It is without a doubt influencer marketing has been increasing year on year, but it has always been in question as to whether the campaigns are an effective return on investment.
According to the 2019 State of Influencer Marketing Report, 78.6% of surveyed brands had a dedicated budget to Influencer Marketing and 62.7% have found it effective in building unique audience relationships.
Whilst the statistics support the success of influencer marketing, making it a habit to calculate the return on investment can do wonders to your budget to ensure the success of your campaigns.
Is there a formula to calculate the ROI for influencer marketing campaigns?
It’s important to make informed decisions when diving into any influencer marketing campaign, and that includes determining your goals at the beginning and doing your homework on insights at the end of the campaign.
Whilst there may not be a simple nor a definitive formula in an industry that is constantly changing, there certainly are measures to be taken that forms part of your decision making in getting the best returns.
Here is a step by step guide that can help you.
Do you know what your end goal for the campaign is?
It’s crucial to set your sights on the prize right at the beginning because that determines the direction of the campaign and to accurately track the return on investment (ROI).
Here are some common influencer marketing goals for marketers:
- Increase brand awareness
- Reach new/ target audience
- Improve brand advocacy
- Increase sales
- Manage brand reputation
Define metrics to measure campaign performance
Don’t be afraid to be specific here and set a timeline which can be a useful tool for evaluating campaigns. Most of all, be realistic and set yourself achievable targets.
According to the Lingia study:
- Engagement is the most used metric in influencer marketing programs (cited by 90%)
- Clicks (59%)
- Impressions (55%)
- Conversions (54%)
- Other measures such as Reach and Product Sales are also forms of measures
Develop goals and performance metrics for individual influencers
It’s important to know what the purpose of the campaign is, so you are not running blind. This then creates the strategies to better understand the market you are targeting. Once you understand who your audience is, it then allows you to have a more targeted approach to measure each individual influencer and engage the most suited influencer for the campaign.
Whether the purpose is to increase engagement or to sell a product, have a set of performance metrics to look at will certainly help with your search and these metrics may include:
- Total impressions
- No. of clicks to landing page/ website
- Average engagement rate
- Rate of conversion to customers
- Amount of user-generated content created
Use an influencer tracking platform
A little help goes a long way and can save a lot of time because social media marketing is a fast paced industry and you have to keep up. So why not consider the help that is already out there created by experts?
Knowing your goals can also help you save time and money in finding the right platforms to use.
Below are platforms that have different strengths in influencer tracking and campaign management:
- Grin – has most comprehensive list of KPIs to measure your campaign performance.
- NeoReach – this platform has a tracking and reporting feature that allows for you to monitor performance in real time.
- TapInfluencer – this is a great platform to analyse ROI.
Measure the influencers and know who is the most suitable for your campaign
This step can help provide a more targeted approach in engaging the right influencers for your campaigns. You can start with shorter campaigns to compare the influencers within the group for a long term vision:
- Create unique URLs for each influencer to track the direct traffic coming from the influencer’s blog or social media posts.
- Have unique discount codes for each influencer.
“Assess the results – it’s better to run multiple short influencer campaigns to filter out low performers.”Shane Barker, Digital Marketing Consultant
With all the information gathered, you can filter out poor performance and focus and retain relationships with top performing influencers.
Hot tip, if you have an eye for being able to see potential and build those relationships early on, it can do wonders for your company long term.