Influencers have taken the marketing industry by storm. And by now, most marketers are familiar with planning and executing influencer marketing campaigns. But even if they can successfully execute their campaigns, they still face the challenge of measuring their campaign ROI.
In fact, Econsultancy found that this is the second biggest challenge faced by marketers. But a Linqia study found that measuring campaign ROI is the biggest influencer marketing challenge for 78% of marketers. These stats clearly point out that marketers still have a hard time keeping track of the results driven by influencers for their campaigns.
This can pose a problem as marketers may be unsure if their investments in influencers are worth it. Even if you see a lot of sales driven from the campaign, you may not be getting enough compared to all of the money you spend on influencers. If your tracking and calculation tactics aren’t effective enough, you may be wasting your resources on the wrong channels.
Marketers may also have trouble keeping track of whether all the influencers contributed equally to deliver those results. So you may be unable to determine if and when you should make adjustments to your campaign to cut down on spending and increase their earnings.
In this post, you’ll learn how to tackle these issues through proper planning and calculation tactics. You’ll understand how to calculate the ROI of posts created by influencers, which is essential for preventing or identifying unnecessary or ineffective spending.
If you plan right, you’ll have a much easier time tracking the results of your influencer marketing campaign. Here’s what you need to do to ensure that you can easily track the ROI of influencers’ posts:
#1: Set Your Budget
Have a clear understanding of how much you can afford to spend for the entire campaign. This will ensure that you choose influencers you can afford and don’t spend more than you have.
#2: Clearly Understand Each Influencer’s Worth
You should also have a clear understanding of how much each influencer is worth. In other words, you need to determine how much they earn on average for each post. This is necessary because you’ll be able to have some idea of how much you should offer the influencer. This will help you avoid overspending on any influencer.
The Instagram Money Calculator from Influencer Marketing Hub is a handy tool to help you with this. You just need to enter the influencer’s username and the tool will give you all the crucial stats. As you can see in the screenshot below, the tool calculates the average earnings the influencer is likely to receive for each post in addition to highlighting some crucial stats.
#3: Set Your Goal
Define what success looks like to you. What kind of results do you expect from the campaign? If you wish to drive more sales, for example, you can set a goal to drive X% higher conversions within one month.
Or if you wish to raise brand awareness, you can set a goal to reach X number of people within a month and generate X number of social media impressions within that time. But make sure the goal is realistic, keeping your budget in mind.
#4: Define Your Key Performance Indicators
Now that you have a clear idea of what to expect out of the campaign, you can define all the key performance indicators (KPIs) that you will use for measuring an influencer’s performance. Here are some KPIs you can use for tracking the results driven by your influencers:
- Social Media Engagement – Some marketers measure the effectiveness of their campaigns by the number of engagements generated through influencer posts. This would be the number of likes, comments, and shares the posts are able to generate. The previously-cited Linqia study found that engagement is the most commonly-used metric for measuring performance.
- Tracking Clicks – Marketers may also want to measure the amount of traffic resulting from an influencer’s post. In this case, they’ll be measuring the number of clicks coming from a particular post or a particular influencer.
Ideally, you should provide each influential blogger with a tracking pixel that will make it easier for you to track their individual performance. In case of social media influencers, you can provide them with a unique URL that will help in tracking the number of clicks driven by each influencer.
Blue Apron assigns unique URLs to influencers like Jack Douglass, a YouTuber with 3.2 million subscribers.
- Coupon Codes – You can also provide a unique discount code or promotion code to each influencer so they can share it with their followers. You will then be able to track all the sales that implemented the coupon codes, which makes it easier to understand how much conversion each influencer is able to drive.
Enviroklenz uses this tactic and provides a unique discount code to influencers like Natalie Kay of Sustainably Chic.
How To Calculate ROI
Once you’re done measuring the performance of your influencers, you can start calculating the ROI of each influencer. Although measuring the overall ROI is also crucial, individual ROI can help you understand whether all the influencers are worth investing in. And despite all the important metrics, your actual ROI will be determined by the actual revenues driven by the influencers.
Let’s say you pay an influencer $75 for one Instagram post featuring your product. You also provide them with a unique discount code for 10% off, which their followers can use on their purchases. During the first week of the campaign, you discover that 20 coupon codes have been redeemed, resulting in sales worth $2000.
You’ve spent only $75 on the influencer so you subtract that amount from the total sales, which gives you $1,925. Now if you want to calculate the percentage of returns from your initial investment of $75, you just use the traditional percentage calculation method. This means:
(1,925/75) x 100 = 2,566.7%
So within just one week, the influencer has managed to deliver an ROI of more than 2,000%.
Easier ROI Tracking With Influencer Marketing Tools
This manual ROI calculation can be a bit time-consuming. If you don’t have the time or resources to dedicate, you can always count on influencer marketing tools. Although most tools are focused on influencer discovery, you can find multipurpose tools that will also help you track your campaign performance and ROI.
NeoReach and Assembly are excellent options as they help you keep track of your performance across various metrics and automatically calculate your overall ROI. These tools also help you identify the top-performing influencers so you can further leverage them.
You now have a clear understanding of what to do to calculate the ROI of your influencer marketing campaign. The only thing left to do is start planning your campaign, and implementing these ideas into your strategy for better ROI calculation.
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* Adapted lead image: Public Domain, pixabay.com via getstencil.com