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How You Can Measure Influencer Marketing ROI and Improve Success Rates

How You Can Measure Influencer Marketing ROI and Improve Success Rates

You’ve seen them. You’ve heard them. You’ve watched them in action.

Appearing on a screen nearest to you, social media influencers (or influencers for short) may push the latest hair dye, promote a new set of wheels, or introduce a ‘revolutionary’ exercise regime.

From Instagrammers to YouTubers, bloggers to podcasters, influencers are more than just pretty or handsome faces. Augmenting the marketing and PR efforts of companies around the world, they provide an alternative way to expand your brand reach and engagement.

But how can you work with influencers in a data-driven way? What can you do to penetrate the veneer of hype and hope that sometimes surround influencer marketing?

In this article, I’ll be sharing 5 things you can do to improve the Return on Investment (ROI) that you can achieve through influencer marketing.

These insights are drawn from over a decade of experience as a blogger and content marketing agency owner.

#1 Start with Your Influencer Campaign Goals

First, you need to ask yourself two questions:

  • What is my specific goal for engaging influencers in this campaign?
  • What is a realistic target for me to attain this goal?

In thinking about your goals, you need to consider how influencers could assist you with either of the following:

  • Boost Brand Awareness: Can they help you to reach new brand audiences? You can measure success via indicators like reach, impressions, followers/fans, or video views.
  • Improve Consideration: Can influencers help you to grow your online engagements? This can be tracked through clicks, comments, likes, shares, and visits to your website.
  • Increase Conversions: Are influencers able to directly help you with sign-ups, product purchases, or event attendances?
  • Grow Customer Loyalty: Can the hiring of influencers help you to strengthen loyalty with your existing community?

In thinking about this, it is useful to map your goals against your marketing funnel and consider the influencer content types that would best meet each stage.

#2 Establish Your Influencer Marketing Budget

Next, you need to consider how much funds you should set aside for your influencer marketing efforts. This can be tricky if you haven’t engaged influencers in the past or have historical figures to work with.

There are several ways to work out your budget for hiring influencers:

  1. Benchmark with Online Ads: How much would you ordinarily spend to reach an audience of 10,000? What is your cost per video view like? Multiply that amount by the estimated reach (eg. no of followers or estimated video views) that the influencer can offer.
  2. Benchmark with Offline Advertising: If you’ve been doing offline advertising on TV, radio or newspapers, you can use an approximate number for the total reach (eg circulation, or viewers) as an indicator for how much you should spend.
  3. Project from Estimated ROI: The other way to estimate how much you should spend on influencer marketing is to calculate your eventual ROI from the campaign. From the estimated profits that you can secure from the campaign, you can then work backwards on what a reasonable amount should be spent on influencers.

#3 Define Success Metrics

After you’ve estimated the budgets that you’ll spend on hiring influencers, your next goal is to determine the targets (or Key Performance Indicators, ie KPIs) from your campaign.

The best types of targets are SMART (Specific, Measurable, Attainable, Realistic and Timebound).

In thinking about this, consider mapping your desired performance against your goals as well as unit Cost Per Result when calculating influencer marketing ROI estimates. For example:

  • If your goal is brand awareness, your target could be to achieve a reach of 100,000 new fans/followers. If we assume that your budget is $1000 for hiring influencers, your targeted cost per reach would then be $1,000/ 100,000 = $0.01 Cost Per Reach.
  • If your goal is better engagement, your target could be to achieve a total engagement of 4,000 likes, comments and shares. Assuming the same budget ($1,000), your targeted cost per engagement would then be $1,000/4,000 = $0.25 Cost Per Engagement.

Note that working with influencers may not be exactly equivalent to directly advertising on Google Ads, Facebook, Instagram or LinkedIn. As influencers often have higher engagement rates with their fans than ordinary brands, you may need to pay a slight premium to reach their fans.

#4 Track Your Influencer Campaigns

So you’ve established your influencer marketing goals and determined what performance metrics you’d like your hired influencers to help you achieve. Your next step involves tracking and reporting on their individual campaign performance.

There are several ways to do so here.

Self-Reporting by Influencers

Get the influencers you’ve hired to report his or her numbers to you. This could be the number of fans reached, the number of page views on your campaign blog posts, or the number of clicks to your landing page.

Use UTM Parameters on Google URL Builder and Google Analytics

For campaigns that have a Conversion element, it may be useful to set up your Google Campaign URL Builder to monitor specific clicks to your campaign landing page driven by hired influencers. Here’s how:

  1. Visit Google Campaign URL builder and key in your influencer’s characteristics into the UTM parameters.

   2. Copy and paste the URL below. This will contain the keywords that you can use to track your campaign.

   3. Use a shortening tool like Bitly.com to create a short-form URL. If possible, choose a unique URL for this.

  4. Give the URL Link to the influencer, and get him or her to promote it through the relevant channels.

   5. Once traffic starts to come in, you can monitor them on Google Analytics by clicking Acquisition > Campaign > All Campaigns as shown below.

Image courtesy of Orbit Media

What’s good about this approach is that you can set up unique URLs for each influencer. This allows you to track the exact number of users that they’ve driven to your website on Google Analytics.

Use a Unique Coupon Code

You can also use different unique promo codes to track your influencer marketing campaigns. These coupon codes have to be linked to a specific discount, promotion or freebie that the influencer’s audiences can redeem either online or offline.

Track with Campaign Hashtags

Alternatively, you can track your influencer campaign outcomes with specific hashtags. This could be useful for brand awareness campaigns where you’d like to monitor the distribution of your hashtags by different influencers.

Use an Influencer Insights and Analytics Tool

If you find the above suggestions too mind-boggling, consider using a tool like the Post Image Analyser from TheRightFit, an influencer marketing platform.

Powered by AI, machine learning algorithms allow you to gain in-depth insights for your influencer posts either pre-campaign or post-campaign, allowing you to generate reports like the following:

  • Follower growth over time
  • Engagement rate of influencer
  • Gender breakdown
  • Country and City breakdown
  • Engagement metrics (eg likes, comments, shares and engagement rates)
  • Sentiment of post (positive, neutral or negative)
  • Sentiment of comments
  • Safety
  • Hashtags and keywords on post
  • And more…

#5 Tabulate and Measure ROI

Finally, you should tabulate and measure the ROI that you’ve achieved through your influencer marketing campaigns.

To compute your ROI from an influencer marketing campaign, here’s what you can do:

  1. List your influencer marketing goal, ie Awareness, Consideration or Conversion.
  2. Track the performance that you’ve achieved in terms of KPIs, eg total no of people reached, total no of video views, total no of sign-ups etc. If you work with multiple influencers, you can use the techniques above to easily monitor the performance due to each influencer.
  3. Estimate the cost of your campaign, eg fees paid to influencers, manhours used to manage influencers, agency fees to manage influencers etc.
  4. Estimate the Cost Per Result for your campaign. This can be your Cost Per Reach, Cost Per Video View, Cost Per Sign-up, or even Cost Per Sale.
  5. If your campaign involves generating actual product sales, you can compute your Campaign ROI by using the following formula:

Total Influencer Campaign ROI: [(Revenue – Cost)/ Cost] X 100

This can be expressed as a percentage and can be assigned to individual influencers so long as you can attribute that sale to him or her.

Conclusion

Like any digital marketing effort, the success of your influencer marketing campaign should be determined by both qualitative and quantitative metrics.

Following the five steps above, you’ll be better able to manage, measure and track the outcomes of your influencer marketing campaigns. Doing so helps you improve your marketing ROI over time and eliminates the need to adopt “spray and pray” methods of working with influencers.

Founder of the content marketing agency Cooler Insights, Walter Lim has almost 28 years of leadership experience in content & social media, PR, marketing strategy, and industry development. In 5 years, he and his associates helped 57 companies to improve their online marketing efforts and equipped over 2,200 professionals with critical skills in digital marketing.

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