Influencer marketing is in the new center of digital marketing. It helps smaller brands to scale bigger by targeting possible buyers rather than spending huge money on TV commercials for large consumers. With the help of influencer marketing, small businesses can expand their sales and large businesses can reach out to broader audiences. The high ROI of influencer marketing is one of its great advantages compared to the average display ad. Also, influencer marketing ROI has proven to be able to blow online advertising out of the water.
Influencer marketing statistics show that 89% of marketers already find influencer marketing more profitable than other marketing ties. Successful influencer marketing is aimed to increase brand awareness, create a conversion, generate positive ROI and reach your target audience.
What is the ROI of influencer marketing?
So, how the success of influencer marketing can be measured? Influencer marketing provides significant tangible as well as intangible return on investment for brands and is a growing trend for B2B.
Tangible benefits
Here include the total performance of your posts and the audience’s responsiveness to the campaign. It ensures profitable returns for particular amounts invested.
Metrics like engagement, views, impressions, reach, conversion rates, etc. can show how your posts are performing. You can measure all of them with the help of in-app data insights that most social media platform provides. You may ask influencers to provide these insights.
Intangible benefits
Being less contrived than traditional methods is the key reason why influencer marketing works so well. It’s a great ability to grow loyal customers over time, build authenticity and trust, brand awareness, organic conversion, creative content and many more.
Eventually, instead of creating more content, the clever strategy for businesses is to focus on ROI provided by influencer marketing as well as companions like employee advocacy and brand advocacy.
How to measure ROI of influencer marketing?
Engagement, engagement rate, reach, impressions are the most-used metrics to calculate ROI of influencer marketing. However, none of these metrics exactly tell the true ROI.
In order to estimate the true ROI of influencer marketing, brands need to consider pre and post collaboration sales figures, links to the brand’s website, keep track of ongoing campaigns. So read on before getting launched your next influencer marketing campaign.
Here are several factors need to be examined for high ROI generating influencer marketing:
- The relevance of influencers with the campaign
- Partnership experience of influencers
- Demographic features of influencers’ audience
- Using the right platforms for promotions
- Creating organic and engaging contents
- Using project-special hashtags
Set achievable influencer campaign goals
First off, you need to decide what you want to accomplish. Defining the end goals is important for determining how you’re going to measure them. Some of the most common goals for launching influencer campaigns are:
Increase brand awareness. Measuring the number of pieces of content produced and the total amount of impressions are two ways of measuring brand awareness.
Lead generation. Leads may qualify themselves as subscribing to the blog or newsletter.
Generate sales. Affiliate links to the influencers’ posts and discount codes help to record a more precise estimation of ROI.
These are broad goals, however, for running a successful campaign you need to get more specific about your goals and which digital marketing techniques you’re aiming to use. This will also make measuring ROI easier.
Share of Voice
Share of Voice typically shows the percentage share of the brand’s paid advertising in the market. It reveals the performance of campaigns and allows you to benchmark your future marketing campaigns.
Measure the share of voice by dividing a target metric that represents your brand by the total in your industry or market, then multiply that number by 100 to get the percentage of market share for that specific metric.
There are plenty of social media listening and analytics tools that measure your SOV relative to similar businesses. Mentions, hashtags, reach, impressions are metrics used to calculate the share of voice.
Earned Media Value
Earned Media Value refers to the gains from various marketing channels, blog posts, word-of-mouth marketing, influencer marketing, brand mentions.
Although there is no exact formula for measuring EMV, the general formula is a product of impressions, CPM (cost per impression) and other specified metrics say, the share of voice and engagement depending on the project.
One drawback of EMV is that it is a simplistic and unprecise method for calculating the true ROI of influencer marketing. Impression, reach are partial numbers, as they do not exactly tell us who viewed the posts while surfing on the social networks. For comprehensive measurements, marketers need more complex analytics.
Influencer Media Value
Influencer Media Value is a genre of Earned Media Value. It is the equivalent value of the advertised post. Thus, if IMV of a post is $100 it means the post would have $100 value as a sponsored Instagram post.
IMV helps to estimate the worth of influencers before engaging in collaboration. Obviously, profiles with a large audience generate high IMV. It shows the maximum amount which brands can charge for a sponsored post.
At the end of the project, brands need to compare IMV with the previous post’s IMV. A successful influencer campaign should generate higher IMV.
Evaluate the results
Measuring the performance of the overall campaigns is not usually enough. You need to pick a group of influencers to start with and in the beginning track each influencer’s performance.
With the unique discount codes and URLs, you can get the metrics for attributing sales brought in and track direct traffic coming from those influencers’ posts.
Assessing the performance of each influencer will help you to filter out the poorly performing influencers and keep only the top-performing ones.
Repeat the process by running a short term campaign using the new mix on influencers – from your initial list and new ones. To track this ROI keep an eye on likes, shares, daily views, visitors to pages, comments and so on.
It’s risk-free to run several short-term campaigns and keep filtering out low-performing influencers, so when you start a long-term collaboration with a chosen group of influencers, you’ll be setting yourself up for failure.
