Why Paying Influencers With A Cost-Per-Engagement Model Is A Bad Idea

Holly Pavlika

SVP, Marketing & Content at Collective Bias
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There’s been a lot of buzz lately about the complicated business of influencer marketing. The FTC just cracked down on Warner Bros. for a YouTube influencer campaign that failed to disclose sponsorships, the most-liked Instagram post of all time was likely illegal, and to make matters even trickier, no one in the industry can seem to agree on a standard method of payment.

The conventions of influencer marketing are still malleable right now, and it will be crucial not to let bad habits and practices take hold. A recent article in Digiday predicted that a cost-per-engagement model for paying influencers is on the horizon. There needs to be a taming of the Wild, Wild West when it comes to influencer pay models, which are all over the map, but a cost-per-engagement (CPE) model is a bad idea for the industry as a whole—and it will only lead to more challenges.  

There are definitely some pros to this model, so the appeal is warranted. CPE focuses the attention on influencer selection, the quality of their content and the importance of data. It also stops the misnomer that it’s all about the size of the influencer’s following, when in essence, study after study shows it’s the middle tier influencer who gets the most engagement.

This does not mean, however, that influencers should be taking the risk of uncertain income associated with the CPE model. Here’s why: for influencers, CPE encourages fraudulent practices that harm their authenticity and devalue their content. To boost engagement, influencers can game the system and enlist their communities to comment, click on links and share. They might buy traffic and likes, enable repeat-sharing, or even incentivize their audience to engage by using sweepstakes or giveaways. It’s contrived metrics at best.

CPE encourages fraudulent practices that harm influencer's authenticity. #influencermarketing Click To Tweet

CPE puts the influencers and brands at risk of focusing on the wrong things—like meeting engagement numbers—instead of the creation of quality content and better storytelling that led to the formation of “influencer marketing” in the first place. While influencer reach is an important and immediate aspect, we shouldn’t forget that content has an ongoing value. Brands that employ influencer campaigns are, of course, able to benefit from the breadth of each influencer’s network. However, this reach only occurs for a limited time whereas any content they produce continues to live on. Pulling focus away from content means brands and advertisers are only shortchanging their investment by diminishing influencer marketing’s most vital long-tail benefit.

Instead of CPE models, influencer companies should be taking on the risk and employ incentives to encourage influencers to work on behalf of brands in an honest and transparent way, as well as measure and motivate them to produce their best work. The ideal pricing model understands the optimal price to pay an influencer based on context, audience, past performance, seasonality and more.

It’s not to say that all influencers will game the system if paid on a CPE basis. However, at a time when the FTC is cracking down on influencer marketing and all eyes are on its authenticity, we need to come together as an industry to develop a more transparent approach, starting with payments. Moving away from CPE is one step in the right direction—equally as important as disclosing sponsorships and working only with companies and influencers that comply with regulation.

Disclosure: Collective Bias is an influencer-generated content marketing company that pays influencers on a variable-per-post model.

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Holly Pavlika

SVP, Marketing & Content at Collective Bias

Holly oversees marketing and PR. Holly, also a blogger, founded MOMentumNation while serving as the Executive Creative Director and Managing Director at Big Fuel, a pure play social media agency. She is an award-winning creative marketing industry veteran who was recognized in 2012 by Klout as the “most influential agency person” and uses her voice for social good with 10X10 Educate Girls, Every Mother Counts, Global Poverty Project and the UN Foundation Shot@Life campaign.