Influencer marketing is no longer a fad, it is part of the social media marketing business model. A quick search online for “Influencer marketing costs” will return many results. However, there is less information about what the ROI (return on investment) is for hiring or partnering an influencer. In the following article, I will provide details about what a business can expect for their investment in influencer marketing.
Importance of measuring ROI
There are multiple ways to generate revenue in the social media marketing realm. Whether it be paid advertising, promo pop-ups, or influencer marketing, it is important to measure the ROI.
Every business has a budget, devotes a percentage of it to marketing among other things. So, if you want to pay an influencer, for example, $10,000 to promote a new product. There is an expectation of a return on monies spent. The goal is to increase sales by 20% in three months. Or it could be increasing engagement by 50% in the second quarter.
The finance department will request the amount of money you want to spend along with baseline returns. In short, any person or team needs to justify the money they want to spend on this type of marketing. Ultimately, any form of marketing needs to lead to a noticeable change, such as leads, conversions, or sales.
Showcase results!
Any expenditure in a business needs to be justified. Said another way, will it be worthwhile to spend “x” amount on dollars on partnering with an influencer? Utilize an ROI calculator to demonstrate how effective your campaign is going to be if approved.
In simple terms, if you spend $3000 on this campaign with John Doe, your return will be $5000. Clearly, this investment is worth it in this example. The goal could be based on generating sales, leads, conversions, traffic, or another clearly measurable metric.
Other variables that might affect ROI is the type of influencer, sales, or promo codes. Add these variables to a presentation or a what if analysis to account for them. This way when the campaign is over there are no surprises whatsoever.
Adaptability & data drive growth
Once you have created different scenarios, they will enable you to shift strategies. Suppose you added a lot of promo codes to a campaign last month and that yielded less sales. This month you can simply adjust the strategy and see what happens at the end of the campaign.
Sometimes it is necessary to run long campaigns if they’re successful. Other times, short campaigns will do but these decisions need to be based on previous results. Use the ROI data you collected and couple it with A/B testing to see which campaigns are more successful. Then launch these campaigns across different platforms.
Establish KPIs before launch a campaign!
Whether you gather in an office or via Zoom, set aside time to establish KPIs. Common KPIs are click-through-rates, impressions, reach, impressions, clicks and finally link tracking. Gather all reports related to content creators/influencers and what they were paid.
Those who have performed the best will clearly stand out. Afterwards, you can decide which influencers to move forward with.
Post influencer videos as social media ads
One of the most effective methods to increase ROI is by using videos as social media ads. Make sure you have approval or rights to post videos – of course. View through and click through rates are great. People trust these ads, that’s why they resonate with them. Often, these ads’ performance exceeds others.
Ways to measure ROI: Track Visits, Referrals, and Registrations
Website activities such as visits, referrals, and registrations are a fantastic and straightforward way measure ROI. Your team must determine exactly how many of each are meaningful. You might want to know how many referrals were made in a week, a month, or the past six months. The number will reveal whether campaign and influencer are having a positive effective on brand.
Monitor Sales, URLs, And Hashtag
KPIs- Keep track of them from month-to-month to see how sales are trending. How are customers/users getting to your website? Find out by checking URLs where they are entering – it’s best to use Koji. Of course, Google Analytics also displays URLs which customers clicked on. Hashtags are another clever way to track interest. Influencers should post content with them, afterward, they can be tracked to see customer interest.
Review metrics at three-month mark
Shorty after you launch a new campaign with an influencer, you might be antsy to see metrics within a week. Frankly, a week is not enough time to gauge any ebb or flow in traffic or sales. Three months after a campaign is the perfect or ideal time to review metrics.
You can compare data from week-to-week, month-to-month, or different times of day and weekend. Trends will be more visible and meaningful because of the larger data set.
Distribute Distinctive Promo Codes
Each influencer you partner with should be given a unique promo code. Within a short period, you will see who is performing the best in terms of sales. Ultimately, as business owner you want to make money. Even though you might loss some monies, it will be worth it in the end.
Summary
Influencer marketing is another marketing strategy which has been proven to be worthwhile. Despite that, any business should understand what the ROI will be before writing a check. Measuring ROI is vital because you need to see whether campaigns or partnerships with influencers are generating sales, engagement, or an uptick in traffic.
Sources
Maher, Sharon. 12 Methods to Accurately Measure the ROI Of Influencer Marketing. Forbes.https://www.forbes.com/sites/rogertrapp/2023/07/29/executives-need-to-be-careful-before-diving-into-the-world-of-ai/?sh=4e5081e75f24
Schaffer, Neal. Influencer Marketing ROI: The Ultimate Guide to Measuring It the Right Way. Neal Schaffer. 4 May 2023, https://nealschaffer.com/influence-marketing-roi/#:~:text=Influencer marketing is proven to,they spend on influencer marketing.