There are actually multiple levels of (Instagram) influencing. On the one end you have your mega influencers like Kylie Jenner. On the other there, are so called nano influencers, with as few as a thousand followers (and up to 10k). Usually, the fewer followers you have, the more engagement you can get from your followers and that's something companies will pay for. Also, most nano influencers are just doing it as a side gig for some free stuff, so it might actually be kind of economical as a marketing channel for many consumer companies (YMMV of course).