Audience Growth

Can Smaller Influencers Make Good Money From Brand Deals?

by Teresa Lam ยท Published Feb 10, 2023

It’s often believed that creators need a massive following to make good money from brand partnerships. However, a new report published by Hashtag Pay Me — a business that offers a rate calculator for sponsored posts — suggests that smaller influencers can still have a great return on investment working with brands.

The report covers how creators of different follower sizes got paid for brand deals between 2021 and 2022. It surveyed over 400 U.S.-based TikTok and Instagram creators. For research purposes, Hashtag Pay Me also collected and reviewed brand partnership contracts from some of the participants.

Read on for three key takeaways from the report. For more on influencer marketing, industry experts shared their predictions for 2023.

Despite having fewer followers, small influencers can get decent return from brand deals.

According to the report, creators don’t need millions of followers to make an income from sponsored content. While it confirms that the more followers a creator has, the more earnings they can get per post, there’s an interesting finding: Small influencers still make a good return on investment when considering the time spent building their audience and how much they are compensated.

A graph comparing the average rates different creator tiers can charge per sponsored post.

On average, mega- and macro-influencers (those with over a million and 500k-1m followers respectively) can charge higher rates than smaller creators. For instance, a mega-influencer can make approximately $15,000 per sponsored post on Instagram. On the other end of the spectrum, mid-tier (200-500k followers) and smaller influencers make about $5,000 or less per post.

However, in a graph that compares percentages of creators’ pay to their followers, it’s revealed that smaller influencers can actually make a decent return from brand deals. Nano-influencers (2-10k followers) and micro-influencers (10-50k followers) sit at approximately 7.5% and 3-5% respectively. Meanwhile, mid-tier, macro, and mega-influencers are found under 2.5%. Based on these numbers, Hashtag Pay Me concludes that creators “don’t have to invest significant time building a large audience to make good money from sponsored posts.”

On average, Instagram creators earn more from sponsored content than TikTok creators.

With over 1 billion monthly active users, TikTok is arguably one of the hottest platforms for brands to advertise. That said, it appears that Instagram is still the preferred channel for influencer campaigns.

A graph comparing the average spend on Instagram and TikTok influencer campaigns in 2021 and 2022.

The report states that creators can typically charge 200% more for sponsored content on Instagram than on TikTok. Hashtag Pay Me explains that Instagram’s predictability — versus TikTok’s seemingly random algorithm — is probably why advertisers favor the platform. According to data from the report, marketers have reduced the average amount they spend on TikTok over the last two years, while increasing spend on Instagram.

In terms of specific influencer tiers, the report shares that micro- and mid-tier creators on both Instagram and TikTok saw major growth in 2022. Rates for these two groups of creators have increased by 27% and up to 80% year-on-year respectively.

High-converting creators are in demand in 2023.

Hashtag Pay Me predicts that high-converting creators will see advertiser preference in 2023. In particular, “smaller, more skilled creators” are sought after by brands now more than ever.

“Being able to provide exceptional content at a lower reach will still wow advertisers,” the report reads. “And advertisers are willing to pay more for these types of creators.” Even with a smaller audience, creators with excellent editing skills and the ability to create content with professional equipment have a competitive edge against their higher reach, lower skilled peers.

While the volume of influencer deals may decrease as businesses tighten advertising budgets, the report suggests that small creators still have the potential to earn money from sponsored content. According to data collected by Hashtag Pay Me, the average pay for smaller influencers has remained relatively consistent year-on-year. Moreover, marketers have increased spend with nano-, micro-, and mid-tier creators over the last two years.

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About the author

Teresa Lam

Teresa Lam is The Leap's managing editor and a writer with a focus on creative communities. She was previously features editor at Hypebae.
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