Influencer marketing is THE marketing strategy of the last few years. No wonder: In times of ad blockers, classic advertising is shown to fewer and fewer users. The offers from influencers, on the other hand, are not only perceived but also consumed in a targeted manner. In addition, the less promotional character, together with the relationship with the influencer himself, means that 92 percent of consumers trust influencer recommendations more than traditional advertising.
But as promising as it sounds, the young discipline lacks industry standards for measuring performance, and the cost-benefit ratio is often not very transparent. In the following, we, therefore, provide you with instructions for calculating the “Return On Investment” (ROI), with which you can convince the management and check the remuneration of influencers.
These steps will help you analyze the ROI of your influencer campaigns
1. Set goals
Goals are important for a well-thought-out approach because every marketing strategy needs a goal to work towards. With regard to influencer marketing, a wide variety of goals can be targeted: Do you want to increase sales, reach, or visibility of your brand, e.g. your presence on social media? Or should more interested parties subscribe to the newsletter?
The relevant key figure for calculating the ROI varies depending on the specific goal. This can be a monetary key figure for sales, the number of followers must be measured for the reach and, for example, likes and mentions can be used to check visibility.
Three typical main goals for influencer campaigns are:
- Interaction Rate (Engagement)
All three goals build on each other and in a certain way reflect the buyer’s journey, which underlines their importance: Likes, comments, and shares, which show a high interaction rate, show that interested parties have become aware of the product or the brand. The next step takes them to a landing page or the company’s website, where they can get more information, by clicking on a link. If they are convinced of this, leave their contact details and convert them into leads.
2. Estimate investments
To find out whether a campaign is financially worthwhile, the investments involved must be transparent. In the case of influencer marketing, time should be mentioned in particular as a cost factor. For example, researching suitable influencers, voting, and content creation should be taken into account. But product samples that have to be made available to the influencers, as well as the costs for creating the respective contribution, for example, a high-quality video for YouTube, have to be taken into account.
Nevertheless, influencer marketing is usually cheaper than classic advertising, since the actual placement in the medium (in this case social media) is free, in contrast to outdoor advertising, TV spots, or a newspaper advertisement.
3. Determine key figures
After the concrete goals have been set, it must now be determined which key figures are to be linked to their achievement. These key figures are always channel-specific and some can be more easily linked to the specific campaign than others – a problem that is discussed in more detail in point 4. Here are some typical metrics in influencer marketing:
- Reach: The number of followers of an influencer is especially important for their selection. Overall, the reach as a key figure for the ROI is only partially meaningful, as it cannot be equated with impressions: Not every follower sees every post, while individual posts can also be seen by non-followers who may not even know the influencer before .
- Impressions: How many users see a particular post?
- Interaction / engagement: How many likes / shares / comments are there on a post? Just like impressions, this metric is limited to social media.
- Landing page traffic
- Won newsletter subscribers
- Brand mentions : Also known as the “Voice of Share”. The main aim is to determine how many users are talking about a campaign on social media.
- Increase in your own number of followers
- Sales in the online shop
- Number of app downloads
4. Track metrics
In principle, subscriber numbers, app downloads, and sales are easy to measure. However, it is difficult to determine which proportions are actually directly attributable to a particular influencer campaign. Various tracking methods help to analyze this as precisely as possible:
- Cost per social media interaction (cost per engagement, CPE): Less a tracking method and more a model for offsetting costs and benefits. Here the investment is not related to clicks or views (similar to a CPM price), but to the active engagement with a content element.
- Tracked links: If an influencer embeds such a link in their post, video description or bio, it is clear which visitors to a particular page (e.g. online shop, landing page, etc.) came directly via the influencer are. The same is also possible, for example, for newsletter registrations.
- Landing page specially designed for this campaign, which is referred to in the relevant posts.
- Determine correlations: Temporal relationships in particular provide a clear indication of the effects of an influencer campaign. For example, if the visibility of relevant keywords increases during the campaign or if your own number of followers increases shortly after the publication of a post, it can be assumed that the developments can be attributed to the campaign.
- Number of link clicks
- Time spent on YouTube videos: This value is more meaningful than the pure number of clicks. If a user stays on a video for a certain period of time, it can be assumed that he likes it and interests him, which, for example, benefits brand awareness and reputation.
- Number of readers on a blog
- Promo codes: If your own promo codes for purchases in the online shop are created specifically for an influencer campaign, it is possible to clearly evaluate which buyers were generated by the influencer.
- Use of hashtags : A hashtag specially established for the campaign makes it much easier to evaluate the mention on social media, as posts can be specifically filtered according to said hashtag.
Influencer marketing: planning, preparation and flexibility are the be-all and end-all
Thanks to the appropriate tools and methods, it is much easier to evaluate the ROI than many marketers think. However, to do this, it is imperative that the corresponding key figures be defined and continuously tracked.
And it’s worth it: after all, thanks to the comparatively low costs, influencer marketing is a lucrative part of the marketing mix – provided that the influencer fits the brand well and presents the product in a credible manner.
It is also important that a trial-and-error approach is accepted: influencer marketing means experimenting and being flexible and not stopping on the first failure. The profession is too new and changing too much for it to be realistic to expect immediate success.
If you take these tips to heart, you can at best expect an ROI that is eleven times higher than with other campaigns.