How to think about ROI and Influencer spending
Influencer marketing might an important fixture in advertising today, but it wasn’t until a couple of years ago that it even began to make its mark on Google Trends. In fact, the situation was such that it registered only 6% of the interest it has now, and has only increased since then.
Back when we launched our website and started to use this technique to generate traffic, many international brands didn’t even know that such a concept existed. The only way bloggers and companies were able to connect with one another was through expensive social media agency platforms.
In such a situation it was next to impossible to find out the true reach and impact of influencer marketing campaigns. Over time, the concept has developed into a transparent system with tangible results. Now brands are able to measure multiple areas of their campaign using Google Analytics, social metrics and affiliate links.
Measuring the return on investment (ROI) of influencer marketing techniques depends mostly on the objective that you are trying to achieve. Despite the apparent urge for marketers to look at sales & revenue, there is a wide variety of opportunities in focusing on other relevant figures.
For example, if a brand is looking to reinvent its image, positive engagement is the single most valuable return on investment. This is in complete contrast to other brands who may just want to add content to feed their blogs, social media pages and campaigns.
Here is a look at four different ways to measure the ROI of influencer marketing based on various objectives.
Some brands want to measure the success of influencer marketing on an engagement it has previously ensured. This is measured in cost per engagement (CPE), or the amount of money being spent in relation to comments, likes, views, video click through, etc.
Some brands are more concerned about engagement because it’s more indicative of customer satisfaction with regards to the brand, not just the product. This method of measuring engagement is very modern compared to metrics that are based on the relationship of results against sales. In the long run, CPE collaborations can reach a cost per engagement as low as $0.01, which emphasizes the monetary effectiveness of influencer marketing.
Over time CPE has helped establish the success of influencer collaborations, largely because it focuses on short term sales targets in addition to long term brand interest. Engagement in this regard can include; shares on Facebook, retweets on Twitter, repins on Pinterest, etc.
Visibility is obviously important for a rookie brand in the market, but it’s also worth considering for every new product that they release. Growth-oriented campaigns usually have visibility at the forefront of their priorities, as it represents a measure of how many new potential customers have been influenced through the company’s efforts.
To properly measure visibility, it is important that you target impressions. The use of influencer marketing helps to do this by focusing on customers who are most likely to buy your product, through the choice of bloggers with relevant skills to make them the right fit for your target audience.
Not many brands are able to understand the content benefits of influencer marketing. Buying image rights for content is usually cheaper than coordinating photo ops, and even allows for third party endorsement. This means that the content has a strong ROI projection over time, whether it’s because of the potential to increase sales, expand the reach of the brand using influencers, or cut costs on the in-house creation of content.
The first things that come to mind when you hear the word ROI is “money spent” and “revenue generated”. How can you tell if the influencer marketing technique that you’ve chosen has returned the amount you spent in terms of revenue? This is a multifaceted issue with four possible solutions to determine your success.
If you have used affiliate links you can track online sales made through the site’s social media channel or blog posts.
To track online sales you can use Google Analytics by creating an “Event” that lets you see which one of your online customers are able to visit your e-commerce site, blog or social channel.
The use of promo codes is a very abstract and simple way to track the impact of influencer campaign on immediate sales, but also find out the the sales funnel of the purchase.
Isolated marketing where you are able to isolate a particular product and promote it solely through influencer marketing lets you track that product’s sales throughout the entire funnel.
A brand will only be able to spend some time identifying which of these methods to choose after developing an awareness of their specific objectives. Influencer marketing continues to gain value in this area over time, and measuring results will only help you to decide if it’s right fit.
Are you a brand marketer or agency? If so, be sure to check out Grin. Our influencer marketing platform streamlines all the tedious tasks of running influencer campaigns. We also have simple, straightforward ROI reporting, so you can always measure the effectiveness if your influencer spends.
If this sounds like something you are interested in, then be sure to book a demo here today to see what we’re capable of.