Influencer marketing has taken the marketing world by storm. Last year, brands dedicated 80% of their marketing budgets to it, and they plan to increase the percentage going forward.
Clearly, influencer marketing has become the go-to strategy for most smart marketers.
However, 78% of marketers admitted in a Linqia survey that, despite their growing faith in influencers, measuring influencer marketing ROI remains their top challenge.
If you too find it hard to justify your influencer marketing spend to management, this post is for you. I’m going to explain the step-by-step process of tracking influencer marketing ROI.
Let’s get started.
Influencer Marketing ROI: A 5-Step Process to Measure It
While the success of your influencer marketing campaigns is not completely in your hands, the evaluation of its ROI is. And, believe me, measuring influencer marketing ROI is not as hard as it sounds. All you need are some tools and some process knowledge. To make your task easier, I’ve explained both below:
Step 1: Set Your Campaign Goals
To get the ball rolling, determine the goals and objectives of your influencer marketing campaigns. They will govern all aspects of your campaigns, including your influencer selection, strategies, budget, and resources.
If you are new to influencer marketing or to goal setting, you can get inspiration from the common goals of experienced marketers below:
Image via Statista
As you can see, influencer marketing is most effective when used to boost brand awareness and reach new audiences. However, it has also become a powerful brand advocacy tool since it fosters customer loyalty in a big way.
Want a pro tip?
To get the most out of your campaigns, focus on one or two goals at a time. If you are too ambitious, you may end up confusing your influencers about how they should proceed. This will take a toll on your campaign performance and ROI.
Step 2: Define Campaign KPIs
In step 1, you defined broad goals for your campaign. Next, you need to go granular and define your goal as measurable KPIs and metrics.
Your metrics should be:
- Follow attainable benchmarks. If you try to achieve unrealistic benchmarks, your campaigns are bound to fail.
- Be time-bound: Set a realistic timeline for goal achievement. For example, if your goal is to improve brand awareness, you should track your impressions, clicks, and brand mentions for four weeks after the campaign’s launch.
If you’re unclear about the metrics to track, take a cue from the marketers surveyed by Linqia. According to 90% of the respondents, engagement is the best metric to track, followed by clicks (59%), impressions (54%), and conversions (54%).
Step 3: Determine Metrics for Individual Influencers
To get the best return on your investment, you need to track the performance of each influencer working on your campaign. This way, you can identify your best-performing influencers and focus your efforts on them.
To this end, set goals for individual influencers. They should be aligned with your overall campaign goals.
For instance, if your main objective is to drive website traffic, you should be clear about how much minimum traffic each influencer will contribute within a set timeframe. After you onboard a new influencer, check your traffic for spikes and dips. This way, you can assess the influencer’s efficacy.
Step 4: Choose the Right Influencer Marketing Platform
Instead of manually tracking your campaign and influencer ROI, opt for automated tools like NeoReach and Grin. Using powerful analytics, these influencer marketing tools can compare the performance of different influencers and generate reports for narrow timeframes. This leaves you with ample free time for more cognitive tasks like strategy planning.
Platforms like NeoReach can calculate your ROI in real-time. Plus, it can provide you with data such as cost-per-impression and cost-per-engagement. You can also drill down into the ROI of each influencer-generated post to refine your content strategy.
Image via NeoReach
Grin, on the other hand, offers an exhaustive list of KPIs to monitor, such as conversions, revenue, video views, earned media value, and impressions. It breaks down your overall campaign ROI based on the same KPIs so that you get a panoramic view of how your campaigns fared.
Image via Grin
Step 5: Measure Your Influencer Marketing ROI
To measure each influencer’s performance, you can use:
- Custom URLs: You can create unique URLs for your influencers and track the traffic generated by their social media content and blog posts. In the URLs, you can append parameters that you want to track.
- Unique discount coupon codes: If direct sales are your main goal, you can create custom discount codes for your influencers to share with their fans and followers. This is also useful if you pay influencers an affiliate commission.
It’s advisable to have a dry run of campaigns using a sample set of influencers. All through your campaign, keep an eye on each influencer’s returns. You will get a fairly good idea about which influencers to retain and which to replace.
Go Ahead, Track Your Influencer Marketing ROI
If you’ve jumped on the influencer marketing bandwagon, there’s no reason to slow down. With the ROI-assessment strategy outlined above, you can put a number on your returns and secure buy-in from your management for future campaigns.
Do you face any other challenges while working with influencers? Feel free to share them in the comments below. I’ll be glad to provide advice, hacks, and tools to help you out.