Gigapay: Payment Delays Hamper Influencer Marketing Growth
A shift toward performance-based compensation models in influencer marketing is being held back by payment delays and complex cross-border compliance requirements, according to a new industry report from Gigapay.
The research, which interviewed 13 executives at influencer marketing agencies and brands, reveals that 49.6% of influencer payments are now based on sales performance metrics rather than flat fees, according to the Influencer Marketing Hub's 2024 benchmark report.
This marks a fundamental change in how creators - individuals who produce content for social media platforms - are compensated for their work. Traditional flat-rate payments now represent 24.1% of compensation arrangements.
Cross-border complexity
Influencer marketing agency The Influencer Marketing Factory reports that processing payments to international creators often face delays of up to 30 days due to regulatory requirements and banking system limitations. These delays affect both large-scale campaigns and micro-influencer partnerships.
“It's not just about making payments anymore, but ensuring we are on the right side of evolving laws in each country,” says Nicla Bartoli, an Executive at The Influencer Marketing Factory.
For stylink, a creator payment platform that offers next-day settlements to European creators, international payments outside the EU can take up to 30 days to process due to compliance checks and payment infrastructure limitations.
These delays are exacerbated when creators are not registered as businesses, making tax documentation and VAT compliance more complex.
Nestlé Nordics reports having to exclude certain creators from campaigns due to tax compliance issues.
“We avoid situations where we're paying influencers who aren't registered businesses, because of tax compliance and that is unfortunate. There is much talent out there that would be worth investing in,” says Amalie Norstef at Nestlé Nordics.
Currency conversion fees present additional challenges. Antler Social, an influencer marketing agency, notes that creators often receive less than expected after conversion fees and bank charges are deducted.
“Influencers feel like they're losing part of the payment to fluctuating rates or high transfer fees,” says Harri Brown at Antler Social.
“It's not just about making payments anymore, but ensuring we are on the right side of evolving laws in each country”
Performance-based models gain traction
The research indicates a move away from flat-fee payments toward compensation tied to measurable outcomes like sales conversions and engagement metrics. This shift reflects broader changes in how brands measure return on investment in digital marketing.
SoSquared, an influencer marketing agency, implements hybrid payment models that combine upfront fees with performance incentives. “We use a hybrid compensation model, mixing flat fees with performance-based incentives,” says Sam Royle, an executive at the firm.
Wild, a social media marketing agency, is developing systems to track sales performance.
“Right now, we mostly follow commission-based or flat-fee models, but we are actively looking to build more hybrid systems. Performance-based structures allow us to push toward real results like sales, rather than just impressions,” says Laura Donadio at Wild.
“We've noticed that influencers are much more likely to prioritise a collaboration with us when they know they'll get paid early”
Payment delays remain a significant barrier to growth. NewGen, an influencer marketing agency, reports that client-side budget release delays often cause payment processing to extend beyond 60 days.
According to Deloitte's Digital Platform Economy Payments report, payment terms for major brand partnerships can stretch to 120 days.
These delays affect retention rates in the sector. Creator feedback platform F**k You Pay Me reports that payment delays are a primary reason creators abandon certain platforms or brand partnerships.
Pepper Agency has made rapid payments a priority to attract talent. “We've noticed that influencers are much more likely to prioritise a collaboration with us when they know they'll get paid early,” says Joe Friend at Pepper Agency. The firm processes approximately 80% of payments ahead of schedule through a bi-weekly payroll system.
The integration of automated payment systems could reduce these delays. “As this industry grows exponentially, we will push toward more streamlined, automated payment systems – but also better compliance tools – so agencies and brands waste less time worrying about compliance risks,” says Thomas Walters at Billion Dollar Boy, an influencer marketing agency.
Creator pricing data from F**k You Pay Me indicates that since 2020, the monetary value of influencer partnerships has increased by 81%, making payment efficiency increasingly critical for scaling operations.
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