3 Important Factors to Consider When Setting Your Rates
One of the biggest questions we receive from Creators is: how much should I charge for my content? It would be so helpful if there was one perfect formula to calculate the price of sponsored posts, user-generated content, and every other type of brand partnership. But until that day comes, we’re here to provide insight to guide your money-making journey.
When Creators negotiate rates with brands, they often focus just on their follower count. But knowing your worth and valuing your content means understanding everything you bring to the table.
The truth is, there’s no one size fits all approach when it comes to Creator pricing. In fact, there are many factors to take into account when setting your rates. With the help of Justin Moore, founder of Creator Wizard, an educational platform that helps Creators negotiate brand deals, we’re laying out three important Creator pricing considerations below.
1. The Brand’s Goals & Your Potential Results
Simply put, it’s not just the sheer size of your audience that matters: it’s how your audience can help meet a brand’s objectives during a campaign. You may have a small audience, but they could be powerful spenders. Or maybe your power lies in creating viral TikTok videos that build buzz and set trends. Pricing yourself accordingly means taking a varied approach for each campaign; and to do that, you first need to understand the brand’s goals.
Moore believes goals are a key component to rates. “Understanding the brand’s goals…is something that not a lot of Creators consider when determining their rates,” says Moore. But, there are “three main campaign goal types that every brand is going to care about when they’re working with Creators.”
Goals that brands focus on when building a Creator campaign may include brand awareness or conversion.
If a brand is launching a “brand awareness” campaign, their goals will be to garner reach, engagement, and buzz—this might be for a new product launch, an event, a rebrand, or another initiative that they want their audience to know about.
According to Moore, “your negotiating leverage…when it’s a brand awareness campaign is so much higher” than in other types of campaigns because there are more factors—like engagement, views, and overall audience sentiment—to consider.
So if you boast strong reach and engagement, you may be able to make a case for a flat fee for a brand awareness campaign.
For brands focused on conversion, their goal is simple: they want sales. If you maintain an active affiliate marketing strategy, then how you price yourself may depend on what kind of sales you can generate for a brand. And the commissions you earn may factor into your overall pricing model.
For example, if you typically drive $10,000 in product sales for a brand when you post about an item, you might factor that into your pricing. But if your true strength is in creating strong brand awareness, you may not price yourself as high for conversion-focused campaigns.
2. The “Due Rule”
Taking into account that campaign requirements are one of the most important pricing factors, the “Due Rule” is Moore’s helpful framework for thinking about campaign requirements.
“DUE” stands for: Deliverables, Usage, and Exclusivity.
First, “the main thing that you need to think about when it comes to scoping a deal is what are the deliverables,” says Moore. These deliverables might include the number of posts, required platforms for posting, the due date, and any content produced for repurposing by the brand. Different deliverables require different rates. “Is it going to be a photo or a video? Those require different levels of work,” explains Moore.
Understanding the work involved in a campaign will better help you value your time.
Now, let’s talk about usage rights. A brand may be interested in a campaign in order to whitelist the content, which means they want to leverage the content you produce on their own marketing channels. In fact, according to Moore, it may be that “the primary reason a brand wants to partner with you is to get great, compelling content that they can use in other ways beyond you posting it on your platform, whether that’s posting it on social media, posting it on their website, using it to run paid advertising, etc.”
Understanding how brands intend to use and repurpose your content gives you a better picture of the scope of the partnership. Moore believes you should ask the brand these questions to understand their usage intent:
- Do you intend to organically repost this content on your social platforms?
- Are you going to boost the content?
- Are you running paid advertising and whitelisting it?
- What is your intended usage duration?
Accordingly, Justin recommends factoring this intended usage into your pricing.
Finally, there’s “exclusivity.” This means that the brand doesn’t want you working with any competitors during the campaign duration.
If a campaign has exclusivity requirements, you may be able to factor that into your pricing, as “that represents a direct opportunity cost for you,” says Moore. If a competitor comes to you for a campaign, you’ll have to pass on that deal, meaning you’re giving up other financial opportunities.
Moore argues that you should include those potential financial costs into your pricing, and also see if you can limit the exclusivity to a narrow timeframe or category.
3. A Customized Campaign Package
Many Creators have standardized rates they send to each brand, offering them à la carte pricing for one Instagram post or a TikTok video. But since each campaign has different goals and requirements, your pricing should reflect a package of content you can create to meet these goals.
“When a brand reaches out to [a Creator] and asks them, ‘what’s your rate for one Instagram post or one YouTube video,’…the biggest mistake that a lot of Creators make is they just spit back one number,” says Moore. Instead, he suggests that you offer the brand “multiple different packages” while “helping them understand why working with you in these heightened ways is going to help them move the needle relative to their goals and their objectives that you asked them about.”
Additionally, providing package options spotlights all of your capabilities and strengths. Maybe the brand reached out to you for an Instagram post, but you send them a package that demonstrates you have a 20,000 person newsletter subscriber list, or you have a successful podcast. Essentially, you’re telling the brand, “I’ve got all these other ways in which I can serve you and serve your perspective, help you access your ideal customers. The brand may have never known that you had these other distribution channels in ways in which you could amplify the partnership,” says Moore.
While there are other factors that might affect your pricing, if you’re just getting started on your monetization journey, these three considerations can help you better understand your potential value to a brand.