In some ways, influencer marketing is no different from any other form of marketing. To be of value to your business, you need to demonstrate that it can provide an acceptable return on investment (ROI). But, one early concern in influencer marketing was that businesses struggled to understand how they could measure ROI. Some people were under the impression it didn’t seem as clear-cut.
Despite influencer marketing being a lot more measurable than traditional forms of advertising (including television ads and billboards), the C-Suite in many companies demanded concrete ROI figures.
As influencer marketing matured as an industry, it became more clear how to measure ROI in influencer campaigns. Yes, sales revenue is the main goal for any business but there are so many objectives that you can establish in your campaigns.
You Can’t Measure ROI Without Firstly Setting Your Goals
The first step of any influencer marketing campaign is to determine why you are doing it. You need to establish what you want to achieve from your influencers’ efforts. If you lack goals for your influencer marketing, you are engaging in “hope” marketing.
In our post on The 2017 Shorty Social Good Finalists, we wrote about six influencer marketing campaigns that made it to the finals of the Social Good Shorty Awards Finalists in the Best Influencer and Celebrity Partnership category. The winner was Idris Elba’s Omaze Valentine’s Campaign for W.E. Can Lead. One common factor to all these campaigns was that they had clear goals. This made it easy to measure ROI on each campaign and gauge their relative levels of success.
There are many reasons why your brand may wish to engage in influencer marketing. For instance, you might aim to:
- Increase your sales by $X per month
- Increase your followers on a particular social media platform by X per month
- Add X subscribers to your blog
- Increase your app downloads by X each month
- Increase your engagement on your Facebook page by X per cent
Every goal doesn’t need to be so statistical. Yes, numbers should indicate how successful certain missions in your campaign have been but your main objectives don’t always need them. For example, a goal may be to identify what variables are encouraging consumers to buy your product or engage with your content. Maybe, a particular influencer niche is converting more of your audience than another.
3 Unique Ways to Measure ROI in Influencer Marketing
1. A/B Testing Missions
As just stated, your goals within a campaign don’t have to be so typical. Your goal could be to test what variables are impacting your KPIs. When your influencer campaigns are split into a number of key missions, you can craft a much more thorough strategy that optimises your budget. This is something our influencer marketing agency does to ensure our clients get a clear picture of what’s working for their brand. By doing a/b testing you can identify what types of influencers to use, what type of content works best, what the influencer should verbally say and a lot more.
Conducting a series of missions like these may seem less valuable in the short-term, but in the long-term, it is incredibly valuable and something that we strongly recommend doing. It’s also an approach that will bring your company to the next level.
2. Quality of Customers
One thing we’ve found is that brands often care about the total number of customers more than the quality of those customers. Everyone should really measure the ROI of their influencer campaigns by reviewing the quality of the customers they’ve managed to attract.
There is evidence that customers brought in by influencer campaigns tend to be of better value to you than those generated by many other marketing techniques, such as PPC display ads.
This is because these consumers are followers of people, who are experts in your field. They have chosen your brand because of a recommendation from somebody they respect. This usually means they are more likely to be loyal and interested in what you have to offer, compared to somebody who might have bought products from you on price alone.
Nielson found that 84% of consumers trust the value of their peers, along with the people they follow online. So it makes sense that the customers you gain through influencer marketing are going to be more valuable to you. They tend to have a deeper understanding than other consumers.
3. Isolated Marketing
In some ways, the clearest way to determine the effect of influencer marketing is to create an isolated influencer marketing campaign. You would devote your entire marketing budget to influencer marketing for a set period of time, and then take note of the changes in your key metrics.
Again you would place your focus on the goal you set for your influencer marketing campaign. If you intend to use it to increase your sales, then you should look for a clear correlation between your influencer campaign and any increased sales or downloads.
This is something we’ve done with many of our clients, and it has enabled them to directly attribute all of the acquisitions to us and our campaigns.
In some cases, isolated marketing could be considered to be an extreme measure, and it’s not always feasible for companies of a certain size. However, one way we’ve dealt with this in various influencer marketing campaigns for global corporations is by attributing x% of the total conversions to our campaign. This percentage needs to take into account an estimation of the number of conversions that would be likely to occur if no influencer marketing campaign was conducted by us. This is typically an average amount of conversions that take place over a period of weeks.
6 More Common Ways to Measure ROI
4. Website Traffic on Google Analytics
Sometimes firms engage in influencer marketing with the aim of driving traffic to a particular landing page, whether it’s an event, competition, discount or standard website page.
The easiest way to see the success of this is in your Google Analytics account; where you can see how many people you’ve driven to your landing page in the timeframe of the influencer campaign.
You also use this measure when you are targeting people in the higher levels of the sales funnel. If you are targeting people further through the sales process, you are more likely to want to know what they do on reaching your page, rather than just knowing they have seen the landing page.
On your Google Analytics account, you can, of course, measure the number of link clicks, the demographics of those audiences and the quality of their traffic.
5. Reach and Impressions
Your reach becomes an essential measure when your primary goal is to boost the visibility of your content or the awareness of your brand. This is similar to how you would measure success in a traditional advertising campaign. Reach and impressions are an essential KPI for all brands conducting influencer marketing. And they are a KPI that brands should focus on when bringing out a new product, changing their brand name or if their brand isn’t so well-known.
The idea behind measuring reach is that the more eyes you can get on your content, the more people you can encourage to interact with it now and in the future.
If reach is your goal, it makes sense to work with those influencers in your niche who have the highest genuine followings.
However, there is an essential distinction between reach and impressions. Reach represents the number of people who theoretically see the post an influencer makes. It corresponds to the number of followers that an influencer has.
Most people prefer to look at impressions, however. Impressions represent the number of times your content is seen, rather than the number of people who see it.
Beware of Fake Reach
Audience reach is a rough measure of somebody’s influence. Generally, the more popular influencers have more followers. But some people gain followers by buying them, and there is little value reaching out to fake followers.
In most cases, you will want people to do react once they have seen an influencer’s post. If somebody interacts with an influencer’s post, it is a clear sign that they have taken an interest in it.
By definition, an influencer has to influence his or her followers. Mere engagement does not indicate influence. However, if people are willing to engage with an influencer’s posts, they undoubtedly must be interested in the content shared.
As you know, there are different types of engagement, with levels of connection differing between the various social networks. Some engagement is relatively passive – it doesn’t take much to like a post, for instance. Others, like comments, require more thought and work, so are more coveted.
Shares are an even better type of engagement. They indicate that somebody likes the post so much that they are willing to share it with their friends and followers – widening the reach, impression and possibly engagement even further.
When you try to measure the ROI of an influencer, you often look at engagement as a whole. Somebody who engages with their audience will be far more valuable to you than somebody who merely broadcasts to his or her audience, and takes little notice of how they react.
Beware Fake Engagement
While engagement can be a valuable measure of the success in an influencer campaign, you need to be aware of fake engagements. Just like unscrupulous people buy followers, some so-called influencers purchase fake engagement. You do not have to Google very far to find ads offering to sell you Instagram or Facebook likes.
For ineffective influencers, you will find that over 75% of their comments are generic compliments that have nothing to do with the actual content posted. For example, “Nice post” has little value to anybody. If you see too many of these short, meaningless comments, you should be wary. Although, do bear in mind that most influencers get them regardless. But when it gets to 70%/80% of their comments being generic, you need to stay clear.
PMYB ensures that our clients don’t suffer from this kind of engagement fraud. We carefully evaluate the social accounts of the influencers we choose to work with. Having a clean account is a critical factor in our influencer Chromo-Analysis, the process in which we determine who qualifies to be a Chromo-Influencer.
7. Including Coupon Codes
One of the most common goals of influencer marketing is to increase sales of your product. This is another situation where your influencers have a distinct conversion goal to meet.
However, there can be a lack of clarity tying a particular campaign with an increase in sales. You can’t automatically assume that one leads to the other. If your influencers use coupon codes in their posts, the connection becomes much clearer. Coupon codes allow you great flexibility in your campaigns. You can create new coupon codes for different users and campaigns.
For instance, you might give a custom code to a particular influencer who then offers his or her followers a 20% discount if they use the custom code.
Coupon codes have another advantage. People love it when they feel they are getting a bargain. If a consumer receives a coupon code, they have a real incentive to use it, particularly if it has an expiry date, creating a feeling of scarcity and exclusivity.
Despite this, it’s important to recognise that not every sale you get will come as a result of the code. That additional awareness may drive people to your product a few days down the line, or even months down the line.
8. Tracking Links
The use of tracking links is a standard way to establish the success of your influencer campaigns.
Although you can use tracking codes for many purposes, they are another way you can see how effective your influencers are at increasing your sales. If your influencers carry out a campaign, with individualised tracking codes, and then you see an increase in sales using particular codes, you can see a clear correlation.
An example of a useful link generator customised for app downloads is Onelink. Onelink gives you a short link or QR which you can use to send consumers to download your app. You add the download URLs to your app and Onelink will determine which app store to send the consumer. This skips out the step of having a landing page, whereby the consumer has to pick which app store to download the app from.
Tracking links, again are good for measuring how much traffic you are generating. However, it’s important to know that a high portion of people that see this link are most likely going to go directly to your website or app, without clicking the link. Because of this, you need to measure an uplift in traffic shortly after your content has gone live. This way you’ll be able to spot how effective your content truly was.
9. One more Common Way to Measure ROI – Growth in Followers
You may set a goal to increase the followers to one of your social media accounts by a certain number or percentage. This is similar to the Reach measure – except here your focus is on your brand’s reach, rather than the influencer’s. You aim to work with influencers to attract some of their followers to your accounts.
Although you technically aren’t earning any extra income at this point, you could have set this goal to help your future marketing campaigns.
Your aim here will typically be to use influencer content as a catalyst to bring people to your platform.
Businesses often do this when they are setting up something new, such as launching a new brand – They want to build up numbers fast.
To measure ROI for this, you simply have to set a nominal value for each additional person you follows you. You will need to consider how much each extra follower is worth to you for potential future sales to discover the value of the campaign.
Measure ROI Effectively In Influencer Marketing
We’re in a state of influencer marketing where measuring has never been so easy. Brands are seeing the evidence of its value more than ever.
Most businesses who try influencer marketing come away happy with the success of their campaigns. But there are a few who don’t put the effort in. They pick the wrong goals, they pick unsuitable influencers and fail to measure ROI in their campaign activities effectively. In short, they don’t do their homework, and just “hit and hope”.
To understand what works, you need to test before you spend your budget sporadically. Use the above forms of measurements to do so and get the most out of your influencer budget.