Are your influencers, well… influencing?
Measuring the ROI of an influencer marketing campaign has long been a challenge for brands who want a slice of the $16.4 billion industry, but also want to make sure their advertising budgets are delivering results.
At The Influencers Agency, we know a thing or two about the topic (it’s in our name), so we have good and bad news.
The bad news is that there is no “one size fits all” answer when it comes to influencer marketing ROI. Your results will depend on your campaign goals and strategy, so what is a win for you might not be delivering ROI for someone else.
OK, now for the good news.
While there’s no standard formula for influencer ROI, you absolutely can work with influencers in a data-driven way. And in this article, we’ll show you exactly how to do just that.
Alright, we’re going back to basics here. Class is in session (hey you, up the back, pay attention!).
ROI means you’re getting some sort of “win” from your campaign. This doesn’t necessarily mean a sale or waking up to more money in your account (even though these outcomes feel great).
This is an important distinction to make because not all brands are looking for immediate sales. They might be chasing content creation, awareness, or improved credibility. And look, we get it, these aren’t as exciting as money in the bank. But these intangible forms of ROI are crucial for brands looking to establish their footing.
For example, let’s say you’re a new beauty brand trying to make your mark and build some word of mouth buzz. You’re probably more interested in visibility than sales right now because you need to walk before you can run to the bank. 70% of brand managers consider building an audience as being MORE important than sales because ROI can be broad.
So, if ROI is a broad target, the next question is “how do you measure it?”.
To make sure you’re not flailing around and hoping for results (it’s OK, we’ve all been there), here’s how you measure the impact of your influencer marketing efforts with confidence.
A great philosopher that we literally just invented once said “you can’t calculate success until you know what you’re measuring”.
Before figuring out if your influencers are driving results, you’ll need to ask yourself two important questions:
ONE: “What is the specific goal for this influencer marketing campaign?”
TWO: “What is a realistic target in my pursuit of this goal?”
Keep in mind, the answers to these questions will differ from business to business. That means you can’t just Google your competition and steal their goals because these won’t align with your brand. Common influencer marketing metrics include:
For example, are you looking to boost brand awareness? You might track reach, impressions, new followers or video views. Maybe you’re interested in engagement? You might track clicks, comments, likes, shares or website visits Although many brands track engagement as an ROI metric, there are plenty of data points to fill a spreadsheet.
Common influencer marketing metrics include:
The Influencers Agency Tip: It’s tempting to measure every metric under the sun but resist this urge. Metric overwhelm is a real thing and can make it tough to measure the true value of your influencer campaign when you’re clouded by every data point possible. 😵💫
This is where the ‘I’ in ROI comes into play.
You’ll need to figure out what you plan on investing in your campaign before you can start assessing whether you’re enjoying a return. So, once you’ve defined your metrics, you’ll need to factor the cost of your influencer marketing efforts because you’ll never know if you’re enjoying positive ROI without knowing your outgoing costs.
Your budget should include costs like:
As a time and cost-saving tip, using a fixed-rate influencer agency (*cough* we’re Australia’s only flat rate influencer agency *cough*) you’ll know exactly what each campaign is costing you. This approach helps reduce the hassle of tracking spend like product samples, influencer fees, tracking software, and the intangible time it takes to vet influencers and manage your own campaign.
Alright, you’ve got your goals and your budget, now it’s time to understand your returns.
The general formula for ROI looks like this…
ROI = (Revenue - Investment)/Cost x 100
For example, let’s say you generated $10,000 in revenue, but spent $4,000 on your influencers.
Your formula would look like this…
ROI = ($10,000 - $4,000)/$4,000 x 100 = 150.
That’s 150% ROI!
Of course, calculating ROI won’t always be so straightforward. This formula works if you can confidently assign your revenue to a particular influencer campaign. But if you’re also running paid ads, or SEO, or standing on the street corner yelling at passing cars, it’s tough to know *exactly* where your revenue came from.
Does that mean you’re stuck without a way to measure your results?
NO.
Here are a few more ways to track your results and measure the effectiveness of your campaign.
Your influencers will have access to their results whether they’re using Instagram, TikTok, YouTube or another social media platform. It’s best if you track results independently, but it helps to get first-hand analytics from your influencers to track the number of fans reached, page views on your website, clicks to your landing page, and so on. You can take this a step further by reading public comments to see what effect your influencers are having on their followers. If you’re seeing an interest in your brand via the comments section, you can feel confident your influencers are driving interest.
Looking to promote a discount or promotion? Assign different promo codes to track your influencer campaigns. Using this approach, you’ll be able to see which influencers drove the most clicks, the most sales, etc. Make sure you track everything that contributes to a conversion or sale, not just the sale numbers themselves.
Track campaign hashtags to see which influencer is driving the greatest buzz online. This can be a creative approach to a brand awareness campaign where you’d like to get your brand seen online. Remember to distribute your branded hashtags to individual influencers to accurately track the results. This strategy gives influencers something unique to promote and helps quantify their impact on your business.
#winning.
Knowing how to interpret your data isn’t just crucial to measure the effectiveness of your current campaigns - it’s how you plan effectively for your next campaign. The more you track your results, the more you can use your learnings to improve your results in the future.
If you want to squeeze the most value possible from your results, working with an influencer agency can help you save the time and costs that come with managing your own influencer campaign.
At The Influencers Agency, we have established relationships with leading influencers of all sizes and niches so we can help identify the right content creators for your goals, secure lower rates, and build data-driven campaigns that drive ROI.
Chat to our team to find out how to supercharge your next influencer marketing campaign
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