How To Successfully Measure Influencer Marketing ROIby: Dustin Hawley | Tuesday June 18, 2019
Influencer marketing is a force to be reckoned with. So much so that almost 80% of brands say they dedicated budget this year to influencer marketing, according to a 2019 Influencer Marketing Report from Relatable. By 2020, an estimated $8 billion is expected to be spent on Instagram influencer marketing alone. That's big money.
Though these statistics clearly display the growth that has occurred with influencer marketing, they do not necessarily indicate whether or not it’s being done well. In order to determine the success of your influencer program, you must accurately track campaign performance and ensure the return is proportionate to the investment.
Influencer marketing can be relatively inexpensive – some influencers will promote your brand in exchange for products – but regardless, it is still an investment of both time and money. And like any other marketing expense, it's imperative to track your return on that investment. This can be easier said than done, though. Depending on both the goals of a single campaign or the long term goals of your brand, influencer campaigns may not always necessarily lead to a huge boost in sales right from the get-go. But that doesn't mean they aren't providing tremendous value to your brand. For this reason, you may need to find other ways to measure ROI.
Here's how to successfully measure the ROI of your Influencer Marketing efforts.
Measuring the ROI on influencer marketing campaign largely dependent upon your objective
When analyzing the effectiveness of their advertising efforts, the first place many marketers look is at sales. However, this is not the only metric that defines the success of influencer campaigns. There are many other benefits to influencer collaborations that can ultimately drive sales, both directly and indirectly. For example, a brand looking to enter a new market, visibility can become more important than sales tied specifically to a single campaign. On the flip side, a brand looking to reshape its image in the market may look to measure success by increasing positive sentiment. Other brands may simply be looking for content to feed their social campaigns, blogs, pages, etc.
It doesn't matter if you’re promoting a new brand or introducing a new product. Sometimes, your primary goal is to gain visibility. Brands who focus on growth-oriented campaigns should base their ROI on the number of new potential customers they reached through the campaign. With influencer marketing, this usually means the number of views and engagements the influencer's content received.
To determine true ROI, it’s important to ensure your impressions are targeted in your objective. One of the best attributes of Influencer marketing is that it allows you to reach the consumers most likely to shop your product or service by selecting the ideal influencer(s) who closely align with your target audience.
Cost-per-engagement (CPE), is a common term in the influencer marketing world, and it's measured in terms of dollars spent per “like,” comment, or interaction such as a video view or click-through. It's a valuable metric that brands can use to measure the long-term ROI, because engagement is a great indicator of how consumers feel about not only the product but the brand.
The engagement metric goes beyond traditional measurements of ROI, which typically only track immediate sales earned from a campaign in order to measure the likelihood that viewers will become loyal customers.
CPE has become a key measure of success for influencer campaigns because it takes into consideration the value of a consumer’s long-term interest in the brand. It's not limited to the consumer's interest in an immediate sale. Engagements can be classified as clicks to the website, likes, comments, video views, the number of sales, retweets on Twitter, Facebook shares, and other social interactions.
One of the more overlooked benefits of influencer marketing is content. Negotiating usage rights to an influencer’s content is often far less expensive than coordinating a photo shoot and other resources to produce it for yourself.
You also get the added benefit of a third-party endorsement, which should be considered when looking at your investment in totality. This makes content creation a powerful return on investment, both for saving money on in-house content creation and for the sales potential and reach generated by the influencer's content.
Let's be honest, when it comes down ROI, the metric most relevant to an organization is revenue. How do you know what your influencer marketing campaign has returned to your business's bottom line? How can you measure your revenue earned versus dollars spent?
3 Ways To Measure Monetary ROI from Influencer Campaigns
Here are three ways to measure your return on monetary investment.
Google Analytics is one of the most powerful tools for tracking online sales in the world today. With the ability to set up an “Event” goal, you can see which of your online customers visited your e-commerce site from an influencer’s social channel. This gives you a reliable and in-depth assessment of ROI on your sales.
Creating custom promo codes allows you to track the impact of your influencer campaign beyond immediate sales. Here's how...
As mentioned earlier in this article, not all consumers are going to make a purchase immediately after seeing an influencer’s post, regardless of if the content ultimately inspires their buying decision. In light of this fact, affiliate links only reveal part of your ROI. This is where promo codes can help you track “down the line” purchases that were catalyzed by influencer marketing. Most e-commerce sites like Shopify allow you to generate promo codes easily that you can provide to your influencers to incorporate into their content and social posts in order to track these down the line conversions.
Isolated marketing is a great way to measure an influencer’s impact on sales, no matter when or where the purchase is made or takes place. To employ this method, you select a special “test” product that, for a specific period of time, you promote only by means of influencer marketing. Isolating your marketing efforts gives you the ability to track sales throughout the entire sales funnel, including in-store purchases. This test also gives you a more detailed and complete picture of your consumers’ buying behavior, from which you can better assess the total sales you’re likely to generate from influencer marketing in future campaigns, and more accurately define your marketing projections as a whole.
The examples of ROI that were outlined above only demonstrate some of the ways to measure influencer marketing’s impact, but they are by no means the end-all-be-all as it pertains to measuring influencer ROI! If you include the intangible benefits of a third-party endorsement and an SEO boost from the number of organic conversations taking place around your brand, it's not hard to fathom why influencer campaigns are becoming so prevalent. There are many different ways to measure the success of influencer marketing, but the ability to measure it effectively will always be a focus of marketers and brands alike.
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