How do you measure the ROI of your influencer marketing?
Over a third of marketers struggle with this.
But don’t worry, we’ve got you covered. Here’s what you need to know and to do to determine the success of your influencer marketing campaigns.
Set a goal.
First things first, you need to know what you’re aiming for. Do you want more email addresses? More subscribers? How about increased engagement in the form of likes or shares?
Broadly speaking, we can break up the goals of influencer marketing into the following 4 categories:
Raising brand awareness. – This involves measuring how many individual pieces of content an influencer has produced as well as impressions (the number of times your content is displayed).
Generating leads. – This is where influencer marketing is used to help generate some type of conversion. Newsletter sign-ups or other opt-ins like signing up for a free trial or a quote are measurable stats that fall into this category.
Increasing sales. – If you want to keep track of how effective your influencer marketing is at improving direct sales, the best way to do this is to allocate each individual influencer a unique discount code that they can pass on to their followers as in the example below:
Boosting brand lift. – Brand lift refers to the level of positive interaction your campaign receives. Tracking brand lift involves closely monitoring your social media presence to see if your audience or engagement grass as a direct result of your influencer campaign.
Once you’ve decided on a specific goal, the next step is to make sure that you communicate exactly what it is that you want to achieve so that your influencer can do everything in their power to make it happen.
Gather data and make calculations.
The metrics you use to calculate your return on investment will differ depending on your goal.
Your return might be measured in cash, followers, subscribers or even engagement.
Calculating the cost of something like engagement might seem difficult, but it is entirely doable if you follow a simple formula like this one:
Whatever the case, the first thing you need to do is calculate your overall investment into the campaign. This can be a little tricky. You’ll need to take several variables into account when “costing”.
You should calculate labour costs for the time taken to research the influencer, put the campaign together, organise the campaign with the influencer and create the content as well as factoring in how much you paid them.
Don’t forget to factor in the total cost of creating any content used in the campaign. If you have provided a free sample, you will need to add that in as well.
Factor in any recurring expenses such as software subscriptions, for instance. If you’re running multiple campaigns you may want to assign a small percentage of such running costs to each influencer.
I’ll give you an example. Let’s say you are working with 8 different influencers over a single month. In this case, you would divide the total software costs for that month by 8 (the formula you choose for doing this part this isn’t as important as sticking to it).
Once you’ve nailed down all of your costs, you’re ready to start calculating your return.
Tracking KPI’s and calculating your return.
To do this second part of the calculation, you’ll need to pin down the KPI’s (Key Performance Indicators). If you’re running a direct response campaign, you might want to look at your average CPC, social media generated revenue, or subscriber derived revenue.
If you’re looking to calculate the ROI for brand awareness or visibility, then you should measure social impressions across all relevant social channels. Most social media platforms will provide access to this data.
If you want to pin down the number of referrals you are getting, try turning to Google. Google analytics can be used to track influencer campaigns by building custom reports to monitor visitors and links clicked.
Using this method you can gain valuable data relating to customer behaviour as well as tracking key metrics like conversions and revisits.
Calculating the number of followers you’ve received as a result of an influencer campaign is fairly straightforward. Just make sure to take an accurate count of both followers and likes across each platform before you launch.
Each platform has its own tool to help you track any growth in your following. Facebook’s looks like this:
Don’t discount subjective data.
Of course, if you really want to know how well your campaign is being received, one of the best and most reliable sources is your customers themselves.
While this type of data is highly subjective, it is also incredibly valuable, particularly in the early stages, where you might be able to use it to tweak your campaign.
It’s a good idea to keep a close eye on both your own social media feeds as well as your social influencers feed and get a feel for how well things are going.
Read the comments relating to your campaign carefully, is there a positive sentiment?
Calculate your return on investment.
Once you have added up all of your costs and calculated all of the “costs” and “profits” as outlined above, you are ready to do your final calculation in order to determine the exact return on your social media influencer campaign. The formula for this final calculation is below: