Measuring return on investment on influencer marketing
How to effectively measure an influencer’s ROI would have to be one of the most commonly discussed topics we have at our agency, as well as at PR and marketing panel discussions around the country, writes Renae Smith.
It’s only natural that brands want to justify the amount that they spend on influencers and yet, despite how prevalent influencer marketing is, the Influencer Marketing 2020 report by Influencer Intelligence reveals that 84 percent of marketers still feel that proving the ROI of an influencers is a challenge. Why?
Most people would agree that it’s because the way you measure the ROI on influencer marketing depends largely on your initial objective, and that objective varies dramatically from company to company. You must ask yourself, then, why are you using influencers in the first place?
While for a lot of brands it comes down to the sales, there may be a whole host of other benefits to influencer collaborations that you are also looking to gain, and those need to be measured alongside any increase in revenue.
The first thing to do when you’re considering your influencer marketing is to understand specifically what your end goal is. Is it sales? Is it visibility in the industry? Is it growing your own social pages? Is it a way to gain new content? Is it to heighten your company image? Is it a little bit of all of the above?
As there are so many reasons people use influencers, the first step is working out exactly what you want to achieve, and therefore, gaining a better understanding how you will be measuring the success of your collaboration or partnership.
Below, let’s look at the top four reasons people use influencers and how to best measure their success.
The majority of people who engage influences are looking to increase their sales.
Measuring sales linked to specific influencers is definitely the most direct way to gauge the value of the collaboration and this is usually done by providing the influencer with an affiliate link that can be traced for each referral they make to your site. But if sales are your only goal, it can be a little problematic when it comes to measurement.
Unfortunately, cookies for affiliate links usually expire after about a month, and when we consider that not all referred customers will make a purchase in a timely manner, we can see there is a flaw in this measurement for companies where customers may take longer to convert into a sale.
If tracking sales is essential to your measurement, using specific promo codes for specific influencers will allow you to accurately track how many of their followers go on to purchase. In saying that, while promo codes can be tracked for a lot longer than affiliate links, many companies prefer not to use influencers to continually advertise discounts, which can also make this option less appealing.
If you’re more interested in increasing traffic to your website, using Google Analytics to track where customers are being referred to your site can help find blogs, social sites or specific website that are sending the greatest number of customers your way.
For more specific behaviours, you can attempt to track the effectiveness of an influencer by aiming to increase newsletter signups or completed data capture forms, combining those with specific metrics or questions that can be linked to specific influencers.
Enhanced visibility and reputation
Some companies just want their brand to be seen by more of the right kind of people and they believe that an influencer is the right person to help them achieve that goal.
Before getting started down this route, it’s essential to understand whether or not the influencer you select actually holds influence.
Always check their audience demographic and their engagement statistics. Ask an influencer to send you the original screen grabs of their social statistics or google analytics screen, don’t allow them to simply tell you the stats they think you want to hear.
Once you start collaborating, audit the results daily. Are the right kind of people coming to you or does the influencer lack any real influence?
In the never-ending social media feed that is business in 2019, the demand for high quality content is bigger than ever. Often, influencers can create content that is high quality and a lot cheaper than a professional photo session.
When influencers share their images on social media, this not only gives you extra content to re-post, but also offers a third-party endorsement. A good way to increase the ROI on these collaborations is also to use this ‘lifestyle content’ for your e-newsletters.
Whatever you decide, the best way to measure your ROI is to work out what your specific goals are and then identify how well the collaboration with the influencer achieved that goal.
You might find that focusing on sales is not the best way to value an influencer partnership and, in fact, having high quality content that you can use is a much more effective way of increasing your customer engagement and sales.
You might also find that influencer marketing is not the right tool for your business. After all, just because everyone else is doing it, it doesn’t mean they’re doing it well.