Influencer marketing was declared “dead” or “dying” in headlines at the end of 2019. They said that customers were becoming tired of sponsored postings and that tracking the return on investment (ROI) for ecommerce companies was too complex.
We’re here to tell you that these headlines are completely false. Influencer marketing isn’t just alive and thriving; it’s expected to grow at unprecedented rates in the future.
According to the State of Influencer Marketing Benchmark Report for 2021, the sector is expected to grow by $13.8 billion in the following year.
“Influencer marketing is evolving to become smarter and more measurable,” says Nick Veneris, marketing manager at Refersion, an affiliate and influencer marketing platform that helps marketers build and track partnerships with bloggers and social media influencers. Refersion’s sales increased by roughly 82 percent year over year, from $238 million to $423 million in the previous year.
Despite the increasing relevance of influencer marketing, just 67 percent of firms track their influencer programmes’ return on investment (ROI).
Whether you’re planning your first influencer marketing campaign or you’re one of the 33% of marketers that don’t measure ROI because they don’t know how, here’s what you need to know to get started.
- Understand your goals
Is it your intention to raise brand awareness? How do you grow your audience? Or to boost sales?
The most common blunder made by brands is not knowing what they want to achieve and then getting an unexpected result. Begin with a specific objective in mind, then figure out how you’ll track your progress.
- Determine KPIs
Make sure you have the proper tools in place to measure the KPIs effectively.
The KPIs you’ll need to track to ensure your campaign’s success will be determined by your goal. Tracking visits and impressions, for example, will outweigh tracking income if you want to develop brand recognition.
If your goal is to generate leads, the quantity of new email subscribers is the best metric to use.
- Pick a platform and a strategy
Consider this: If your aim was hard sales, you wouldn’t hold a flash sale to attract email subscribers, and you wouldn’t focus on getting people to follow you on social media.
Influencer campaigns are no different—they could take the shape of competitions or giveaways, a discount or promo code, or a takeover of an account—but they should be tailored to your objectives.
Similarly, the location of the campaign is important, as different social media platforms have varied degrees of interaction and analytics tools for assessing and calculating ROI.
- Evaluate your expense
The “I” in ROI comes into play here. How much money do you intend to put into the campaign? Any influencer or agency fees, production costs, or analytics software fees should all be included in your budget. It’s also worth thinking about if you want to put more money into the campaign.
One of the most common blunders made by ecommerce retailers is failing to invest in content that is performing well organically.
Here are some KPIs which you can keep in your mind to evaluate the ROI of your brand.
- Revenue and Conversions
Many influencer marketing strategies start with the purpose of increasing total sales or conversions. You can track sales by giving influencers a unique promo code or custom URL, which you can track in the Shopify dashboard.
While tracking sales made through affiliate links or promo codes is important, keep in mind that there are a number of variables at play (see below), and the path to purchase may be less direct than if a consumer came to your site for the first time.
- Page Views and Impressions
Conversions or sales are the most prevalent metric marketers use to gauge the effectiveness of an influencer marketing campaign, according to the Influencer Marketing Hub 2021 poll. While these measurable results are crucial, they aren’t the only data to evaluate, especially if you’re launching a new brand, store, or product.
“For new launches, we find that impressions are the best indicator of ROI, since we want to introduce the new product or service to the widest targeted audience possible,” says Garcia. “More eyes on content means more opportunities to engage, new followers, and potential new customers.”
- Engagement on Social Media posts.
This might include, among other things, the number of new Instagram followers, YouTube subscribers, email newsletter subscribers, or Facebook likes. You may track this using a CRM that maintains track of where the lead came from, allowing you to figure out what traffic source sent them to your site.
- Earned Media Value
Tracking earned media value (EMV)—which can be measured through page views, daily unique visitors, likes, shares, and comments on social media posts—will give you a dollar amount for the value of the impressions your influencers have created.
- New Followers / Subscribers
This might be the amount of new Instagram followers, YouTube subscribers, email newsletter subscribers, or Facebook likes, among other things. You may track this by using a CRM that keeps track of where the lead came from, which can help you figure out what traffic source brought them to your site.
Backlinks can help you boost your site’s performance and rating by increasing SEO and content reach. Typically, these are developed through guest posting or paid content on other websites.
Calculate the number of hyperlinks your site had before the marketing campaign, then compare it to the amount once the campaign is over.
Working with an influencer, an app partner, or a marketing agency can help you save time and money on influencer marketing initiatives. Technologies and agencies with established ties with influencers can assist you in securing reduced fees, identifying content creators who are the perfect fit for your objectives, and developing data-driven campaigns based on solid analytics.
However, according to Influencer Marketing Hub’s 2020 study, you can earn up to $18 in earned media value for dollars spent on influencer marketing, with the average being closer to $5.78 per dollar invested.
Finally, there is no single standard or industry-wide metric for calculating the return on investment from an influencer marketing campaign.