Influencer Marketing and UGC: Choosing Creators, Paying Them and Measuring Sales | Free Digital Marketing Course: From Beginner to Expert

What you'll learn

How to choose creators by their real audience and fit, not by follower count.
How to calculate engagement rate and spot inflated accounts.
How to pay creators and write a brief that gives them creative freedom.
What the FTC Endorsement Guides require from you and from the creator.
How to measure sales with unique codes and UTM links, and use UGC in your ads.

📥 Practice this lesson

Add each creator as a row (fee as spend, orders as conversions) to compare cost per order and ROAS with your ads.

digital-marketing-template.xlsx · Campaign Metrics sheet

People trust people more than brands. That's why a recommendation from someone they follow can sell more than an ad. But influencer marketing is also where a lot of money gets wasted: accounts with bought followers, collaborations with no goal and campaigns nobody measures. In this lesson you'll learn to do it with judgment, using Aurora Coffee's online store from lesson 14 as the example.

Types of creators

Tier	Followers (common industry convention)	Characteristics
Nano	1,000 to 10,000	Close, loyal audience; often accept free product or small fees
Micro	10,000 to 100,000	Niche specialists; a good balance of reach, engagement and cost
Macro	100,000 to 1 million	Big reach, lower relative engagement, high fees
Mega and celebrities	More than 1 million	Mass awareness; rarely profitable for a small business

For most small and midsize businesses, several nano and micro creators in their niche outperform one big account: more trust, a better cost per sale and less risk if one collaboration flops.

How to choose: real audience and fit

Engagement rate

Engagement rate = average interactions per post (likes + comments) ÷ followers

Compare two accounts Aurora is considering:

Engagement rate (scale: 0% to 5%)

Account A4%

Account B1%

Account A: 25,000 followers and 1,000 average interactions. Account B: 200,000 followers and 2,000 average interactions.

B has eight times the followers but only twice the interactions. Normal rates vary by platform and account size (smaller accounts usually have higher rates), so compare creators of similar size on the same platform.

Red flags

Lots of followers and few comments, or generic comments ("🔥🔥," "nice pic") from accounts with no photo.

Read the comments: real audiences ask questions and mention their own experience.

Sudden follower spikes with no viral post to explain them.

Check the growth history with a social analytics tool.

An audience mostly outside your market when you only ship in the U.S. (or serve one city).

Ask for screenshots of their audience insights: country, city, age.

One paid post after another, every day.

Prefer creators whose sponsored content is occasional: their audience still believes them.

Brand fit

For Aurora, a Denver home-cooking and lifestyle creator with 18,000 followers can sell more coffee than a comedian with 300,000. Ask yourself: Does their audience resemble your buyer persona (lesson 2)? Would they use your product even if you didn't pay them? Do their values fit your brand?

1. An account has 50,000 followers and averages 750 interactions per post. What's its engagement rate?

1.5%
15%
0.15%

750 ÷ 50,000 = 0.015 = 1.5%.

How to pay creators

Model	How it works	When it fits
Gifting (product seeding)	Free product in exchange for honest content	Nano creators and appealing products; posting isn't guaranteed
Flat fee	A set amount per post or package of posts	When you need guaranteed content on specific dates
Affiliate commission	A percentage of each sale made with their code or link	Lowers your risk; bigger creators rarely accept commission only
Hybrid	A lower flat fee plus commission	Aligns incentives: the creator earns more if they sell more

The brief and the rules

A good brief gives creative freedom within clear limits. It should include: the campaign goal, the key message (just one), what to show and what to avoid, formats and number of posts, dates, the discount code and UTM link (lesson 8), content usage rights, the disclosure requirements and payment terms.

Let the creator speak in their own style: their audience follows them for how they communicate. A rigid script written by the brand sounds like an ad and performs worse.

FTC disclosure rules

The FTC's Endorsement Guides, updated in June 2023, require disclosing any "material connection" between a creator and a brand that the audience wouldn't expect: payment, free products, a commission, a family or employment relationship. Both the brand and the creator can be held responsible. Use this checklist for every collaboration:

The disclosure uses plain words like "Ad," "#ad," "Sponsored" or "Paid partnership with Aurora Coffee."
It's hard to miss: on the image or video itself, said out loud in videos, and at the start of the caption, not buried among hashtags or behind "more."
The platform's paid-partnership label is used, but not relied on as the only disclosure (the FTC says it may not be enough on its own).
A discount code alone isn't treated as a disclosure: it doesn't tell people there's a paid relationship.
Every post in a series carries its own disclosure, gifted posts included.
The creator only makes claims they believe and that we can back up; we review posts and fix problems quickly.

Fake influence is also illegal

Under the FTC's consumer reviews and testimonials rule (in effect since October 21, 2024), buying fake followers or views that you know or should know are fake, to misrepresent your influence, is prohibited. Neither the brand nor the creator should buy engagement, and brands should not ask creators to hide the partnership "so it feels natural."

2. What matters most in a creator brief?

A word-for-word script the creator must read.
A clear goal and key message, freedom to tell it their way, and the disclosure and tracking rules.
Asking them not to mention it's an ad so it feels natural.

The creator knows their audience. Your job is to set a clear goal, what not to say and how it will be measured. Hiding the ad violates the FTC Endorsement Guides.

Measuring the result in sales

Give each creator a unique discount code and a UTM link, so every sale has a name. Here's one of Aurora's campaigns:

Creator fee:                            $400
Orders with the code AURORA15:           40
Cost per order: $400 ÷ 40             = $10.00   (ads CAC: $20, lesson 14)

Margin per order: $22.75 (lesson 14) − $7.50 discount (15% of $50)
                                       = $15.25  (a slightly conservative figure)
Total margin: 40 × $15.25              = $610
Campaign result: $610 − $400           = +$210

On top of that, Aurora gains 40 new customers who can reorder without a discount. Not every sale will use the code (some people buy later without it), so also watch total sales and branded searches during those days.

UGC: user-generated content for your ads

User-generated content (UGC) means photos, videos and reviews from customers or creators that show your product naturally. On social media it often outperforms polished studio ads, because it looks like everything else people watch.

From customers: reshare posts where they tag you, always with their explicit permission.
From UGC creators: people you pay to produce videos that you run in your ads, even if they never post them on their own account.
Creator ads: Meta's partnership ads and TikTok's Spark Ads let you promote a creator's post from their account with your budget (lesson 10).

Put usage rights in writing: where, for how long and in which formats you can use the content. If a creator appears in your ads, the disclosure obligations still apply.

3. How do you know how many sales each creator generated?

By asking them how many people messaged them.
By the number of likes on their post.
With a unique discount code and a UTM link for each one, plus tracking total sales during those dates.

Unique codes and links attribute sales to each creator. Likes measure attention, not sales.

4. A creator received free coffee from Aurora and posts a glowing review with the code AURORA15 but no other mention of the relationship. Is that enough under FTC guidance?

Yes, because they weren't paid in cash.
Yes, because the discount code shows it's a promotion.
No: free product is a material connection, and a code alone doesn't disclose it. They need a clear "#ad" or "Sponsored" disclosure.

Gifts count as material connections, and the FTC has said a unique discount code doesn't by itself tell viewers there's a relationship with the brand.

Practice exercise: compare two creators

Aurora tested two creators with a 15% code (margin per order after the discount: $15.25):

Creator A: 40,000 followers, 1,600 average interactions, charged $600, generated 30 orders.
Creator B: 8,000 followers, 560 average interactions, charged $150, generated 18 orders.

Calculate the engagement rate, cost per order and result for each.
Who would you work with again, and what would you change?

See solution

                     A                        B
Engagement rate      1,600 ÷ 40,000 = 4%      560 ÷ 8,000 = 7%
Cost per order       $600 ÷ 30 = $20.00       $150 ÷ 18 = $8.33
Margin generated     30 × $15.25 = $457.50    18 × $15.25 = $274.50
Result               $457.50 − $600 = −$142.50   $274.50 − $150 = +$124.50

B, with one-fifth of the followers, was profitable and A wasn't (on direct sales). Work with B again and look for more creators like B. With A, try a hybrid model (a lower fee plus commission) or use their video as UGC in ads, where its quality may pay off. Remember that one campaign is limited evidence: repeat before drawing final conclusions.

Summary

Several well-matched nano and micro creators usually outperform one big account.
Choose by engagement rate, real audience (country, age) and brand fit; avoid inflated accounts.
Gifting, flat fee, commission or hybrid: the hybrid model aligns incentives.
Follow the FTC Endorsement Guides: clear "#ad" or "Sponsored" disclosures in every post, gifts included.
Measure with unique codes and UTM links and judge results by margin, not likes; secure usage rights for UGC.

Next lesson: B2B Marketing and LinkedIn: Generating Leads to Sell to Businesses. In the final lesson you'll see how marketing changes when you sell to other companies.