Influencer marketing is the peak of modern day marketing. By leveraging earned media channels, you see a much higher return on investment then you would with traditional media buying alone. MediaKix estimates that the total ad spend in influencer marketing will balloon to $5 to $10 billion dollars in the next five years.
According to Influencer Marketing Hub, 84 percent of marketers judge influencer marketing to be effective. But here’s the thing, how are they judging that? Results in influencer marketing can feel ephemeral and hard to measure. Like any good marketing, you want metrics to show how well you’re plan is working. That’s why we’ve compiled these 4 ways to measure ROI in influencer marketing. Think of it as an easy cheat sheet.
Before we move on to cover ways to measure ROI in influencer marketing, let’s go back to marketing 101.
Marketing ROI is exactly what it sounds like: a way of measuring the return on investment from the amount a company spends on marketing. According to the Harvard Business Review, marketers need to track ROI for many reasons.
Justify Marketing Spending. ROI can help justify where a company’s dollars are going.
Decide Where to Spend. If you see where your dollars are working, it could be worth adding additional budget there.
Compare Marketing Efficiencies with Competitors and decided how you stack up and where you’re lacking
Hold Departments Accountable. It’s good to be able to measure how effective marketing is using the company’s budget.
At its most basic, marketing ROI is the benefit of marketing minus dollars spent on marketing. Basically
MROI=(Incremental financial value as a result of marketing — cost of marketing) / cost of marketing
The goal is to end up with a positive number, and ideally a high number at that.
Outside of the general marketing ROI number, you’ll want to know what led to that great average, this is why it’s important to have ways to measure ROI in influencer marketing.
Ways to measure ROI in influencer marketing
Option 1. Sales Lift
One of the obvious ways to measure ROI in influencer marketing is to identify the sales lift your influencer activity provided. You can do this either digitally, or in store.
Digitally, you can use handy tools to track where people are clicking. These could be UTM Codes, conversion tracking pixels provided by software platforms, social media, or Google analytic pixels. This technology lets whatever analytic software you use to know the exact path someone took to get to your checkout page. This way you’ll be able to appropriately link dollar value to the cost of an influencer’s post.
Offline, you can still study sales lift. An offline sales lift study is performed by a third-party that has access to shopper data, coupon redemption data, or loyalty purchase data and compares results between people who were exposed to influencer content and a control group that was not. If you’re looking for a partner to conduct an offline sales lift study, consider Neilsen Catalina Solutions or a competitor that is well versed in these types of studies.
Option 2. Brand Lift
Like many other marketing tactics, influencer marketing may also attribute to brand lift. While not as easy to measure as a simple ecommerce conversion, marketers have assembled a bevy of tools to measure brand lift over the years.
According to Marketing Land, brand marketers have been successfully measuring the impact of their brand advertising for years with a variety of post-exposure success metrics, such as awareness, brand affinity and likelihood to purchase.
These brand health metrics measure how influencer marketing influences how consumers’ attitudes, beliefs, and emotions change about a brand.
Essentially, brand lift is the increase in the achievement of the main marketing objectives of a brand advertising campaign.
After measuring how brand lift impacted any phase of the marketing funnel, you can go back to your basic ROI measurement formula and see how well your influencer marketing worked.
Option 3. Reduced Investment due to media savings
While it isn’t dollars earned, dollars saved are just as important when calculating ROI. One of the ways to measure ROI in influencer marketing is to know how much you are saving compared to traditional media channels.
If you’re a brand that regularly uses paid media, you can simply measure what you spend on media and calculate the average impressions and engagements you receive as a result. Then use those numbers to quantify your influencer marketing efforts.
As an example, French scooter company Peugeot earned 514% ROI when they engaged beauty fashion and lifestyle influencers ahead of a product launch in the Netherlands. That number was calculated taking the amount they spent on influencers compared to what if would have cost to acquire an equivalent number of engagements and impressions through a traditional media buy. If you want the whole story of how they did it, check out our case studies.
Option 4. Reduced Investment thanks to time saving
Influencer marketing isn’t easy. It isn’t quick. It isn’t simple. But it can be. When using automation tools and other influencer marketing software, you can often reduce the time and manpower it takes to launch a full-scale influencer marketing campaign.
Coca-Cola used Sideqik to generate nearly 600% ROI and to manage a large number of influencers over the course of a year. By using an influencer relationship management software platform, Coke was able to limit the time and effort it took to track the results of their fairly massive campaign.
Savings brought on by the need for fewer marketers to yield the same results will always produce a positive ROI.
In the headline, we promised you 4 ways to measure ROI in influencer marketing and more. So here’s the deal. We wrote the book on how to measure an influencer campaign. If you found any of these tips helpful, you may want to check out our free ebook, How to Define Success in Influencer Marketing.
I can promise you there are at least 5 more actionable tips for ways to measure ROI in influencer marketing in the book, as well as tips on setting the right goals and defining the right metrics.