Marketers say that proving the ROI is the hardest part of influencer marketing. But it is possible to measure effectively, and today I’ll show you exactly how to do it.
Influencer marketing can deliver results.
The Influencer Marketing Hub found that for every dollar spent on influencer campaigns, the average earned media value is $5.20 — with some businesses reporting up to $18 in earned media value for every dollar they spend.
However, earned media value is just one measure of influencer marketing ROI, and I believe this is where the trouble starts for marketers…
In a recent survey, 76% of marketers cited measuring the ROI of influencer marketing as their top challenge. And, honestly, I think this comes down to the fact that many marketers are looking for a ‘one-size-fits-all’ solution to ROI.
Here’s the truth:
There’s no single way to measure the ROI of influencer marketing.
Many ‘best practices’ will point you to measure sales, revenue, reach, or earned media value, but the ROI largely depends on your campaign objectives.
Here’s how to measure influencer marketing ROI on a campaign-by-campaign basis.
1. Understand the goals of your campaign
Influencer marketing is often viewed in its own bubble, but really, it’s just like any other marketing tactic and should be measured as such.
Influencer campaigns can help your business in a number of ways:
- Brand awareness: Getting your brand in front of your target audience
- Brand reputation: Creating affinity for your brand through an influencer
- Sales: Driving sales directly from influencer’s audiences
- Lead generation: Capturing data and new sales leads
- Engagement: Number of people interacting with your brand
- Traffic: Getting people to your website or a specific landing page
Any influencer campaign should always start with a clear goal, this will help you to measure success once the campaign is complete. So before you start, decide exactly what you’re trying to achieve.
2. Choose KPIs for each goal
Once you have a goal (or goals) in mind, you need to think about how you will actually measure effectiveness in order to tell if your campaign has moved the needle at all.
Each goal could be measured in a slightly different way:
Sometimes it’s not all about sales or traffic. If you’re a new business or launching a new product, you might just want to get in front of people and build some top-of-funnel awareness.
For this type of campaign you might not be looking at dollar signs to measure ROI, instead you’ll be focusing on data like:
- Post Reach: How many views has each influencer post in your campaign gained
- Unique Views: How many individual people have seen posts included in this campaign (sometimes people can see the same post more than once, so it’s important to look at this in context with Post Reach)
- Share of Voice: The number of mentions your brand received in comparison with your closest competitors
- Branded Searches: This can take a while to show, but as more and more people hear of your brand, the number of branded searches should increase. Keep an eye on keywords directly associated with your brand (e.g. Your brand name or key product names)
Sometimes you might want to launch a campaign to shift the consumer perception of your brand. This could be based on a rebrand, to launch a new product or to counter some bad coverage you may have received.
For example, after Samsung saw a number of bad press pieces after its phone battery issues, it turned to influencers like Casey Neistat, to switch the conversation back to the power of its technology, rather than the tech itself.
Here are a couple of ways to measure reputation online:
- Key Message Penetration: This tracks the key messages you want to see in any coverage or mentions. For example, how many people are talking about your new slogan after a campaign
- Social Media Sentiment: If you’re looking to create some positivity about your brand (much like the Samsung example above), checking the sentiment of your social media mentions is a great way to do this
- Focus Groups and Surveys: Survey members of your target audience to see what they think about your brand. If you do this regularly — or at least before and after campaigns — you can see how your marketing is affecting your brand’s reputation
Here’s where the dollars start coming in. And though the goal of almost any marketing campaign is to bring in revenue eventually — e.g. changing brand reputation will hopefully drive long term customers — some influencer campaigns can be measured directly by sales.
- Revenue: Revenue is the amount of money generated by sales in this campaign
- Unit Sales: According to Linqia, 46% of influencer campaigns are measured by product sales. With this figure, you’re often looking at the number of units sold directly from a campaign
- ROAS: Return On Ad Spend (ROAS) is a great way to ensure your campaigns are profitable. The calculation for ROAS is: ROAS = (Revenue derived from ad source)/(Cost of ad source). For example, if you spent $1,000 sponsoring an influencer post and generated $5,000 in sales your ROAS would be 500%
Hubspot describes a lead as: “a person who has indicated interest in your company's product or service in some way, shape, or form.”
And with influencer campaigns aimed at lead generation, you’re looking to capture data from people interested in your business. Often this will be an email address.
You can measure lead generation by:
- Leads Generated: The number of new leads captured as part of this campaign
- Sales Qualified Leads: Many businesses have a process of ‘qualifying’ leads to ensure they fit with their business. The more qualified a lead, the better their chances of becoming a customer
- Conversions: This is the number of leads that convert and become customers. It can be best to measure this figure over a longer period of time to allow leads to move through your funnel
Engagement has become an important measure for influencer campaigns, with 90% of marketers using it as a gauge to judge the performance of their campaigns.
Engagement is so important because it focuses on the number of people interacting with content around your brand. It may not bring direct sales right away, but it shows there’s an interest there and potential for future revenue.
Here’s how to measure engagement:
- Cost-Per-Engagement (CPE): This figure shows the cost of each engagement on posts within your influencer campaign. Engagement can include likes, shares and comments. The calculation for CPE is: (Spend)/(Engagements). For example, if you spent $50 on a campaign and generated 1,000 engagements to CPE would be $0.05
59% of marketers use clicks as a measure of success for their campaigns. Traffic measures clicks to your website or chosen landing page from posts included within your influencer campaign.
To measure traffic you could look at:
- Clicks: How many clicks were generated as part of your influencer campaign.
- Cost-Per-Click: The amount of money you spent on the campaign divided by the number of clicks it received
- New Users: This figure shows the number of visitors that have come to your site (or landing page) for the first time. Great if you want to specifically connect with a new audience as part of your campaign
3. Set Your Targets
At this stage, you should know what you’re measuring: Your overall goal and the KPIs relating to that goal.
For example, let’s say you want to create a campaign to drive new potential customers to the landing page of a new product, you might include the KPIs:
- New Users
You then want to figure out what the targets for the campaign will be.
To do this you can look at some previous benchmarks. Ideally, you might have some data for previous influencer campaigns or industry benchmarks, but if not for other forms of advertising such as search or social media ads can also work great.
You essentially want to set a baseline that you want to achieve with the budget your investing into your campaign.
For example, if you know you can generate clicks from Facebook Ads for $2.40, you might want to see similar results from your influencer campaign. So set a benchmark at $2.40 per click.
With $1,000, you could then set a target of over 416 clicks for this campaign. And if the influencers you’re working with are new to the business, you might aim for 80% new users.
The targets you set will always be specific to your business and unique circumstances.
4. Track Performance
As your progress through your campaigns you need to measure performance to see what’s working and what’s potentially not.
You could use your own spreadsheet to measure performance, or an influencer marketing tool like Traackr. What’s most important, though, is that you are checking in regularly in progress towards your goals and KPIs.
For more on how to track influencer marketing campaign performance, drop us a line — we’d love to chat.
5. Share Learnings
How did you campaign perform? Every marketing campaign will generate a ton of learnings for your business and you should always make a note of them and share them with your team for future reference.
A few things you might want to pay attention to:
- Did you achieve your targets? Why/Why not.
- Which influencers were best to work with?
- Which influencers posts performed the best?
- Which influencers drove the most ROI?
- What would you improve for your next campaign?
Are you ready for your next influencer marketing campaign?
Thanks for reading this post! Do you have any influencer marketing campaigns lined up? If so, let us know in the comments or get in touch, we’d love to hear what you’re working on.