How to Measure the ROI of an Influencer Marketing Campaign?
Over the last few years, influencer marketing has staked a claim in the digital marketing space. In fact, Business 2 Community estimates that it can increase a brand's sales by as much as 300 percent. But like any other type of campaign, the ROI needs to be measured.
According to the 2021 State of Influencer Marketing Benchmark Report In the coming year, the Influencer Marketing market is expected to grow by about $13.8 billion,
In this post, I am going to tell you how to measure the ROI of an influencer marketing campaign. The first thing you have to do is choose some metrics to assess the results of your campaign.
What is Influencer Marketing?
Influencer marketing is a type of paid promotion that centers on online celebrities endorsing goods and services on their social media pages. Micro (1k–100k followers), macro (100k–500k followers), and mega influencers (500k–1mln+ followers) are the three main categories of influencers.
It's a wise investment, too. 89% of marketers feel the ROI on influencer marketing is comparable to or better than that of other marketing channels, according to Mediakix study.
It is truly one of a kind; no targeted advertisement will ever be able to replicate the level of affection and trust that influencers can develop with their audiences. Influencer marketing hit a wall around 2018 as a result of a rise in fake followers, a decline in consumer interest, and inefficient ROI tracking when influencer campaigns were more concerned with brand awareness or brand loyalty than with driving direct sales.
How to Create an Influencer Marketing Campaign?
Set your campaign's objective.
You won't be able to derive reliable results on the success of your influencer campaign without a clear KPI in mind, such as sales growth, loyalty program memberships, the number of trial accounts, or simply clicks and impressions.
Here is a list of potential KPIs you could monitor:
Engagement (views and clicks) and Impressions
Shares and Likes
1.Look for substitutes
List the alternative methods you could use to achieve your campaign's objectives besides influencer marketing, and estimate how much it would cost (reverse ROI). At this point, you might not even need influencers.
2.Create a budget
A permanent discount for affiliates can be added to your influencer campaign in addition to the standard commission based on sales volume or other metrics, making it more like a sophisticated partnership program. Also keep in mind that the season can have a big impact on final influencer costs, which rise around the holidays. The result is that sponsored content dominates social media feeds, which could have a negative impact on ROI.
3. Choose influencers
Choose your influencers wisely and remember the following points:
Have a high ratio of engagement (check if their comments are not just bot comments).
Have enough clout to even consider investing in them (a small follower count is fine as long as it is still possible to achieve your goals with that reach and with the related costs).
Use bots or fake followers sparingly, if at all possible (there are tools that can determine how genuine your influencers' audiences and engagement are).
A 1/1 ratio of sponsored to unsponsored posts is perfectly healthy; avoid having a 9/1 ratio.
4.Explain your requirements
This is the phase in which you contact potential influencers and explain your goals, your offer, and how your service or product can be integrated into the influencer's online persona.
5.Result in comparison
If the influencer marketing results are inadequate to those of other channels, then perhaps this is not the best channel for you. Examine the points for consideration, looking for any potential trouble spots and, if possible, optimizing. If you continue to see round zeros, you should probably try another option.
It all comes down to strategizing, understanding potential costs, and gauging the success of your campaign. If one of those elements is lacking, influencer marketing problems frequently result.
Influencer Marketing Facts & Statistics
1. 67% of Marketers who use influencers track the results of their campaigns.
2. Budgets for influencer marketing typically range from $1,000 to $10,000 annually.
3. Over 50% of advertising budgets are spent on social media influencers by 17% of brands.
4. According to 89% of marketers, social media influencer marketing has a similar ROI to other marketing channels.
5. For 2021, 62% of marketing experts increased their influencer marketing budgets.
6. One of the top YouTuber influencers, Daniel Middleton has earned over $16.5 million in total.
7. Influencers prefer PayPal payments 42% of the time.
8. In various campaigns, 56% of brands decide to stick with the same influencers.
9. According to trends for 2021, the influencer marketing sector would generate $13.8 billion in revenue.
10. Only 32.4% of influencers receive cash compensation for their efforts.
11. 67% of brands use Instagram for their marketing campaigns, according to the most recent influencer marketing statistics.
How can Influencer Marketing ROI be Measured?
There are a few things you can do to measure the ROI of an influencer marketing campaign:
Measure your KPIs:
To assess the effectiveness of your influencer marketing strategy. Tracking your KPIs before and after the campaign and comparing the results will allow you to do this. Following is a list of typical KPIs in case you are unsure of what they are:
What is your goal?
How will you measure success?
When do you want to accomplish this?
Once you've got a clear grasp of the problem at hand, it's time to set goals. Goals should be specific and measurable, and they should apply directly to your business.
It's important that the above questions are answered well before starting any sort of campaign; otherwise, there's no way for anyone else (including yourself) to know if their work has paid off.
For example, We are launching an influencer marketing campaign with fitness influencers because our goal is to get more people into my gym after signing up for a year-long membership instead of just trying out classes or going solo once or twice during Black Friday deals like last year...we would use KPIs such as social media reach/engagement rates on posts shared by those influencers' communities + number of new signups over the next few months compared against data from previous years' Black Fridays (when we didn't do anything special).
Measuring engagement: The main goal of influencer marketing is creating awareness, so if someone sees one of your ads through an influencer and clicks on it, that's great! But how many of those people actually engage with the content?
This will help determine whether or not you should continue using this type of advertising. If people are clicking but not engaging (reading blog posts or following links), then maybe it's time for a different strategy in order to increase engagement rates.
Measure conversions: Conversions or sales are the most popular metrics brands use to gauge the effectiveness of an influencer marketing campaign, according to the Influencer Marketing Hub 2021 poll. You should also track how many people clicked on links provided by your partners and ended up purchasing something from you—this way, when reviewing ad reports at the end of each month or quarter, there will be data available about how much revenue was generated from this source alone.
The number of subscribers or fans on social media: This could be the quantity of new Facebook likes, YouTube subscribers, email newsletter subscribers, or Instagram followers. Using a CRM that tracks lead origination will allow you to identify the traffic source that brought the visitor to your website.
Quantity of backlinks: Backlinks can result in better SEO and content reach if you're trying to increase the functionality and ranking of your website. These are typically developed through sponsored or guest posting on other websites. Analyze the number of backlinks your website had before the marketing campaign, then contrast it with the number after the campaign has ended.
How to Analyze Campaign Performance?
Now that you have all the data and stats, it's time to analyze it. This will help you determine how well your influencer marketing campaign performed and identify areas where you can improve next time.
On the other hand, according to 2020 data from Influencer Marketing Hub, you may anticipate making $5.78 in earned media value for every dollar invested in influencer marketing.
There are the key aspects of analyzing your campaign performance:
Campaign value – this is calculated by multiplying the number of followers with an average CPM (cost per thousand impressions). For example, if an influencer has 10k followers and charges $10 CPM, then their monthly fee would be $100k/month or $1 million/year!
ROI – This is calculated by dividing total revenue by total campaign cost. Total revenue equals all money spent on running the campaign while total cost includes any fees paid to agencies as well as any additional costs like shipping fees or color printing charges etc.; note that these costs are usually deducted from overall ROI calculations but not always so check first before making such assumptions!
The following is the ROI calculation formula:
Total revenue – Total cost = ROI
CPA – This stands for cost per action and it’s the amount spent on running a campaign divided by the number of sales that resulted from that campaign; note that CPA is used instead of ROI when measuring results from affiliate marketing.
CPL – this means cost per lead and it’s calculated by dividing total cost by total leads generated; note that these leads need to be qualified for conversion otherwise you won’t get accurate results!
Interesting Facts about Influencer Campaign
Currently, Kylie Cosmetics is Instagram's top beauty brand.
According to Statista Report, the company with the most followers is Kylie Cosmetics. This beauty brand had 25.37 million followers as of June 2021. The second-place finisher is Anastasia Beverly Hills, with 20.1 million followers.
2. 90% of B2B marketers combine social and influencer marketing, according to media influence statistics.
Influencer marketing is frequently used by B2B marketers in conjunction with content marketing (83%), blogging (83%), PR (56%), and SEO (50%). Similarly to this, influencers assist marketers in producing podcasts (48%), recorded and live videos (67% and 48%, respectively), and webinars (64%).
3. On YouTube, 41% of Gen Y and 53% of Gen Z men follow influencers.
Men are typically bigger fans of YouTube influencers than women are. At 43% and 40%, respectively, Gen Z and millennial women prefer to use Instagram to follow influencers.
4. The richest TikToker right now is Charli D'Amelio.
Despite having only been on TikTok for three years (in 2019), the teen is currently thought to be worth $8 million.
Currently, Charli D'Amelio has 5.3 million Twitter followers, 29.1 million Instagram followers, 9.35 million YouTube subscribers, and 110.6 million TikTok followers.
5. One of the top influencer marketing firms in the UK is Kairos Media.
According to UK influencer marketing statistics, Kairos Media is a prestigious agency that takes pride in being entirely data-driven.
The business provides creative reviews, KPI alignment, strategy selection, campaign execution, and reporting, among other services.
6. More than 40% of Brazilians made a purchase in 2021 as a result of influencer marketing.
According to statistics on influencers from 2021, a similar situation existed in China, where about 35% of consumers based their decisions on celebrity and influencer marketing.
7. India came in third on the list, ahead of South Korea, Mexico, and Italy.
Influencers are employed as brand consultants by 35% of B2B marketers.
Furthermore, according to statistics on influencer marketing, 58% of B2B marketers use influencers as brand ambassadors, 82% of B2B marketers use influencers to promote their brand content, and 87% of B2B marketers collaborate with influencers on content.
8. To build brand awareness, 84% of B2B marketers work with influencers.
Working with influencers helped 64% of B2B marketers build their brand's credibility, and 34% saw an increase in sales as a result of the collaboration.
9. Influencer marketing, according to 94% of marketing professionals, boosts sales.
It's understandable that businesses are looking for more strategies to boost influencer sales when platforms like TikTok can cause products to sell out in a matter of seconds.
10. 84% of Instagram influencers who create sponsored posts are women.
The majority of social influencers on Instagram who produce advertisements are women. In addition, 31% of social media influencers who publish these kinds of posts are between the ages of 18 and 24.
Influencer marketing is a great way to drive engagement and increase brand awareness. But before you embark on your own influencer marketing campaign, it's important to understand how much it will cost you in terms of time and money. This article has given you some tips on how to measure the ROI of an influencer campaign so that you can decide if this strategy is right for your business needs!
1. Influencer marketing: What is it?
Ans. Influencer marketing is a synthesis of conventional and contemporary marketing strategies. It's a celebrity endorsement idea adapted to work with the current content-based marketing model.
Influencers don't always have to be well-known figures. Regardless of the industry, anyone with a large social media following can establish themselves as an influencer.
2. What is the price of influencer marketing?
Ans. The cost of engaging an influencer will vary depending on their choice of social media platform, engagement level, the number of posts, ad placement, and whether they choose a direct partnership or work with an agency.
For instance, nano-influencers (1,000–10,000 followers) make $10–$100 for each Instagram post, while mega-influencers (more than 1 million followers) can earn more than 10,000.
3. What advantages does influencer marketing offer?
Ans. Influencer marketing can help brands in a variety of ways, from raising their profile to broadening their audience reach.
Brands frequently use influencers with a large following to promote their products because consumers place a high value on authenticity and credibility.