What Percentage of my Marketing Budget Should Go Toward Influencers?

Influencer Marketing has continued to grow over the past several years.  According to an eMarketer industry report, 2023 spend is projected to hit $6.2 Billion, a 23% increase from 2022!  While it is clear influencer marketing total spend is increasing, the question still remains for brands as to how much of their total marketing budget should be allocated toward influencers?

Determining the optimal allocation of your marketing budget towards influencers can vary depending on various factors such as your target audience, industry, goals, and available resources. While there is no fixed rule or percentage that applies universally, here are some considerations to help you make an informed decision:

What are some considerations to determine how much I spend on influencer marketing?

Some marketers allocate a specific percentage of their total marketing budget to influencer marketing. Common ranges vary from 15% to 30%, but this can vary depending on your industry and marketing objectives.  While there is no set rate to follow, there are some main factors you can use to help you make an informed decision around your influencer marketing budget.

Audience relevance: Evaluate whether influencers align with your target audience. Look for influencers whose followers match your ideal customer profile. Allocate a portion of your budget to influencers who can effectively reach and engage your target market.

Influence & Reach: Assess the influence and reach of potential influencers. Examine their follower count, engagement rates, and overall impact. Influencers with larger followings may command higher fees, but they can also reach a wider audience.

What types of companies are best suited for Influencer Marketing?

The answer here mainly depends on your campaign objectives and marketing goals. If your objective is brand awareness, influencer marketing can be effective. For product launches or sales promotions, you might allocate a larger portion of your budget to influencer collaborations.  Below are some common brands who have and continue to successfully allocate budget toward influencer marketing:

Fashion and Beauty: Influencer marketing is particularly prevalent in the fashion and beauty industries. Collaborating with fashion bloggers, makeup artists, and style influencers can help showcase products, provide styling tips, and create buzz around new collections.

Lifestyle and Travel: Influencers who focus on lifestyle, travel, and adventure can be excellent partners for brands in these industries. They can promote destinations, hotels, travel accessories, outdoor gear, and other related products.

Fitness and Health: Fitness influencers, personal trainers, and wellness advocates have substantial influence over their followers. Partnering with them can help promote fitness equipment, supplements, athleisure wear, and health-related products.

Food and Beverage:Food bloggers, chefs, and culinary influencers have a strong impact on consumer food choices. Collaborating with them can drive awareness and trial for new food products, promote restaurants, and create recipe content.

Technology and Electronics:Tech-savvy influencers can help generate excitement around the latest gadgets, electronics, and tech accessories. Their reviews, demonstrations, and tutorials can influence purchasing decisions among their tech-focused audiences.

Home Decor and Interior Design: Influencers specializing in home decor, interior design, and DIY projects can showcase furniture, home accessories, and decorative items. They can also provide design inspiration and tips to their followers.

Gaming and Entertainment: Gaming influencers and content creators have a dedicated and engaged audience. Partnering with them can help promote video games, gaming consoles, accessories, and entertainment content.

Personal Finance and Business: Influencers in the finance and business niche can offer advice, insights, and recommendations related to personal finance, investing, entrepreneurship, and career development. They can be valuable partners for financial institutions, investment platforms, and business services.

What are best practices for starting Influencer Marketing initiatives?

Diversification: Avoid putting all your marketing budget into one basket. Consider diversifying your marketing strategies and allocating portions of your budget to other channels such as social media ads, content marketing, search engine optimization, etc.

Testing and experimentation: Start with a smaller budget for influencer marketing and evaluate the results. Analyze the performance of different campaigns and influencers to determine the effectiveness and impact on your marketing goals. Adjust your budget allocation based on these insights.

Tracking and measurement: Implement tracking mechanisms to measure the impact of influencer marketing on your business. Monitor key performance indicators (KPIs) such as website traffic, conversions, sales, social media engagement, and brand sentiment to gauge the success of your influencer campaigns.