix.

Tagger helps agencies & brands run the math on their influencer marketing campaigns. Contact a specialist to dive deep into a past campaign or imagine a new one.