[Influencer Agreements] Payment Systems - Flat rate & Commission based

You've built a following, and now you have a possible Influencer contract with the brand. What is the payment method you should push for? Flat Rate? Monthly? Fee per post? Travel coverage? There is no RIGHT system, but what is the most common system based on data?

Flat Rate & Commission

But this may be a bit nuanced in that Commissions are rarely 100% commission in that "everyone mentioned they include a flat fee component for content creation along with a variable component for performance."

Let's first take a look at the 3 most common payment systems. <from : Refersion>

• Flat Rate Payment

A flat rate is one of the more common types of payment for influencer posts. With this, you agree to pay a certain dollar amount for a certain type of promotion. For example, you might pay an influencer $500 to create a post on Instagram. The most common starting point to calculate a fee for flat rate payment is one cent per follower ($10 per 1,000 followers). Consider the factors above as well–YouTube influencers will often charge about $20 per 1,000 subscribers, while TikTok influencers will often charge as little as $5 per 1,000 followers.

• Commission on Purchases

It’s also possible to use an affiliate marketing strategy for influencer payments. With your affiliate marketing program through Refersion, you can provide an influencer with a link or referral code that will provide them with a percentage payment when they direct new customers to your website. If you’re planning to use an affiliate marketing strategy, then you’ll usually need to allow the influencer complete creative control, as they have to put their own money, time, and energy into the product with no guarantee of payment. Commission rates around 10-20% are common, though every industry has its own baseline.

• “In-Kind” Payment

Especially when it comes to nano- and micro-influencers, “in kind” payment, where you provide a free product in exchange for a review or a post directing people to your account, can be a great way to spread your product. However, be aware that this strategy will only provide you with very minimal content creation options. Many brands choose to send out free products to influencers who have expressed interest in their product without assuming that the influencer will make content.

There are two sources that say different payment systems are dominant.

1. Half of the Payments to Influencers are Made as a Percentage of Sale - Influencer Marketing Hub - In their 2024 report ("State of influencer Marketing 2024: benchmark report; August 2024), says that roughly half of the payments had been done as a 'percentage of Sales' is the most common payment system, a head of 'Flat Rate' which they stated as 24%.

2. we observed one affiliate commission-based payment for every four flat fee payments. - Lumanu;

In their 2024 analysis of 250,000 payments to influencers, it was found that flat fee payments are four times more common than commission payments, making flat fees the dominant payment method.

As we encounter an increasing number of Influencer Agreements, we’ve begun collecting contract & market data to better analyze these contracts. We’re working on an ‘Influencer Agreement Analyzer,’ which we hope to release soon. If you’d like to be notified when it’s available, please sign up for our newsletter. JIGO Newsletter