As a content creator, brand deals can be one of your most lucrative income streams. However, when a brand reaches out, one of the biggest challenges is figuring out how much to charge. Ask for too little, and you’re leaving money on the table. Ask for too much, and you risk losing the opportunity altogether.
So, how do you determine the right price? Let’s break it down.
Building Your Network of Creators
One of the best ways to figure out what to charge is simply to ask other creators. If you have a network or community of other content creators, you can ask them what they get paid for different types of content or by different brands. They can also help you research the company to determine if they are legitimate.
Don’t have a network? A lot of content creators and influencers build communities on platforms like Discord which can be a lot more accessible there. You can always DM them on social media and try to connect directly. Of course, most creators are very protective of their privacy, so please be respectful in your communications.
Digging Deeper for Information on Earnings
Many creators are very transparent about their earnings. There are plenty of YouTube videos of influencers sharing their earnings on the platform, as well as their brand deals and sponsorships. Try finding somebody in your niche who has shared their numbers publicly.
You can also use paid membership sites that gather brand payment information, such as FYPM, to find information about what brands pay. If neither of those options fit your needs, a web search for “BRAND NAME pay for content creators” can give you some good information about how well the brand pays.
Calculate Your Worth
There’s no one-size-fits-all pricing model for brand deals, but you can use certain key criteria to figure out your rates.
Your Audience Size and Engagement Rate: Brands don’t care just about your follower count, so also calculate your engagement. Even small creators can charge high rates if their followers are highly engaged.
Your Platform: Different platforms have different industry standards for pricing. For example, an Instagram post may earn you $100–$1,000 per 10,000 followers, a TikTok video could run $100-$500 per 10,000 followers, and a blog post could be worth $200–$2,000.
Your Niche and Industry: Some niches, such as finance or tech, attract higher-paying brand deals because the types of products those brands are selling are high value. Lifestyle, fashion, and health/beauty also tend to have strong sponsorship opportunities because they can lead to a high volume of sales.
Your Time: A simple Instagram Story will cost less than an in-depth YouTube video with editing because it requires less of your time. Look at how long a particular project will take you, what hourly rate you will need to earn to cover your expenses, and what supplies or products you might need to purchase to produce the content. Also look at the total number of deliverables required. Factor those elements into your pricing.
Content Restrictions or Exclusivity: If a brand wants you to be exclusive to them, either in a particular niche or overall, factor in the loss of income from other brands to ensure you are earning enough. If you won’t be allowed to monetize the content in other ways, you’ll want to charge enough to cover the other income you might lose. And if a brand wants to use your likeness or content in ads on other platforms, factor licensing into your pricing.
Done-for-you taxes and bookkeeping for creators
Use Some Common Pricing Models
Once you’ve determined what your content is worth, you can decide how to pitch your pricing to brands. These are some common pricing models that content creators just like you use to work with brands.
- The 1-3% Rule. You can charge between 1% and 3% of your total follower count per post. For example, if you have 50,000 Instagram followers, you would charge brands $500–$1,500 per sponsored post.
- CPM. This pricing model is based on print advertising terminology. CPM stands for cost per thousand impressions. In this model, your rates are based on how many views your posts typically get. Many creators are charging between $10 and $50 CPM, so if they typically get 100,000 views and their rate is $30 CPM, then each post or video would run $3,000.
- Hourly. For this pricing model, estimate how many hours it takes to create the content (scripting, filming, editing, posting, engaging) and charge an hourly rate. If you charge $50 per hour and you estimate that the project will take 10 hours to complete, then you should charge $500 (or more).
Be Prepared to Negotiate
Business relationships often include negotiation. Even though it can seem scary, it is normal and expected. And the more you do it, the more natural it will feel. Always start higher than your minimum acceptable rate. Ask about their budget before quoting a price. Offer tiered pricing (e.g., $1,500 for one post, $2,500 for two, etc.).
Justify your rates with engagement metrics and past campaign success. Make sure you’re not only tracking your own data but are also asking your brand clients for their own success metrics so you can build your portfolio.
Track Your Earnings
There are a lot of benefits to tracking your brand deals. The first is that you keep a historical record of how much you charge and make more informed pricing decisions in the future. As you build your brand, you can increase how much you charge for brand deals. You can also share this information with your network so you can build a better understanding of your worth!
Taxes will go a lot more smoothly when you track your earnings. All the income you earn from brand deals and sponsorships is taxable, so having those records will help you calculate what you owe. Also, track your expenses so you can lower your taxable income and keep your bill low at the end of the year.
Conclusion
Pricing brand deals is both an art and a science. Although these guidelines give you a starting point, your rates should reflect the unique value you bring. We can’t stress enough how important it is to track your earnings. That’s where we come in. We offer tax help, monthly bookkeeping, a dedicated accountant, and more to content creators just like you. Book a call with us to see how we can work together.