How to Measure Your Influencer Marketing ROI   

You have to learn how to measure your influencer marketing ROI to make sure you’re investing marketing dollars with the right influencers.

Photo by Maddi Bazzocco on Unsplash

People on all social media love to see content created by influencers. Logically businesses want to collaborate with influencers to sell products or services. 

There are many ways to optimize marketing strategy, but influencer marketing is one of the greatest to level up your business.

Influencer marketing employs content creators to increase traffic, improve brand awareness, and serve your brand’s message to the target audience. 

It doesn’t matter your business model; when investing in digital marketing and influencers, you need to sit down, take some time and calculate your ROI.

In this article, we will show you how to measure your influencer marketing ROI.

What is the purpose of influencer marketing?

Influencer marketing is a targeted type of advertising that develops relationships with influencers to reach out to their audiences. 

This marketing method may range from sending free products to content creators to more formalized agreements, where you pay influencers to create a post about your brand. 

Hybrid agreements also become very popular when influencers earn profits based on affiliate programs.

How effective is influencer marketing?

Setting clear campaign goals before engaging with influencers leads to better ROI and better relationships with them. According to research, advertisers most often measure the achieved reach, raised brand awareness, and the number of direct or indirect sales when hiring influencers.

As the popularity of influencer marketing grew, so did the budget. According to the survey, 60% of advertisers increased their budget for influencers last year. Around 90% of marketers claim influencer marketing ROI is better than other marketing channels.

These trends confirm that influencers can give good results and that advertisers are willing to invest their money in this form of promotion.

Especially if you are taking advantage of influencer marketing to grow your e-commerce business, you can propel sales to an unexpected level. 

Types of influencers and how much they cost

Mega Influencers

Mega influencers are those who have the highest number of followers and make the most money. 

These influencers should have at least 500,000 to a million followers. In 2021, these influencers were typically making around $10,000 per post on Instagram. 

Macro Influencers

Macro influencers belong to the middle of the different levels of influencers, although their audience is typically on the larger side. They are well-known on social media, but they are not big-time celebrities like mega influencers.

Micro-Influencers

Micro-influencers got a smaller number of followers, but they are known for having more personal pages. They usually go for a more specific niche of followers. A micro-influencer could be your solution if you plan to work with an influencer who impacts a particular community.

Micro-influencers make between $100 and $500 per Instagram post.

Which type of influencer would be the right choice for you? 

It is nice to have the resources to engage a “big name,” but you will likely achieve a much higher ROI by carefully selecting one or more micro-influencers relevant to your target group.

Before making any decision, you might want to find out how famous your brand is. Gain insights into what your audience thinks of your brand by building brand awareness surveys. Using a survey tool avoids the common problem of people not being truthful when answering questions in person.

How can influencers help you boost your ROI

• More conversions and leads: When influencers talk about your business, they send their followers a message that you are a valuable brand. This brings more people to your website and allows you to nurture those leads into sales.

• Increased brand awareness: People become aware of your brand when influencers put you in front of a new audience. This means you will get better prospects and more qualified traffic.

• More credibility: Since followers already trust the influencers, they get their audience to trust you too. 

By publishing relevant content, influencers reach an audience with their videos, blogs, and social media posts that you will hardly be able to reach on your own. Influencers perfectly know how to attract people – for example, a professional video has a greater chance of engaging the target audience than an unedited alternative. 

Influencers know how to use video editing tips or tips for Instagram influencers to create the most compelling content people will react to.

Influencer marketing isn’t just a great marketing tool for e-commerce. Different types of companies can benefit from it, including SaaS and subscription businesses.

How to measure influencer marketing ROI

Influencer campaigns often mean selecting one or more influencers and running online contests or giveaways accompanied by instant results – likes, followers, website visits, or even purchases.

However, only a few days after the end of the campaign, everything returns to normal – nobody talks about the brand anymore, and it remains only to calculate whether the campaign was profitable at all.

One of the main problems with influencer marketing is measuring how much sales or traffic comes from the influencer. There are several ways to measure return over investment from influencers.

Set your goals

If you want to see whether an influencer is helping your sales, you will have to set goals. You need to know what your goal is before you ask for help from an influencer. You may set goals such as:

• Increase sales by $3,000 a month
• Increase Facebook or Instagram followers by 20%
• Expose 1,000 consumers to your product

Provide promo codes

When working with an influencer, you can give them a promo code. They can use it and put it on blogs, videos, or whatever medium they use. 

When followers engage with the influencers, they can use this code on your website.

Every time they use the code, you will know they came from the influencer.

Use tracking pixels

Tracking pixels make it easy for you to see where your traffic is coming from. Influencers put it on their website, and when someone from their page ends up visiting yours, the tracking pixel helps you see where they came from.

How to calculate Social Media ROI

Social media ROI is the net gain that a campaign on social media yields. 

You can use a simple formula and calculate it:

Social media ROI = (Revenue – Investment)/ Investment

The social media ROI depends on the KPIs (key performance indicators) or the identified goals.

But it is not that simple. 

You need to calculate all the expenses incurred on the campaign from the very start to finish. We are talking about labor costs, money spent on ads, influencers, or even tool subscriptions. 

Then, you should deduct the investment from the revenue, and the last step – divide the difference by your investment to get your social media ROI.

Conclusion

There is no doubt whether influencer marketing is here to stay. Although there were some missteps inside the influencer community and businesses are tightening their budgets cause of the pandemic, understanding how to measure your influencer marketing ROI will ensure that you put your money in the right places.