How to measure Influencer Marketing ROI
Do you know how to measure Influencer marketing ROI?
100K followers on Instagram, high quality contents, engaging storytelling videos and discount codes, that’s all very well, but do you know how to measure Influencer Marketing ROI?
Although it may be perceived as a passing fad, Influencer Marketing is exponentially growing and is adopting a more serious and scientific “guise”. Last year, 86% of marketers reported utilizing influencer marketing, while 39% said they will increase their investment in the practice in 2018.
If you’re new to Influencer Marketing, which I doubt since you’re reading this article, you need to know that it is a form of marketing which takes advantage of the influence that certain persons with specific demographic and social features exert on the audiences, and who are capable of affecting their purchase decisions. In short, it is an updated version of the traditional word-of-mouth marketing tactic.
So, as with any other type of Marketing, you have to demonstrate that your campaigns produce a fair return on investment (ROI). It is not by chance that, according to communication managers, the most daunting issue of Influencer Marketing campaigns for brands is to understand how to measure results, made even more complex by the trade of fake followers and likes.
The formula is always the same: (gain from investment – cost of investment) / cost of investment
Calm down, let’s start with the basics! Here is our step by step guide on how to measure Influencer Marketing ROI.
Set your budget
First things first, if you want to measure Influencer Marketing ROI (return on investment) you have to set a budget, ergo you should decide how much you’re prepared to invest! Don’t forget that you need to include all labor costs, not just the sum related to the influencers and the free products you want to send them.
Define your goals
What do you want from your campaign? If you want to know how to measure Influencer Marketing ROI, you need to define clear goals. Brand awareness? Lead generation? Conversions? Sales growth? Once you define your objectives, then you can determine your KPIs.
Choose your Key Performance Indicators
As stated above, the choice of the metrics for your Influencer Marketing campaigns depend strictly on your goals. Metrics? KPIs? What are we talking about? Don’t panic, here is a useful smattering of the key performances indicators you need to learn if you want to measure your influencer marketing campaigns ROI (which should be mandatory!).
Reach and impressions
Do you want to position your content in front of as many people as possible? You have to calculate the Reach, which is the number of unique people/accounts that have seen your content/post, but also the impressions, that is the number of times people view an influencer’s post. This information is not public so you need to ask the influencers to share this information with you.
Some influencers have a huge audience, which translates into a large number of impressions. But it’s not enough, you should also measure the engagement, a valuable metric that brands usually use to measure long-term ROI. Engagement means the amount of likes, comments, and shares a post gets. Here you have to pay attention, because the trade of fake likes and comments has become the rule! However, our rule is different: quality over quantity! Evaluate every single comment and like!
Conversions, this is a big hotchpotch containing different KPIs. First of all, a conversion is the answer to a Call to Action, and no, it’s not only about sales! Of course, your conversions depend on the goals you’ve set at the beginning. It could be the numbers of new followers, if your goal is to increase your Brand Awareness or if you simply want to make your social media accounts grow. It could also be the number of mentions on social media platforms, the traffic to a particular web page or landing page or the number of new subscriptions to your newsletter. The goal of your Influencer Marketing campaign is to get information about your audience/ potential customers/users? Then your indicator could be the number of form completions! Last but not least, let’s not forget the indicator of the indicators, the increase in products/services sales, even easier and more efficient if you use trackable links and affiliate-specific discount codes!
We know, it’s easier said than done! Don’t worry, we’re here for you! If you want to set and evaluate Influencer Marketing campaigns, we would be very pleased to assist you!