Marketers have singled out measuring ROI as one of the biggest challenges they have with influencer marketing, but there are ways it can be done.
Influencer marketing return on investment – the holy grail for brands wanting to justify increasing spend – is yet to achieve clear definition within this still relatively new sector of digital marketing.
Influencer Intelligence’s latest report, Influencer Marketing 2020, reveals 84% of marketers feel proving the ROI of influencer marketing is a challenge. As investment continues to rise, it’s inevitable that stakeholder demand for budget justification will increase in kind.
This is completely understandable but like with any conversation on return, to understand the real value of a campaign, a tailored approach needs to be taken. Not only on a brand-by-brand basis, but also specific to each campaign, to truly measure the impact and assess longevity.
It is these necessities that mean traditional advertising metrics and values, which are often applied to attribute worth to influencer marketing, are not fit for purpose. Applying this type of data ultimately involves trying to make a new and versatile marketing technique fit into an outdated and rigidly formulaic metric. This, coupled with the fact that rates themselves are unreliable, means brands using advertising values are failing to measure the true effect of their campaigns.
The real appeal of influencer marketing and the reason for its rapid rise in adoption among brands, is its authenticity and the number of ways in which campaigns can be created and utilised to fulfil a variety of projects with varying objectives.
This breadth of opportunity within influencer marketing is huge for brands; across sales and lead generation, brand awareness, amplification and alignment, as well as content creation – ensuring that it is impractical to solely measure success based on one measurement across the board. Instead, any form of benchmarking ROI needs to be individually assigned, with value attributed on a ‘cost per’ basis, whether that is cost per follower, cost per engagement, cost per lead and so on.
Measuring sales is certainly the most direct objective in terms of gauging value and is the closest benchmark that can be attributed to specific monetary ROI. Whether the journey between brand campaign and purchase is measured via tools such as conversion pixels or trackable links, it’s important to be mindful that this is not complete and comprehensive. Value can only really be captured for a fraction of those purchases, where a customer buys as a direct reaction from the influencer campaign, and so consideration needs to be taken for those who purchase later or are influenced by the campaign but don’t purchase through the campaign link.
As investment continues to rise, it’s inevitable that stakeholder demand for budget justification will increase in kind.
Although less sophisticated, discount codes attributed to an influencer can often provide a closer representation of direct ROI, as the customer is likely to be incentivised to link to the campaign via a discount achieved through use of a code. Similarly, a brand collaboration with an influencer can clearly be benchmarked against non-influencer-inspired products to measure success.
Lead generation objectives, when executed fully, can also provide valuable and visible evidence on the effect that an influencer campaign can bring to a brand. Whether collecting data through email sign-ups or data-capture forms, these can be combined with metrics provided by UTM parameters and codes to understand how many sets of data have come directly from the effort of an influencer.
It is also very important to remember that sales aren’t the only way that influencer marketing is utilised and often objectives are more holistic; concerned with a brand’s long-term goals rather than just short-term sales and is where the true sweet spot of influencer marketing lies. These goals, such as brand awareness and perception, or even content collaboration, are less straightforward to prove ROI, but should be set as bespoke KPIs and a cost per achievement on completion.
In terms of brand awareness, measuring growth in traffic, visibility or social followers over a set period of time is an easy and manageable metric to gauge success, and similarly engagement can be used to benchmark whether influencers are delivering bang for their buck. To attribute direct results within conversation, it’s useful to attribute a hashtag to each campaign as a clear way of isolating content that is performing as part of this activation.
Once an objective and quantity are agreed within a marketing team it is very possible to ensure that a cost per achievement is captured and quantified. Whichever metric is used, it needs to be one that is right for the individual brand and at a cost which the individual team is comfortable with for a campaign.