An Ultimate Guide: Influencer Marketing ROI
How can you assess the effectiveness of your influencer marketing to make sure you are generating the highest ROI? Return on investment is a major concern in the current economic climate. Brands typically profit $5.20 for every dollar they spend on influencer marketing. For every dollar spent, the top 13% of companies generate $20 or more in revenue.
Here’s what you need to know to assess the performance of your projects, whether you’re just getting started with your first influencer marketing campaign or if you’re one of the 30% not measuring ROI.
How to quantify influencer marketing ROI?
Influencer marketing need not be a mystery. You can monitor the ROI of your influencer campaigns and activities in a variety of ways. Here are some of the best strategies.
Brands may track the traffic and sales produced by each influencer’s posts by employing specific affiliate links for each influencer. This makes it possible for brands to determine the ROI and attribute conversions and sales to certain influencers.
UTMs (Urchin Tracking Modules) are tags that are appended to URLs to enable businesses to track the source and channel of website traffic. Brands may measure the traffic and conversions brought about by an influencer post by adding UTMs to the links in that post.
Exclusive landing pages
Brands may track the traffic and conversions produced by each influencer’s posts by designing specific landing pages for each influencer. This enables businesses to gauge the success of their influencer marketing initiatives and pinpoint the influencers who are most successful in generating leads and sales. The likelihood of conversions and sales is increased by the ability for marketers to customise their messaging and offers to the particular audience of each influencer.
special discount rates
You can monitor the sales brought in by each influencer’s postings if you provide them with a special discount code to share with their audiences. This makes it simple to calculate the overall ROI of your campaign, discover which influencers drive the most sales, and attribute conversions and purchases to each influencer. The possibility of conversions and sales increases when followers are given special discount codes to use while making purchases.
Calculating the ROI
You must first calculate your investment and the money your campaign brought in. Calculating the ROI is simple once you have that information. The equation is:
100 times (Revenue/Cost)
As an illustration, if you paid the influencer $5000 and they in turn earned $10,000 in sales, your return on investment would be 200%.
What makes influencer marketing such a powerful tool that generates higher returns on investment than other strategies
1. Cost-efficient traffic and conversions
Influencer marketing will typically help you reach your objectives for less money than running advertisements under your own brand name, regardless of what your aim is—traffic, orders, event registrations, or newsletter signups.
2. Brand recognition
No matter how great your brand is, it’s always simpler to generate awareness when someone else does. A third party’s validation is more genuine than your brand bragging about how terrific you are.
Influencers widen the user base your brand interacts with, connecting you to new clients you would otherwise miss. Paid social media advertisements are typically very targeted and based on factors like region, gender, and age.
You can connect with people through an influencer marketing campaign who might not fit your traditional audience profile but might be interested in your company if the content speaks to them.
4. Partners in business who are influencers
Influencers have greater power now than ever before. Influencer and brand partnerships that go both ways are becoming increasingly prevalent. To better cater to their audience and benefit from their intimate knowledge of their fans, marketers give influencers creative authority over the product design.
Advice on increasing the ROI of influencer marketing
According to The New York Times, influencer marketing prices have gone up along with the rise in demand for influencers. In light of this, it’s more crucial than ever to establish specific objectives and monitor the success of your influencer marketing efforts.
Set specific objectives
Be specific about the goals you have for your influencer marketing campaigns. Since influencer marketing is frequently the strongest sales channel for DTC firms, it is obvious that your goal is to boost online sales.
For consumer brands, the focus may be more on enhancing brand recognition and perception to keep your brand at the forefront of your target market’s mind.
Become a pioneer
The saying “early bird gets the worm” also applies to social media. The return on investment for new trends, formats, and platforms can be very high because the competition is still relatively new.
If a brand works with an influencer to post a humorous or interesting video on TikTok, the algorithm may notice it and increase reach, causing the content to become popular.
Without much investment on the part of the brand, this might lead to a significant rise in sales.
Use your influencer material again and again
Try spreading high-performing influencer content across your paid and owned channels rather than depending solely on agency- or brand-created material. Since influencer content has already been social media optimised, posting it on your own social networks is simple and effective.
You could, for instance, post a social media endorsement from an influencer on your website. Utilising influencer content to establish credibility and trust will reduce the cost of creating assets, increasing ROI.
Select the appropriate influencers
Your campaign’s influencers can make or ruin it. Find creators whose beliefs are consistent with your brand and whose audience is similar to your target market. With Storyclash, you can utilise AI to identify influencers that are ideal for your brand based on the content they produce.
A long-term cooperation has greater influence than sporadic collaborations. Your brand will be more visible to their audience and appear more respectable if an influencer mentions it multiple times in various posts and stories.