Calculating brand ROI
Brands and marketers are investing more and more in influencer marketing. In fact this year 48% of marketers are significantly increasing their influencer marketing budgets. So making sure that influencer campaigns are actually effective is quite a big deal.
Although influencer marketing is estimated to return as much as 11 times the amount that is invested over all other forms of digital marketing, an entire 69% of marketers find estimating return on investment (ROI) quite the challenge.
What is ROI
Influencer marketing ROI is what you get back in return from all the Influencers social media efforts.
The formula for calculating ROI has only two parts: ROI = (return – investment) / investment but the “return” element can mean different things to each brand. Return is highly dependent on the goal you set at the beginning of a campaign. That’s why first and foremost it’s important to define success for your brand.
Typically, with influencer marketing you aim to raise awareness for your brand, with a view to generate sales rather than pushing for immediate sales. That’s why the success of your campaign should be measured on two parameters, exposure and sales.
The scale of attention your brand has received since the campaign.The ROI for exposure is the number of new potential customers who become aware of your brand through the campaign.
Web Traffic- according to the Rise of Influencers Report, 79% of marketers choose web traffic as their most important metric. When it comes to web traffic, looking at the activity of those people referred by influencers, rather than the number of people who come through to your site, gives more meaningful metrics. You can track website actions in Google Analytics by setting up goals and event tracking.
Followers- the growth of your social media following, since the commence of the marketing campaign. It’s crucial to track and take note of your number of your followers before the campaign to calculate the number of followers you have gained following the campaign.You can track your new followers in Buffer.
Engagement- acts as an overall insight, into how users feel about your products. Taken from the total number of potential customers that have liked, commented, shared or clicked on content concerning your brand. You can easily estimate your ROI with the CPE (cost per engagement), with the simple formula of CPE = investment / Engagements
Now when you hear ROI you think revenue; the number of sales driven by the campaign. But, recognising whether or not, your sales are a direct result of the influencers from your campaign is the tricky part.
Custom links- the main way to track whether your sales are a direct result of your Instagram campaign is to create custom links for each creator you hire, and each of the platforms they are sharing content on. You can track your conversions from each link, on Google Analytics, this way determining which influencer brought in the most sales and on which platform.
Promo codes- one of the most fool proof ways of measuring the effectiveness of a campaign, is to give each influencer a promotional code specific to their name, and calculate how many of each are submitted. This works in favour of both, your brand as it’s especially relevant for impulse buys, but also for the influencer who will be offering something extra to their followers.
Isolated marketing- testing the effectiveness of influencer marketing for a product which is marketed only through an influencer is an easy way to track direct sales. This is a great way to compare the results with other marketing strategies though, It is quite unlikely that a product will be promoted solely by one source.
Reach, actions and reactions on social media happen within a number of seconds, so it’s important to keep on top of what’s happening as it’s happening. Find a form of measurement and commit to it, whether it’s engagement on content, sales driven from an influencer’s post or web traffic diverted from the influencers post to your site.
Get as close to real time as you can to collect data as fast as possible, this way you can make quick updates and changes, by scaling, retargeting and optimising.
- Scale- shift budgets towards an influencer or ask for more content if they’re bringing greater results
- Retarget- if a particular form of content or collaboration is doing well with an audience take it to a larger audience
- Optimise- quickly dump and get rid of a collaboration that isn’t going anywhere, tailor the content or find different influencers that have the tools to take your brand where you want it to.
It’s important to realise that any individual measurement of ROI is only a piece of its’ overall value, so measure in a multivariate way, rather than modelling infuencers in isolation. Influencer marketing is no different to any other marketing campaigns, see what works for your brand to either repeat it in the near future or come up with a new strategy. Whatever you do, just do it!
I’m head of Content at ZINE, where I use my expertise in fashion consumer psychology to empower brands and influencers in their marketing campaigns. I love to travel, bake as well as shopping online.