MEASURING YOUR INFLUENCER MARKETING ROI
After initially working through strategy and identification and then putting your program into place, there comes the time to take stock. Measuring the return is essential and, to some degree, the most important part of the process. Without proving the benefits and returns on spend, the worth of influencer marketing budget and other decisions concerning proceeding with the influencer program can’t be finalized. It’s a harder argument to make. From another angle, without measuring the success of what you have already done, you’re unable to tighten the process. When you take into consideration what returns you have, and how your KPIs have been addressed, then you can settle into the Deming Cycle of adjusting what you’re doing to refine the processes and maximize your investment.
Make no mistake, even if you’re not paying influencers, it’s an investment in gifting product and/or time. Properly measuring the return of this investment is essential. But just how do you measure something as fluid as influencer marketing? As early as at least 2010, companies were looking at how to measure the return on social media. It might not be rocket science, but it does take effort to make a strategy. McKinsey & Company began talking about “word-of-mouth equity” as a way to measure the sales impact of a brand message that has been multiplied by word-of-mouth messaging.1 When extended and extrapolated, this clearly covers influencer marketing. This gauge of word-of-mouth equity is not how you will measure your influencer return, but it does provide a basis for understanding how to measure something that seems unmeasurable.
Essentially “word-of-mouth equity” breaks down into several points to consider.
Volume × Impact = Word-of-Mouth Equity
Volume of message—Simply stated, the more messages you put out, the more return you get.
Impact of message—This point is broken into several factors. The first is the network—where is the influencer talking, on a scale of being an open network or not? More important is whether or not the speaker is trusted. The second: Who is talking and what influence do they hold? Third, what is the message content and relevance to your brand? And the final factor is the trigger. If the influencer is talking about their experience with the product, the personal investment in recounting their experience is more powerful than something based on hearsay.
When these factors are weighted and pulled into a formula like the one above, we begin to understand how to measure the weight of social media messages. A small number of messages on point from someone who is trusted and influential can deliver a far higher return than a year’s worth of disconnected messages to a larger audience.
The same 2010 McKinsey Quarterly article explained that in Germany, Apple’s iPhone had a share of 10 percent of word-of-mouth volume. The leading smartphone brand boasted a share of 15 percent. Apple was able to leverage messages about the iPhone launching in other countries ahead of its German launch, leading to 30 percent more word-of-mouth equity than the leader. Of this share, three times more influential voices were recommending the iPhone. When these factors were considered, it became clear sales attributed to this word of mouth and social media messaging outstripped the traditional advertising six times over.
There will be ROI on your influencer marketing investment, it’s just a question of how much and how you measure it. After working with influencers to spread your message, you will get more impressions, more views, and more followers. Some of these data points might not be important to you. In that case, there’s no reason to measure that point. Initially, you have to decide what is important to you and how you plan to measure it, then consider how much it will cost.
There are a few studies regarding the ROI of influencer marketing that are often quoted in influencer marketing circles that give some indication that influencer marketing ROI has been proven for some time.
Burst Media published a study based on forty-eight influencer marketing programs showing that for every dollar spent on influencer marketing, you’ll earn an average $6.85 back.2 The results varied greatly depending on industry. Food and apparel earned more than $10 per dollar spent, but home and garden earned less than a $1 return. When you consider how much it costs to simply advertise on paid media, your requirements and goals, and what you want to achieve with influencer marketing, then you will have a different gauge and the ROI will vary.
A similar study by Tomoson showed that, when they surveyed over 150 influencers, the average return was $6.50, with 70 percent earning at least $2 on a dollar spent.3 The top 13 percent earned over $20 for each dollar spent. That sort of return is impressive in any kind of scale.
A more recent study shows slightly lower yet still solid ROI for influencer marketing. In the Influencer Marketing Hub Influencer Marketing Benchmark Report for 2019, NeoReach examined more than 2,000 influencer campaigns and calculated that earned media value averaged 5.2 times per $1 spent.
WHAT DO YOU MEASURE?
Earlier in this book, I discussed the importance of deciding what exactly you wanted to achieve with your influencer marketing program. I stressed that understanding what your goals are and how they relate to your key performance indicators is essential to understanding how to measure influencer marketing success. Each KPI has its own element to measure.
Increase brand awareness |
Share of voice, impressions and views |
Amplify reach |
Impressions and views |
Grow engagement |
Clicks, comments, shares; impressions and views |
Grow community |
Follower growth |
Expand email database |
New subscribers |
Increase website traffic |
Referred traffic |
Expand product awareness |
Mentions, reviews, etc. |
Generate leads or sales |
UTM tracking |
SEO |
Back links and ranking |
Ad spend ROI |
Cost per mention, per click, etc. |
Understanding and knowing what your exact goal is and defining what metric to best measure that is key to measuring the success of your influencer program. It also gives you insights into how to refine the next round of influencer engagement to trim the fat and push your goals further.
Essentially, revenue is the most important metric. Although clicks and shares were favored by some marketers who responded in the Tomoson study, and sometimes influencer programs are started with a key goal being increased brand awareness, 56 percent of marketers said that revenue is the king indicator. If there’s an increase in sales and income, then it’s hard to argue that the program isn’t working. This is the point where the other KPIs will help you refine your processes. Mediakix’s “Influencer Marketing 2019 Industry Benchmarks” showed that increasing brand awareness and reaching new audiences were more frequent overarching goals of a brand’s influencer marketing strategy than generating sales. In all of these categories and metrics, it’s a measure of brand awareness and engagement.
If you prefer to measure brand awareness metrics such as impressions, likes, comments, views, and shares, you should already have the specific values of these formulated from your paid social campaign data or from your internally developed earned media valuation. Sideqik’s Defining Success in Influencer Marketing will provide you some industry guidelines for these values if you don’t have your own internal guidelines.
MEASURING YOUR SUCCESS
After deciding what your measuring stick will be, you must source data. A good number of the tools mentioned in chapter 13 cover many of the data points or source the data for you. Beyond these, it’s possible to measure from your internal website analytics program such as Google Analytics as well as the data provided by each social network. These can all provide a great deal of information to identify the return. There is also public social data and some that we can access without difficulty. Reported data from analytics tools or from issuing a unique URL to each influencer in order to measure click-through is also an invaluable source of data.
Instagram and its parent company Facebook are taking this one step further by allowing brands direct analysis to metrics coming from sponsored posts published by authorized influencers as well as giving brands the ability to boost influencer content to the brand’s fans. This provides the additional convenience of collecting data that would otherwise be tedious to collate, difficult to access, or cumbersome to collate into one dashboard. It also makes the data transparent, trustworthy, and accurate.
Tools and platforms often collect this information, but it’s collated in ways that are manipulated or sorted differently, giving you a different perspective and various analyses depending on your needs. This is what makes these tools and platforms disparate in the first place.
Using tools like this will show you a lot of data accurately and quickly. There are limitations if you’re measuring ROI by different standards, but tools show you what you need to know, depending on your focus.
WHAT IS THE RETURN?
The return on your investment comes down to three simple questions:
What was your objective?
Did you achieve it?
At what cost?
With those three questions answered, you’ll have a solid view of where you stand. At this point it’s also worth looking at how the influencer program performed compared to other marketing channels. Did it outperform the traditional sales approach, like the German iPhone example? Did it complement other channels? Were there other benefits, such as bringing new followers and increasing brand awareness or positive sentiment? These are all benefits that engaging with influencer marketing can bring your brand, but knowing which one is key to your campaign is essential to deciding where to focus. We take a macro perspective to calculate ROI because there is no single tool that will cover everything. Not every tool will look at indicators for all KPIs or objectives. What helps, however, is that the tools are powerful enough to measure what you want to know.
One other important note about ROI is that it is always relative. If influencer marketing is becoming a mainstream part of the marketing mix, its KPIs should not just be measured but also compared against all other types of marketing within your organization. How did your influencer campaigns compare to your paid media? What benefits did you derive from your influencer program compared to traditional marketing initiatives? Asking these questions and probing for answers will often give you the ammunition you need to either expand your program or illuminate other areas to focus on optimizing. SocialPubli’s “recent Influencer Marketing Report” surveyed 150 digital marketing professionals who said that influencer marketing ROI for them was higher than that of SEO, paid social, paid search, or email marketing.
Another intangible benefit that is often overlooked is content. In Mediakix’s “recent Influencer Marketing Industry Benchmarks” survey of marketers, 82 percent said that they reuse influencer-generated content for social media or other advertising channels, with 31 percent of them saying they do so “all the time.” Content creation, and the unique and personal approach influencers bring to this, is a strong draw for brands. Pixlee (https://www.pixlee.com/) is an example of a tool that focuses on getting access to content. Engaging influencers and user-generated content is the cornerstone of that particular marketplace. Many big brands are very keen on user-generated content at the moment. It brings a voice of authenticity and a different angle that a brand just can’t use when talking about their own products. A brand is impersonal, no matter what strategy they use, and user-generated content gets around these impersonal hurdles. Reusing influencer content is a big incentive for brands who are looking at stepping into engaging with influencers, and it’s certainly worth ensuring you have that permission to use their content in the formal agreement with influencers. Brands spend a lot of money on creating content, so this is another way working with influencers not only increases revenue but might aid in decreasing marketing expenses.
After you’ve measured your ROI, maximizing that return is next. Go back to the Deming Circle in chapter 10 and revisit the steps: Plan → Do → Check → Act. You can see what you might change or do differently. Perhaps you want to try another campaign type. Perhaps you want to try alternate media, engaging through stories or videos instead of solely through photos. Perhaps trying a different network will change your returns—engaging in YouTube, or moving away from Twitter if you want to engage with more visual media. Changing influencers or prioritizing certain influencers is also a great way to revise your program.
Your return on investment and campaign strengths and weaknesses are clear. It’s now possible to learn from your program, maximizing future results. While this stage is about trimming the fat and making your process more efficient, influencer marketing is also always about experimenting and seeing what works. There is no hard and fast rule, and different brands with different influencers will see different results. However, with a strategy in hand and KPIs to measure, you’re well on your way to being able to ascertain your return from influencer marketing spend and hopefully, utilizing the Deming Circle, always improving upon that return in kaizen, or continuous improvement, fashion.