From the Racked article - https://www.vox.com/2016/4/27/11502276/teatox-instagram
While some celebrities are eager to promote teatoxes on Instagram, Neuman says others only post as part of a package deal that also involves more traditional product placement. In the case of Nicki Minaj's "Anaconda," Britney Spears and Iggy Azalea's "Pretty Girls," and Big Sean's "I Don't Fuck With You," Instagram posts were added as a contractual requirement when MateFit paid for its tea to be featured in the music videos.
"Studios aren't funding videos the way they used to. Artists are now funding them, so at the end of the day, they need the money," says Neuman. "Product placement makes or breaks it, so they take the Instagram deal."
Neuman says plenty of talent reps for big stars have turned him down, and that Minaj insisted on tasting the tea before agreeing to any sort of deal. But Britton points out that a partnership with a teatox brand is hard to say no to because posting is "literally no work."
"These deals are like one-night stands," Britton says. "They aren't like the endorsements Katy Perry does with Popchips — they are transactional. Celebrities take them because it's not like doing a long shoot for a magazine, or having to travel for a gig. It requires, like, 10 seconds."
Some agreements even allow the influencer to delete the post a few days later — it's called a "deletion clause" — which is why you won't find live product posts on the Instagram accounts of Kim Kardashian or Scott Disick. You can still findthese posts via Google Image, though.
Mike Heller, Talent Resources' CEO, says the pay scale for teatox Instagram posts he places starts at $3,000 and goes all the way up to $250,000. The amount you get paid depends on your follower count, and while Heller wouldn't confirm which celebrities are getting paid a quarter of a million dollars per post, it's fair to assume someone like Kylie Jenner, with her 59 million followers, is among the highest-paid celebrity endorsers.
Yes, it seems inconceivable that teatox brands are able to shell out this kind of cash to influencers. Heller notes, though, that the costs these companies incur are very low. Bundles of loose tea leaves and dried bark are cheap to buy, especially in bulk, and these brands turn around and sell their products at ten times the cost. With such high margins, Heller explains, "they can spend all of their money using digital and social media to amplify and get their message out there." Neuman adds that "these are small businesses that have a lot of flexibility; they don't have the corporate structures, so there's more opportunity to have target investments." Richards says Skinny Teatox only has a team of "three to four," which means very little overhead.
And pay-for-play does help these businesses. According to data provided to Racked by Dash Hudson, a FitTea Instagram post from Kylie Jenner on March 28th performed worse than average, with an engagement rate (likes and comments in relation to follower count) of 1.3 percent as opposed to her normal 2 percent. Still, the photo exposed the brand to her 59 million followers and gained FitTea nearly 3,000 new followers of its own. Plus, Neuman says his team's research has found that teatox companies see an unusually high number of repeat buyers, so every potential new customer is a potential longtime customer.
I find this very interesting. I follow a few celebrities for marketing reasons only and it has to be said, the Kardashian/Jenners still do a lot of paid promotional posts for e-commerce brands so clearly these e-com stores are seeing a return?
What do you guys think? Is it worth investing in high level celebrities or influencers if you are generating a few million quid a year?