Over the past decade, influencer marketing has grown into an estimated 8 billion dollar industry. Brands of all sizes are now turning to this innovative new marketing method to promote their products, increase their visibility, and ultimately drive their sales. But as the investment in influencer marketing continues to increase, so too does the demand for budget justification from stakeholders.
So how can companies know for sure that the results from their investment in an influencer campaign were actually worth their total marketing costs? Well, along with trying to find influencers, this is actually one of the biggest challenges many marketers have with digital marketing. So, with that in mind, here’s how you can accurately work out the returns on your influencer marketing investment.
Determine End Goals
Before you launch a marketing campaign with an influencer, the most important first step is to set clear goals and objectives for your efforts. Not only is establishing what you hope to accomplish essential for defining how success will be measured, but determining end goals also helps you decide which influencer would be most suitable to work with. This can be based on things like the influencer’s content style, engagement history, and social media followers, or maybe they just make sense organically for your brand.
Identify Campaign Metrics to Capture Influencer Marketing ROI
Once the marketing goals and campaign objectives have been set, you then need to identify metrics to accurately quantify its success. No matter which unit of measurement is chosen and agreed upon by the marketing team, it needs to be specific for each campaign on a product by product basis.
This is because once the goals and metrics have been ascertained, it’s actually not as impossible as you may think to accurately capture achievements and measure the costs of each. You just need to ensure there is a tailored approach to any influencer marketing program in order to accurately measure its value, truly understand its impact, and assess its actual longevity.
Common Goal Metrics
For each of the common goals in influencer campaigns, there are some metrics you can use to measure your progress.
The most effective measurements for the influencer’s impact on your brand are website traffic, engagement, and impressions for a few days after publishing content on your brand
Also known as brand lift, influencers can take your brand awareness further by dramatically boosting your social reach with a measurable increase in likes, followers, or subscribers. You can even take this further by giving value to shares, mentions, hashtags, and even the number of direct messages.
In order to quantifiably gauge the success of a lead generation goal, you can set up something to measure conversions like an opt-in survey or newsletter.
Obviously the most important metric of any marketing campaign, there are a number of ways you can track how effectively an influencer was able to drive up sales. Depending on the campaign features, you easily can track sales with an affiliate link, a unique landing page, or exclusive discount codes for their followers.
Remember that to give your influencer marketing the best chance of success, be as specific as you can with your goals and how you measure your metrics. Because the more detailed and precise you are, the easier and more accurately you’ll be able to track the ROI of your campaign as a whole.
The Formula For Direct ROI
Once you’ve set up your goals, decided on the most appropriate metrics, and completed the campaign, you can use the formula below to accurately calculate the actual value of your influencer marketing.
ROI (Return on Investment) = (Profit Return / Total Investment Amount) x 100
Basically, you take your Profit Return, which is the audience engagement metric from above, divide it by the Total Investment Amount, which is how much the influencer cost, and then multiply the total by 100. The formula provides you with your return on investment reflected as a percentage of each dollar invested which yielded a profit.
Maximize Influencer Value
Influencers are often considered to be real-world authority figures within the digital space, any brand they promote can gain instant validation, importance, and maybe even a little of that cool factor. But what really makes good influencer marketing campaigns so successful is their versatility. Because not only should a campaign generate a suitable ROI for the brand, but it should also be created to suit the needs of your target market, and even increase the credibility of the influencer as well.
Brand awareness goals
While some digital marketers are only interested in direct sales figures, there are actually many other ways that influencer collaborations can be beneficial. Influencer campaigns can also be designed and created for a variety of project objectives. You can get creative with the deal and do promotions such as running a giveaway to further boost your brand’s reach with their audience.
In fact, one of the main reasons for the rapid rise and appeal of influencer marketing was actually attributed to the goal of increased brand awareness and online authenticity. Measuring brand awareness whether by social followers or web traffic is actually a fairly manageable and easy metric for gauging the success of a campaign.
The Last Word
Influencer marketing is still a comparatively new marketing sector, so accurate measurement of ROI figures is yet to be clearly defined across the board. But if your brand needs to justify spending on your influencer marketing campaign, you can use the information above to measure success. This is especially important if you’re considering increasing your campaign budget for influencer marketing anytime soon.