.png)
How can you measure your influencer marketing performance to ensure you are driving the best possible ROI? In the current economic times, return on investment is top of mind. On average, brands make $5.20 for every $1 spent on influencer marketing. The top 13% of businesses drive $20 or more in revenue for every $1 spent.
Despite the explosive growth of influencer marketing, only 70% of brands measure the return on investment.
Whether you’re getting started with your first influencer marketing campaign or if you’re one of the 30% not tracking ROI—here’s what you need to know to measure the success of your campaigns.
How to measure influencer marketing ROI?
Influencer marketing doesn’t have to be a black box. There are many ways to track the return on investment of your influencer campaigns and activities. Here are a few of the most effective ways.
1. Affiliate links
By using unique affiliate links for each influencer, brands can track the traffic and sales generated by each influencer's posts. This enables brands to attribute conversions and sales to each influencer and calculate the ROI.
2. UTMs
UTMs (Urchin Tracking Modules) are tags added to the end of URLs that allow brands to track the source and medium of traffic to their website. By adding UTMs to the links in an influencer's post, brands can track the traffic and conversions generated by that post.
3. Dedicated landing pages
By creating dedicated landing pages for each influencer, brands can track the traffic and conversions generated by each influencer's posts. This allows brands to measure the ROI of their influencer marketing campaign and identify which influencers are most effective at driving conversions and sales. Dedicated landing pages also allow brands to tailor their messaging and offers to the specific audience of each influencer, increasing the chances of conversions and sales.
4. Unique discount codes
If you give each influencer a unique discount code to share with their audience, you can track the sales generated by their posts. This makes it easy to attribute conversions and sales to each influencer, identify which influencers generate the most sales, and measure the overall ROI of your campaign. Unique discount codes also incentivize followers to make a purchase, increasing the likelihood of conversions and sales.
Calculating the ROI
First, you need to figure out how much you invested and how much revenue your campaign generated. Once you have that information, it’s simple to calculate the ROI. The formula is:
(Revenue/Cost) x 100
Example: If you paid the influencer $5000 which generated $10,000 in sales, then you are looking at an ROI of 200%.
Let’s explore what makes influencer marketing such a high-performing channel that drives more ROI than other tactics.
1. Cost-efficient traffic and conversions
Whatever your goal – traffic, orders, event registrations or newsletter signups – influencer marketing will usually enable you to meet your goals for less budget compared to running ads in your own brand name.
2. Brand awareness
No matter how awesome your brand is, it’s easier to gain awareness when someone else is singing your brand’s praises. Validation from a third-party is more authentic than your brand telling everybody how great you think you are.
3. Reach
Influencers extend the pool of users your brand engages with, putting you in touch with potential customers you might miss out on otherwise. Paid social campaigns are usually highly targeted and based on demographics like age, gender and location.
An influencer marketing campaign enables you to reach people who might not fall into your classic audience criteria but could still be interested in your brand if the content resonates with them.
4. Influencers as business partners
These days, influencers are more in control. Two-way partnerships between brands and influencers are getting more common. The brands give the influencers creative control over the product design to make it cater to their audience the best and profite from them knowing their followers the best.
Beyond ROI, how do you calculate the performance of influencer marketing?
This will depend on your campaign goals. In recent years, brands have shifted their influencer marketing strategy from focusing on awareness to generating tangible business results.
There are many possible KPIs you can track, including:
- Engagement (can be views, clicks) & Impressions
- Likes & Shares
- Followers
- Backlinks
- Sales (conversions)
- Referrals
For most brands, the most common KPI for influencer marketing success is conversions and sales and 42.3% believe that you should gauge a campaign by the conversions/sales that result.
33.5% think that measuring clicks and engagement makes the most sense while 24.2% are convinced that KPIs like views, impressions and reach should be evaluated
What about Earned Media Value?
While ROI is one of the most important KPIs, it’s not the only one. In recent years, Earned Media Value has become more popular in the field of influencer marketing.
In fact, The Influencer Marketing Hub’s 2021 report shows that 80% of marketers use Earned Media Value to measure their influencer marketing campaigns.
The estimated media value helps marketers to evaluate the success of their influencer collaborations and compare the media value with other marketing activities.
Check out the free influencer calculator template from Storyclash to predict and calculate the estimated media value of your campaigns. Our spreadsheet makes it easy to calculate the earned media value for any collaboration or campaign, tweet or Instagram story, Facebook post or YouTube video.
What is a good ROI for influencer marketing?
This will depend on your brand and your goals. If you have already run campaigns in the past and have historical data to compare your results with, coming up with a benchmark is much easier.
Ultimately, there is no universal standard or official benchmark for all companies and industries to compare their results with.
That said, Influencer Marketing Hub reported that brands earn up to $18 in earned media value for every dollar spent on influencer marketing, with the average being closer to $5.78 per dollar spent.
Tips to drive higher ROI from influencer marketing
The New York Times reports that as the demand for influencers has risen, the costs of influencer marketing have also increased. With that in mind, it’s more important than ever to set clear goals and track the results of your influencer campaigns.
People trust recommendations from real people more than traditional advertising – that’s what makes influencer marketing so effective.
However, the majority of brands today have realized the power of influencer marketing, so competition is fierce and cutting through the digital noise can be tricky.
1. Set clear goals
Be clear on what you expect to achieve with your influencer marketing initiatives. For DTC brands, influencer marketing is often their strongest sales channel, so you will clearly be aiming to increase online sales.
For consumer brands, the emphasis might be more on improving brand awareness and perception, ensuring your brand is top-of-mind among your target audience.
2. Be an early adopter
The early bird gets the worm – and that’s also true of social media. New trends, formats and platforms can offer an extremely high return on investment because the competition is not as established yet.
If a brand collaborates with an influencer to publish a funny or cool video on TikTok, the algorithm might pick up on it and boost reach, making the content go viral.
This can result in a huge increase in sales, without much investment from the brand.
3. Reuse and repurpose your influencer content
Instead of relying on agency- or brand-created creative, try distributing high-performing influencer content across your paid and owned channels. Influencer content is already optimized for social, which makes it perfect for sharing across your own social accounts.
You can also share an influencer’s social media testimonial on your website, for example. Leveraging influencer content to build trust and credibility will save on costs of asset creation, thus increasing ROI.
Gina Tricot, a Swedish fashion brand, is doing exactly that. Read more about how they work their influencer marketing here.
4. Choose the right influencers
Influencers are make or break for your campaign. Look for creators whose audience aligns with your target customers and whose values reflect your brand. Storyclash enables you to use AI to find the perfect influencers for your brand based on the content they create. Learn more about our unique approach to influencer discovery here.
5. Develop a long-term relationship with influencers
A long-term partnership is more impactful than one-off collabs. If an influencer mentions your brand several times in different posts and stories, their audience receives more exposure to your brand and the endorsement seems more credible. Foster mutually-beneficial relationships with your influencers and treat them like the value partners they are.
Ready to get started?
Measuring ROI is an essential part of successful influencer marketing. Now, you should have a good understanding of how to track the results of your influencer marketing campaigns.
Feel free to check out Storyclash, the leading software for influencer marketing that makes discovering as well as tracking influencer activity and campaigns easy.