Practical ways to measure influencer marketing ROI
With the influencer marketing industry continuing to grow and evolve, it can be seen as one of the best digital strategies to happen to your brand, if done correctly. Brands are set to spend up to $15 billion on influencer marketing by 2022, so it is important to understand how to use it in a strategic way to reap the maximum benefits. By gathering the right metrics it can allow you to measure the success of a campaign and consequently allow you to evolve your strategies accordingly.
Like any other business expense, you need to justify whether it’s worthwhile. Therefore, you need to be able to prove that your influencer marketing campaign is generating a positive return on your investment.
To help our brands out, we are going to provide a step-by-step approach to allow you to measure your ROI of a specific campaign.
Set your goals and budget
First off, you need to set clear goals for your campaign to help give direction to your strategy. There are multiple reasons that a brand would undertake an influencer marketing campaign, so you need to make it known at the start to be able to measure your ROI and the success of your campaign. The most common goals for an influencer campaign are to:
- Generate sales
- Increase brand awareness
- Lead generation
Once your goals have been identified, it is important to identify the proper metrics that will allow you to be able to measure the campaign.
It is important to remember that more than one metric can be used to measure your campaign objective. To understand this we should look at the different metrics that can be used for the different types of goals.
If you were looking to increase brand awareness, the metrics you would look at would be social media reach. This encompasses impressions, views, shares and follower growth rate. The below image is of one of our members creating content for Heritance Aarah. The brand were looking to drive awareness of their beautiful 5* hotel, and invited creators to share their experience on their social channels, through content tagging.
Additionally, if your goal is to generate sales you need to look at the number of purchases made and the amount of revenue created.
Once you have the metrics identified, you can then move on to tracking these through the use of different tools.
Select tools to track metrics
You now need to determine which tools you are going to use in order to track these metrics and design the campaign with these in mind. In order to measure individual influencer’s results, you should think about using unique URLs and hashtags (as seen in the example below), affiliate links, and unique discount codes.
Tracking attribution can be challenging, especially if multiple influencers use the same hashtag to post about your brand. It is difficult to determine which individual is generating the most buzz or sending the most traffic to your page, but ultimately it is all generating the same awareness and contributing towards that campaign goal.
A great way to track the effect an influencer has on your sales can be by providing them with a unique code. They can use this code to share with their followers on their social channels. This strategy will allow you to effectively attribute conversions to a specific influencer, making the tracking process simple.
In order to help gather this data, you should make the use of the tools available to you. There are many tools out there, but a great example of one, and one that we use to report for our brands, is Dyzio. Dyzio allows you to find, track and anaylse your campaign in real time, whilst creating reports that are fully automated and shareable.
This now takes us onto our next step of calculating your initial investment.
Calculate the cost of the campaign
Once you have compiled the data, you need to determine the costs spent during the setup and running of the campaign.
In many cases influencer marketing will involve an influencer fee. Influencers can charge a fee for posting a sponsored post for your brand. In other cases, influencers can offer their services in exchange for your product or services. Therefore, you need to calculate the amount incurred of acquiring their services.
Other related costs you need to take into account is the cost of sending out product samples to the influencers, as well as the cost of giving out gifts, vouchers and discounts. You need to calculate the cost of producing the content and any tools that you employ for enhancing the content.
Calculate influencer marketing ROI
With all the data you have gathered you are now able to calculate your return on investment. The importance of calculating the ROI is to see if the return of your campaign is positive or negative, which will determine whether it was worthwhile and should be done again in the future.
The simple formula for calculating influencer marketing ROI is:
ROI = PROFIT/INVESTMENT x 100
The profit in this case will depend on the objective of running the campaign and will be based on the value that these campaigns generate. So if you were looking at brand engagement you would look at likes, comments, shares and positive brand mentions to figure out your profit. Calculating the cost of investment is mentioned in the previous step.
Once you have calculated your ROI, it will now put you in a position to assess whether your campaign was successful and what possible actions need to be taken to further enhance your campaigns in the future. Not only does it allow you to learn from past mistakes, but you can now optimise your efforts and eliminate low performing campaigns moving forward.
Measuring your influencer marketing ROI can be challenging, but it is vital in determining the success of the campaign. In order to make the most out of your influencer campaigns you need to effectively plan and constantly track the ROI.
It is important to remember that what you track depends on your goals and how the campaign is measured. So setting these out from the start will help simplify the process. However, you should take into consideration that these metrics may not provide the full picture but assists in the decision process of working with influencers.
If you are interested in working with like-minded brands or talent to create authentic collaborations, then look no further, contact us today. By using our platform we provide extensive campaign data, including metrics such as ROI and EMV, meaning that can we take the stress out of determining the success of your influencer campaign.