How to measure influencer marketing ROI — the right way
For nearly 10 years, we’ve been working with brands on their influencer marketing campaigns and we know 2 things to be true when it comes to measuring ROI:
- There is no “one size fits all” when it comes to measuring ROI. The impact of influencer marketing is multi-pronged and highly dependent on your goals, as well as the stage of your business.
- Brands tend to oversimplify ROI and look only at direct sales or an ambiguous “brand awareness” metric. Traditionally, marketers think that ROI is solely defined by short-term direct sales. Other brands measure the elusive “brand awareness” without being clear on what that actually means for long-term ROI. While quantitative KPIs can be easily tracked and analyzed, understanding the ROI of influencer marketing campaigns may also require delving into the qualitative data.
To extrapolate true influencer marketing ROI, brands need to understand how to shape their influencer strategies based on short-term and long-term campaign goals, and how they can work in synergy together:
- Short-term activations are campaigns that drive direct sales today
- Long-term activations build your brand story and translate into future sales as you build affinity and trust with your target customers.
Marketers often have tunnel vision when it comes to influencer marketing goals, and prioritize either short-term sales OR long-term business growth. We encourage our clients to have a primary KPI but understand the full-funnel impact of the program.
In this article, we lay out the 4 primary objectives that brands typically put in place in order to effectively measure influencer marketing ROI. We also explain the different ways that return can be extracted from your influencer programs. Let’s get started.
1. Brand visibility
Brand awareness is a measure of how familiar your target audience is with your brand and how well they recall it when prompted. For example, if you were asked to name a skincare brand, what would be top of mind?
Your return on investment on a brand awareness campaign is the number of new potential customers who become aware of your brand or product through the campaign you’re running. This can be tracked with metrics like reach and impressions on their posts, as well as follower growth and organic website traffic on your owned channels.
Brand awareness should be a primary KPI for:
- Brands entering a new market
- Smaller brands in crowded markets
- High-consideration purchase brands (i.e. diamond companies or furniture)
- Brands with a long or time-based sales cycle (i.e. pregnancy products or cold & flu remedies)
If your brand does not fit into these categories, what you may actually need to focus on is brand engagement and affinity. (Skip to the next section!)
There are many different data points to look at to understand brand awareness. We recommend evaluating:
- True Impressions
- Branded search volume
- Social media mentions
- Website traffic from social media channels
- Overall uptick in website traffic
2. Brand engagement
It’s not enough for your target market to know that your brand exists. You want to inspire some kind of engagement from them too because the people who engage with you today are the people who will buy from you tomorrow.
Your return on investment for a brand engagement campaign is the number of people who take action with your brand on social media or on your site. This can be measured on a cost-per-engagement model with metrics such as likes, comments, post saves, clicks, and add-to-carts.
Brand engagement is the hero metric for long-term ROI, as it will help you forecast how your business will continue to grow over time. Engagement metrics such as comments and saves are a good indicator of how consumers feel about your brand and can be considered actions to show purchase intent. So if you’re seeing high engagement today, chances are that this will translate into sales in 1-4 months time, depending on your product or sales cycle.
Increasing engagement and affinity is crucial for:
- All brands! Remember that this is a necessary goal for long-term growth.
- Brands looking to redefine their image. Engagement is a good measure of how people respond to your new approach or rebrand.
Metrics to track:
- Engagement on social posts
- Social post saves
- Cost per engagement
- Email subscriber count
- Follower growth on social media channels
It’s also important to note that you’re not just looking at the engagement on your influencers’ posts. What you need to understand is how their engagement impacts engagement rates on your own channels — such as social media or your website — because that is where sales happen.
3. Direct sales
At the end of the day, every marketer’s goal is to drive sales.
When it comes to driving sales through influencer marketing, all of your efforts will contribute to sales in some way. This includes long-term sales as a result of brand-building initiatives, as well as short-term, direct sales tracked through unique links and promo codes.
Of course, every brand wants to track sales — but we recommend that brands really consider if sales should be their main objective to measure ROI. Certain brands are better positioned to drive direct, trackable sales through influencers:
- Brands with a lower-consideration purchase point
- Brands with a short customer journey (i.e. fashion brands, makeup, etc.)
- Brands that are already optimized on social
- Brands with a good level of awareness and affinity with their target audience
- Brands who can offer exclusive discounts through influencers that are not available elsewhere
So, how can you track all of these sales?
- Unique links: A specific, trackable link so that you can attribute where visits originate
- Promo codes: A distinctive discount code, usually personalized to an influencer
In addition to sales that can be tracked directly through links, savvy brands are boosting sales through influencer whitelisting. With this tool, organic social teams can put spend behind influencer content and seamlessly turn them into paid social ads. Whitelisted ads can also be fully tracked and measured, from impressions and clicks to conversions.
In short, sales ROI entails every sale that can be directly attributed back to influencer marketing through promo codes, analytics, and swipe-up tracking links.
Influencer-generated content (IGC) is an essential, yet often forgotten way to measure the ROI of influencer marketing. IGC can have an impact on your entire marketing funnel and can be seen as an incredibly powerful added bonus on top of the ROI you see from visibility, engagement and sales.
There are several benefits to influencer-generated content:
- Influencer content is extremely high performing. In fact, IGC garners double the engagement of brand-directed content and has 88% greater impact on increasing brand affinity than other content, even user reviews.
- By repurposing influencer content across various channels — including emails, paid ads, website, out-of-home activations, or your branded social media channels — you can support every single stage of the funnel with eye-catching, high-quality content. In fact, over the last year, brands cut 52% from their content creation spend by repurposing influencer content on their marketing channels.
- Negotiating image rights to an influencer’s content is drastically more cost-effective and less time consuming than a full-blown professional studio shoot.
So, how do you calculate content ROI?
First, you can focus on the money you’ve saved on content production. This takes into account total media value, which compares influencer campaign ROI to more traditional campaign ROI, as well as the actual $ amount you’ve saved by repurposing content.
Measure this by looking at the total cost of a traditional photoshoot, and compare how much it cost to generate the same volume of content for your brand.
How can you track the impact content has on your business? Look at the following data points:
- Total media value
- Content performance across channels
- Costs saved by generating content through influencers
- Time saved by generating content through influencers
Start measuring ROI the right way
Ultimately, influencer marketing can support a wide range of a brand’s key objectives. By understanding the full impact of these programs and setting realistic goals, marketers can truly understand how influencers skyrocket business growth.
Measuring the impact of influencer marketing starts with setting goals. Before launching an influencer campaign, define your objectives depending on the stage of your business, the price of your product, and the sales cycle you follow. Then, track both the quantitative KPIs (ie. number of likes, sales, etc.) as well as the qualitative data (ie. comment sentiment, follower authenticity, etc.) to extrapolate the true value of your influencer programs.