How Do You Measure the ROI of Influencer Marketing?
Measuring the success of your influencer relationships is both necessary and delicate work. Measuring return on investment (ROI) was the biggest challenge for influencer marketing in 2018, according to a Linqia study:
So, how do we measure the efficiency and ROI of campaigns?
1. Measure according to the objectives of your campaign
An influencer marketing campaign can be thought of with many different goals in mind. For example:
- Increase brand awareness
- Promote a product/service
- Improve your brand’s reputation
- Community growth
- Generate sales or leads
These goals should be at the forefront of your campaign. At every step of planning & implementation, you should always keep this goal in your mind.
2. Choose your KPIs
- The reach of influencer: Number of unique people who have seen their posts
- Impressions obtained: Number of views of a post (the same person can be exposed several times to the same publication)
Indicators of engagement:
- Number of reactions: likes, favourites, reposts, etc.
- Number of comments
- Number of shares
- Number of brand mentions
- Publication engagement rate: number of followers
Community growth indicators:
- Number of new subscribers earned over the campaign period
Web traffic indicators:
- Clicks generated by influencer posts
- New users
- Page views
- Session duration
- Bounce rate
Sales Indicators / Lead Generation:
- Number of conversions
- The share of your brand’s voice against your competitors
- Key message penetration
3. How to measure the ROI of your Influencer Marketing Campaigns
Track sales generated
It’s fairly easy to track sales generated from influencer campaigns. There are two main ways to track whether a sale has come from an influencer.
Using UTM tracking.
If you send your influencers links to your site to share, consider incorporating UTM trackers. Then follow the conversions generated from Google Analytics.
Provide promo codes to influencers. Followers can then use this code at the checkout to receive a discount, you’ll then be able to track how many sales have been made through these codes.
Remember to give different links or promo codes to each influencer, so you can track the individual performance of each influencer. This will also be important if you have agreed to a commission for each sale generated with the influencers.
Tracking purchase trends.
Another method of tracking sales that have been created off the back of your influencer marketing campaign is by looking at purchase trends to see if your campaign has generated sales peaks.
Why check this? It might be the case that a follower has seen an influencers post, but then organically searched for your brand or product, rather than use the UTM code.
Of course, not all influencer marketing campaigns aim to generate sales. How do we measure the ROI of these?
Compare to your own campaigns
If you prefer to rely on your own experiences, you can compare the performance of your influencer campaign to your other social media advertising campaigns.
For example, by comparing the cost per engagement, per click or lead of your paid campaigns to the performance and cost of your influence campaigns, you can estimate the return on investment of these.
Take into account the other benefits of influencer marketing
Influencer campaigns have other benefits that are important to consider when reviewing your campaigns.
This type of campaign allows you to win new content, the one created by influencers. You can re-use their posts on your site, social media campaigns, emails, etc. (provided you have agreed with the influencers beforehand). This is usually quality, authentic content, featuring personalities familiar to your audience.
Also, unlike social media campaigns, content creation is outsourced, usually supported by the influencers themselves, saving you time and money on your side.
4. Get the tools you need to measure your campaigns
To gather this data, you will need to equip yourself with the right tools.
Here are the tools needed to measure the indicators listed above:
Ideal (and free!) To track all the KPIs related to your websites like the traffic obtained and the conversions generated.
A spreadsheet (and a lot of patience)
If you want to manually track the performance of social media posts from your influencers, you can create a spreadsheet and record the number of engagements, comments, and endorsements received.
Impressions will not be visible publicly, so you will need to ask influencers to share them directly.
However, some indicators are very difficult and time consuming to measure manually, especially when working with multiple influencers at the same time.
An influencer marketing platform
A platform of influence like Meltwater does all the work for you, through collecting and measuring your different KPIs (Reach, Impressions, mentions, sentiment, etc.). All you have to do is analyse the results!
These platforms generally allow you to retrieve all content generated by influencers (even Instagram Stories, which is notoriously difficult to track!) and analyse the results in depth.
5. Create your campaign report
Creating a report is the best way to analyse your campaigns and make better decisions for your strategy. It’s also important to internally showcase your efforts and what your work brings to your business.
To evaluate your influence marketing work, two types of reports are possible:
A specific campaign report
This type of report allows you to analyse a specific campaign, product launch, brand event, or special promotion.
We focus here on the objectives of the campaign (sales, brand awareness, engagement), which we can choose to compare with other campaigns. The benefit of comparing to previous campaigns is you can realistically benchmark against previous work.
Over a time period (month, quarter, year)
This type of report is interesting if you work with influencers over a long run.
The report will be built around the objectives of this long-term campaign and will highlight the evolution over time of these different KPIs (month after month, quarter after quarter, etc.).
You can also incorporate a competitive benchmark to compare your influencer strategy with other players in your market.
The benefit of a time period report, as opposed to a campaign report, is that sometimes we won’t see all the results of a campaign until much later down the line.
What metrics to include in your report
- Detailed analysis of each influencer: number of posts, true reach, engagement rate
- Analyse specific posts by engagement, sales etc.
- Analyse audience reached: age, location, gender and interests
- Analysis of the mentions generated: key trends, sentiment, increase in mentions
- Comparison: to a past period, to a competitor, to a similar campaign
6. Learn for your next campaigns
Analysing your influencer campaigns should allow you to create an action plan to optimise your communications strategy. Here are some examples of lessons to be learned:
Effective content for your audience
Influencers in your industry know what kind of content will resonate with your audience. Pay special attention to the content they offer you as part of your campaign.
Once the campaign is over, identify the publications that have generated the most reactions, and get inspired for your own content strategy.
The most engaging influencers
By analysing the impact of each influencer during your campaign, you will be able to determine which ones were most effective.
You can then focus on these influencers and build long-term relationships with them.
Discovery of new ambassadors
If your campaign is effective, it will generate mentions and comments. Scan the profiles of people who have mentioned you, you may find your next ambassadors!
7. Final thoughts
When creating your reports, don’t forget to analyse a range of metrics. Keep influencer fraud in the back of your mind. This is where influencers fake followers & engagement.
“There are literally thousands of influencers who are making a full-time living out of creating the appearance of having a big audience when in several cases 95% of their engagement is fake,” Bartlett said. “In real terms, you’re paying $1,000 to get 1,000 people to act, but really if I only get 50 people to act I’m stealing $950.” says Social Chains CEO, Steve Bartlett.
Make sure you are blending a range of metrics based on your objectives to ensure accurate reporting.
Contrary to what one might think, it is quite possible (and simple) to estimate the impact and return on investment of influence marketing. The key is to focus on the important indicators for your business, and serve you this as a springboard for your next campaigns!