A world without cookies and the increasing importance of privacy have made achieving marketing success a big challenge. Due to the iOS privacy updates, no more third-party cookies, exorbitant rates of paid advertising, and other such developments in the privacy space have enabled a huge boom in influencer marketing.
Since ways to get closer to your customers are becoming restricted and pricey, brands must find relevant media and platforms which their consumers will frequently use and enjoy. The combination of first-party data and influencer marketing is going to stay for long.
Brand promotion and appropriate use of influencer marketing are prerequisites for successful social media campaigns. But we often forget one of the most important aspects of influencer marketing.
You need to control your budget and measure your ROI from these campaigns. With the limitation of tracking with influencer marketing, it can be a little challenging to calculate the ROI. That is why here we discuss a few ways to measure the ROI of influencer marketing. Take a look.
You can generate a unique affiliate link for your influencer. This will help you track your online sales via social media channels. Influencers are most likely to earn a commission from these kinds of sales. These links will also give you information regarding the number of clicks on the site and the number of sales generated with the average order size.
Social media channels like Instagram have introduced shopping post options which means the customers can directly buy products from the Instagram feed, which will shorten the user journey and give a boost to impulse buying.
One of the easiest and most versatile ROI trackers will be UTMs. You just have to add some structured parameters to a link. When any visitor will click on it and enter your website, your web traffic analysis tool Google Analytics, will process these. All kinds of influencer campaigns have a variety of parameters so that these website analysis tools will present the traffic source correspondingly.
Dedicated Landing Pages
Shortened links are perceived to be suspicious and hence, can spread mistrust and also lead to fewer clicks. A solution for this would be to use providers that enable you to use branded links. Another way would be to discard shortening completely and get it replaced with unique links on dedicated landing pages. This is an example of the structure you can use - https://acme.com/campaign/influencer1.
When a unique landing is assigned, every influencer campaign needs the introduction of a landing page generator. Detailed traffic analytics are offered by landing page software providers. These are integrated with Google Analytics. Hence, you can keep the campaign performance outcome under a compact report.
Some social media channels do not support adding links to the posts. What one can do is provide influencers with a unique discount code that they will share with their followers.
You can track these codes to understand how many transactions were contributed by the influencers. This can also be considered as the basis for commission given to the influencer.
Some companies simply pay a percentage of sales for the influencer. Sometimes, this can also be the basis for the fixed rate of sponsored content for future collaborations. No matter what the goal is, personalized discount codes can help you calculate the influencer ROI better.
Within a single influencer collaboration, but across several campaigns, you can generate different coupon codes for more than a single selected influencer. This approach can help you understand which idea works and which does not.
At this scale, having this sort of experimental capability in place is seriously treasured. You may also turn the coupons into unique links so that the discount is automatically applied to a user.
For instance, KEVIN_AT_SPRINGFEST_2018 can become yourcompany.com/deals/kevin_at_springfest_2018.
Incentives adjustment is not just about altering the discount value but also about the product or customer-specific or time-specific constraints in the deal. This offer leads to two benefits-
1) You can get a customized and attractive deal that will increase influencer campaign engagement as a whole and ensure better brand awareness.
2) It will keep your budget for marketing promotions under control because of the restrictions it has.
With its data-driven strategy and effectiveness, these are by far the most proven ways of ensuring successful influencer marketing. But you must keep in mind the more sophisticated rules you use, the more advanced and technological software you have to get for brand promotions.
If any campaign is based on customer engagement, you can request the influencer to direct the customers to your website directly. Then, you will be able to measure the traffic from a social media channel to your brand site. You can also calculate how your follower rates change and how it contributes to ROI. A good idea would be to create your own hashtag, which the influencer can also use and understand how popular it gets.
It also works when you host some interesting contests for your brands. When you know the total number of participants, you can calculate the measure of your gained engagement with your brand. You can also understand how this engagement fades away over time.
Measuring the number of times a post has been seen will not fetch you the right data; there is the issue of fake followers which can distort all the information. You can come to know about the traffic through the influencers on the social media channels via any software tracking tool.
You can also try to isolate the marketing activities for social media channels where you cannot share links to define the kind of engagement a particular channel can add. You can calculate the impact of any influencer campaign as the traffic that comes from these campaigns, and the same goes for the increase in the sales of the products.
Share Voice or Mentions
You can measure what people are saying about your brand and also about your competitors with the help of tools. However, this information can be irrelevant if you want to place yourself as a standalone brand as the results are more qualitative than quantitative.
Influencers can persuade what others say about your brand and how frequently they are mentioning your brand name. This can be useful information for measuring the ROIs of influencer campaigns.
You can also use the influencer's posts for sponsored ads. It might feel that you are overspending because you are already investing in influencer marketing, but the influencer posts can get more reach if it is sponsored.
Sometimes, influencers also offer free content that can be used across all channels. This will save a lot of money on a camera, models, makeup artists, studio rentals, travels, and so on. This saved cost can add to your ROI.
Earned Media Value or EMV
EMV or earned media value is the total social media exposure you can get from the influencer campaigns. You can place some monetary value on the sponsored campaigns by calculating EMV.
The total you are getting is a representation of the amount you would require to spend on social media to earn the same kind of engagement. There is no formula for calculating the EMV. But usually, digital marketing teams consider three metrics for this-
Average cost per engagement
Average cost per click
Average cost per impression
Influencers can be a part of single or double-sided referral programs. The influencer can use a personalized referral code to share with the followers without any cap on the number of followers. The referral software can count every customer that successfully uses the referral code. Based on the number of followers, you can decide on the fixed commission or some percentage of generated sales to be paid to the influencer. To increase the success of a campaign, you can make it a double-sided program where customers also get an incentive for making use of the influencer code.
If brand awareness of link building is your campaign goal for improving the domain authority and gaining trust, you can calculate the number of backlinks that lead to the sponsored content that the influencers put out. This kind of influencer campaign can be a wonderful idea for the B2B businesses that depend on collaborations with thought leaders in the given zone, who in turn create and share the content for your business.
How to Calculate the ROI
Now that you are aware of what the investment is and how the results will be, it can be easy to calculate the final ROI. For instance, if you are paying $5000 to an influencer which got you roughly $10,000 of profit approximately, either for sales due to an influencer or for the earned media value, then the ROI will be 200%.
The simple formula is Revenue/Cost x 100
Influencer marketing can do wonders for all brands. But just like all other marketing strategies, you need to first analyze and understand your brand goals to find what is suitable for you. You can experiment further and even learn from it if you are well planned with the tracking tools and your KPIs.