- 1. What is influencer marketing ROI?
- 2. Influencer marketing ROI challenge
- 3. How to track influencer marketing ROI
Table of contents
What is influencer marketing ROI?
Influencer marketing ROI is the rate of return on any influencer marketing investment. It is the ratio between the cost of your influencer marketing campaign and the estimated profit resulting from that campaign. Comparatively, influencer marketing is renowned for producing a far higher average ROI than all other forms of digital marketing, for instance, pay per click (PPC), static banner ads, cinematographic ads, pop-up ads, and other more traditional social media marketing ads. With influencer marketing being such a lucrative and fast-paced marketing approach, it is very important for marketers to keep track of their rate of return.
Influencer marketing ROI challenge
Where many novice influencer marketers usually get confused is in calculating ROI. The reason that it isn't always a straightforward task is that ROI with this type of marketing doesn't always mean direct sales conversions, it can be measured by other important metrics as well. Thankfully, there are many well-established methods for calculating your influencer marketing ROI, such as through influencer marketing metrics including Audience Data, Media Value Per Post, Earned Media Value, and other marketing factors.
How to track influencer marketing ROI
Set up your influencer marketing KPIs
Certain metrics are associated with different outcomes, so by focusing on a single desired outcome, you’ll be able to create a map out of the influencer marketing metrics maze. In order to calculate the ROI, marketers should check out this influencer marketing KPI model to understand the possible targets of an influencer marketing campaign.
Influencer Marketing KPI Model © InfluencerDB
Utilizing tracking tools
As any influencer management analyst will tell you, it is extremely important to utilize comprehensive tracking systems when running an influencer marketing campaign. One of the most effective tracking ways is using social media tracking tools, which is able to create campaign tracking links. These links will gather highly accurate and up to the minute data regarding total traffic volume, user engagement, e-commerce conversions, visitor demographics, and other important metrics that can help you calculate your ROI.
Create a unique landing page for specific influencer marketing campaign
Another method that influencer management analysts use to calculate ROI is by creating a unique landing page designed for a specific marketing campaign. If you can tie the landing page to the influencer brand and incentivize a call to action, then you can pull extremely telling ROI data off of the page. It is important when setting up a landing page that you use a page that is not generally accessible unless you can visit it through the influencer's marketing campaign, that way the data set isn't contaminated by visitors accessing the page from non-influencer based sources.
Closely analyze your influencer marketing metrics
An often overlooked aspect of influencer marketing ROI can be found in your marketing metrics. For example, if you are running an Instagram influencer marketing campaign, be sure to closely measure the likes received, the total like-follower ratio (LFR), the monthly (or daily) follower growth rate, positive or negative engagements, and many other important engagement metrics. While many of these metrics will not yield an immediate sales conversion or monetary gain on Instagram or any other platform, they are good indicators showing the possibility of monetization later down the customer journey.
Create performance tracking channels
Many influencer marketers forget to do one of the most important ROI tracking tasks, which is to set up individual performance tracking channels for your marketing campaign. If you're running more than one marketing campaign simultaneously, then be sure to set up additional channels to accommodate that. The more individual channels you have the greater insight you'll have in determining not just your overall ROI, but also your channel specific performance rates rather than just a broad overview condensed into one channel. Knowing which channels produce the highest ROI is an invaluable bit of knowledge that can help you fine-tune your future marketing campaigns and further increase your profit margin.
Evaluate your brand advocates
Once a marketing campaign has completed, one important factor in calculating your ROI is in determining the overall brand awareness growth by comparing the number of brand advocates before and after the campaign. Metrics that you analyze to figure this out are likes received, followers gained, referrals received from other sites, hashtag mentions, and any daily traffic growth. A well-run campaign will see a large volume of growth across all of the aforementioned metrics. While many of these metrics do not correlate with immediate monetary gain, they will likely convert to a monetary ROI in the short or long-term future. Always look at brand awareness growth as a bit of a snowball effect, where more growth across brand based metrics can, in turn, lead to further growth without the influencers.