Welcome to Negronis with Nord. Today’s episode answers a viewer question on production value: Does “easier” content to create mean less money for creators? Watch to hear how content quality and production can (and should) impact influencer rates. You can submit your questions for future episodes here.
James: Welcome Negronis with Nord episode number 31! "Cast watch," you know, week six. I don't actually know, but we're still in the cast, unfortunately, which means I am obviously still not in a suit, which is incredibly distressing. This is in the morning which is why I'm not having a drink. Also. I have a huge meeting in like an hour to have to do these big meetings. I actually then get on a plane and go to Chicago for another meeting where I can't wear a suit. And I just cannot express what an existential problem this is causing for me. But hopefully we are almost through it.
As content becomes easier to create, will brands pay influencers less?
James: This week we're gonna focus on a question that we got from a viewer. I wanna kind of break this apart. I'll actually answer the question and then we're gonna zoom out and talk about what it is you're charging brands for and how to increase what you can charge and maintain those rates over a number of years. So as it becomes easier to create, do we think brands will be less likely to have pay the same rates to creators? Yes and no. Absolutely. Part of what a brand is paying for is production, right? And so this is something that happens, especially with micro-influencers.
Rates are generally set in advertising as a CPM. We've talked about that a bunch, that's a cost per 1000 impressions. A hundred thousand followers equals $2,000, right? That's like the general equation, those CPMs vary by platform. And obviously there's so many factors that go into pricing, but that is the like foundation of advertising is CPM. For micro-influencers, 10,000 followers. That would mean using that equation. It's $200, but we can't really pay someone $200. Right? And so part of what a brand is paying for is that production, right? Understanding that like, if you have 10,000 followers or a million followers, there was going to be an amount of work that goes into creating that content. And if you are a professional photographer, if you are doing really intense edits of your TikTok videos, like you can up the amount that you charge based on that production value.
So by the same logic, if those videos become easier to use, if you are spending less time producing them, it's gonna be harder to defend the production. Part of the content that you're creating. Let's say J crew reaches out and they want me to do a project for them. Yeah. Send me an outfit and I'll take a couple photos and post about it, whatever. Right. I can do something really low production like that. Now, if I say to them, what I'd really like to do is get every dress shirt you have and shoot this thing and fast transition where the outfit is changing. As I'm walking through the street or something like you pitch this kind of bigger idea, that's maybe gonna take a videographer. It's gonna take changing your outfit 20 times. It's gonna take a, a lot of editing. Now let's say you generally charge a thousand dollars. You say I'm gonna need another thousand for production.
Negotiate your rate based on production value
James: So you should definitely be using production and the amount of production you have to do to negotiate your rates. And that should be part of it. Especially if you're a micro, the kind of normal CPM isn't giving you the money that you think you deserve, then, you know, making sure you talk about that production is important.
Also important to understand if you have, you know, there are things that are lower production and, and maybe you can go a little lower on the rates for that, right? If the brand doesn't have as much budget or it's a negotiation tactic, if you usually get 2000 and they have 1500 and you still want to do it, you might say, okay, well, I can't do this super produced thing. I can, I can kind of like shoot myself or I can do an iPhone thing or whatever it might be. So that you feel like the $1,500, you still feel happy with that money, even though it's, it's less than you would generally charge. So that, that production value and what you're putting into it can impact that price.
Influencers are not just impressions
James: More importantly, you wanna make sure as an influencer, you aren't just an impression. Brands aren't just paying to reach your followers and say, it doesn't really matter. Like who I work with as markets become commoditized, it drives pricing down. The vast majority of people who fly pick the cheapest flight in the most convenient times for them be that American United Delta or spirit air. There's a much smaller portion of, of the world that is super loyal to a specific airline. I obviously would never fly any of those airlines. I just fly Delta.
And that is because air travel has become commoditized. And so for most people, an airline seat is an airline seat. It doesn't matter. Who's flying. It's about the cheapest way to get from point a to point B. Now take that to the influencer space. You wanna make sure you don't get into the place where price is the determining factor of whether or not a brand works with you. You're in a race to the bottom, right? Because now it's about not, who has the most engaged community who creates the best content, who is the best fit for this brand. But who's charging me the least amount of money for the most amount of followers. That's like a game we don't play, you know, Fohr we're, you know, really proud that the rates that we pay influencers are fair market value for what they are delivering.
"You want to make sure you don't get into the place where price is the determining factor of whether or not a brand works with you." - James Nord
We tell brands that we will not undercut influencers. We will pay them. You know what we feel like the market is saying it is worth, but a lot of brands are out there, price hunting. And we actually lose a lot of deals because brands say, you know what? I can just do this myself and, and take advantage of influencers and pay them less than, than maybe they would technically deserve.
You wanna make sure you don't get into the place where price is the determining factor of whether or not a brand works with you.
How you do that is:
Making sure something about the content you produce is exceptional.
They want you to interpret their brand and tell that story for them. And they're willing to pay you to do that.
And yes, your following is important because they need that scale. They need to tell that story to a broad audience.
But ultimately they're saying, this is the person we want to work with. And so another way to do it is having a really strong community. I am speaking to these 200,000 people or 5,000 people, whatever the number is, but when I'm speaking, they are listening or they're engaged in a way that even, maybe with the other accounts that they follow, they're not engaged.
Now, as a brand, I understand in a different way, why I should work with you. You were explaining to me in a different way, why you're charging what you are while the brand-influencer relationship is what we talk about.
The actual thing, the brand wants is, is your audience. They have to go through you to gain access to your audience, but that's what they want. This is how media companies make money, right? They say 15 million people watch this NFL game. If you want to talk to those 15 million people, you have to pay us, we've done the work, and now we're gonna rent that audience to you essentially for money. So that's what you're doing. They need to understand why that audience is special and why your ability to communicate to that audience is special. And that is what will allow you to charge higher rates and also defend those rates. And as time goes on, you know, be able to increase them.
The followers you have are more valuable than the ones you want
James: If influencer followings become commoditized and prices start to fall dramatically, you will have the ability to say, right, but I'm not. I'm not that right. I have this special thing going on. And it's why it is absolutely more important to keep those 50,000 engaged than to get to 60,000 this year, it's less sexy. And sometimes in some ways like less exciting growth is really exciting.
The work you do is so public, you may see yourself as a failure. If that following doesn't grow, it's hard to see frenemies or enemies, gaining followings really quickly if you're not, but incredibly important, right? Because if you get from 50,000 to 75,000, but you've lost touch with the 50,000, then ultimately you've lost. Actually the only way to grow is probably having that engaged community.
In conclusion pricing is a really complex issue. We actually have a full, like 60 minute webinar that will link to all about pricing. What is happening in influencer pricing right now? What are the factors that drive pricing up? Ultimately, if we kind of boil down to the root of this, it's all about you being able to, you know, succinctly and clearly communicate to brands. What is special about your audience, about your relationship with that audience and how you communicate to that audience? So focus on those things, be able to answer those questions really easily. And I think you'll have a much easier time in negotiations defending your pricing. Keep the questions coming and we'll see you next week. Cheers.