While most marketers only focus on metrics like sales, revenue, and average order value (AOV), the ROI of influencer marketing goes beyond these numbers.
So, how do you measure the ROI of your influencer marketing campaigns?
In this article, I’ll show you just that. I’ll tell you about the metrics you should track and monitor, the types of ROI you should consider, and the tools that can make the job easier.
Read on to discover the best way to ensure your campaigns are on track and optimize them for the best results.
- Influencer marketing ROI = (Revenue/Cost) x 100
- But you should also focus on the qualitative data along with quantitative gains to evaluate the actual ROI of your influencer campaigns.
- This includes considering factors such as:
- Brand positioning and brand sentiment
- Engagements like comments and website visits
- Conversions like scheduled demos, free tool signups, and newsletter signups
- Earned media value (EMV)
- User-generated content (UGC)
- Use tools like BuzzGuru to track these metrics and optimize your campaigns accordingly for higher ROI.
What is Influencer Marketing ROI?
Influencer marketing ROI refers to the returns you get on investing in influencer collaborations and campaigns.
For most marketers and brands, the formula for calculating their influencer marketing ROI is simple.
Influencer Marketing ROI = (Revenue/Cost) x 100
However, evaluating the ROI of your influencer marketing campaigns should involve delving into qualitative data along with these quantitative gains.
It goes beyond sales numbers. It also includes the brand awareness built, number of impressions, engagement levels, the boost in your brand positioning in the minds of your potential customers, and more.
Why Do You Need to Measure Influencer Marketing ROI?
The industry is expected to grow to $21.1 billion in 2023, which speaks of its popularity and efficacy.
Influencer marketing is undoubtedly a powerful tool that can help you reach new customers, increase brand awareness, and boost sales. However, it can be expensive, so it's important to measure your campaign performance to ensure that you're getting a return on your investment.
Here are some of the reasons why you need to measure your influencer marketing ROI:
- To track the effectiveness of your campaigns. By measuring your campaign ROI, you can see which influencers are driving the most traffic and sales, and identify campaign strategies that are not performing well.
- To make better decisions about future campaigns. By using tracked data, you can see which types of influencers are most effective for your brand, what types of content resonate with your audience, and what kind of budget you need to allocate for influencer marketing.
- To justify your spending to stakeholders or clients. Showing them data of your managed campaign will help them see where exactly they are in their business goals.
What Metrics Can You Track When Measuring Influencer Marketing ROI?
Let’s take a look at some of the most common yet crucial metrics you can track when measuring the success of your influencer marketing campaigns. However, the metrics you select should be relevant to your campaign goals.
This is the number of likes, comments, and shares that your influencer's posts receive. A high engagement rate is a good indicator that your target audience is interested in your content.
Engagement rate = (Total number of engagements/Number of followers) x 100
Here, engagements refer to likes, comments, shares, saves, and other user interactions with the influencer’s post.
2. Website traffic
This is the number of people who visit your website after clicking on an influencer's link. A spike in website traffic after launching an influencer campaign suggests that your campaign is driving traffic to your site.
You can also use UTM link tracking to ensure that the generated traffic is a result of your campaign. Tools like BuzzGuru let you create and track analytics for custom short links.
This refers to the number of products or services you were able to sell as a result of your influencer campaign. Along with the number of sales, you should also track:
- Revenue generated
- Average order value (AOV)
- Customer lifetime value (CLV)
Many brands use influencer-specific affiliate codes to track the sales driven by a particular influencer. This is the best way to measure your campaign ROI and track your influencer’s performance.
4. Brand awareness
This is the number of people who become aware of your brand after seeing an influencer's post. You can see these results in the form of:
- New social media followers
- Increased branded search volume
- Better brand positioning and positive brand sentiment
- New social media mentions
- Increased website traffic
5. Conversion rate
This is the percentage of people who took a desired action after seeing an influencer’s post. These actions may include:
- Signing up for your email list
- Making a purchase
- Scheduling a demo
- Renewing their subscription
6. User-generated content (UGC)
This refers to the number of conversations about your brand across online and offline channels.
- Customer reviews
- Word-of-mouth recommendations
- Photos of people using your products
You can ask influencers to encourage people to use your branded hashtag when they post about your brand. This will help you track all UGC in one place.
By tracking these metrics, you can get a clear picture of the ROI of your influencer marketing campaigns. It can also help you make better decisions about your future campaigns and allocate your marketing budget more effectively.
How Do You Calculate the ROI of Influencer Marketing?
Influencer marketing has great potential for most brands. But like any marketing strategy, it needs to undergo analysis and understanding of your goals to accurately calculate the ROI on your influencer marketing spends.
So, let’s start with setting a clear goal.
1. Set Clear Goals and Objectives
The biggest mistake marketers make is not knowing what they want to achieve through their influencer campaigns.
Before you start any campaign, set clear goals and objectives. Ask yourself whether you want to increase your brand awareness, drive more website traffic, or boost product sales.
Once you know what you want to achieve, you can choose the right metrics to track your campaign performance.
2. Track the Metrics Most Relevant to Your Goals
There are a number of metrics that you can track and use to measure influencer marketing ROI (as we discussed in the section above).
However, the influencer campaign ROI metrics will vary depending on your specific goals and objectives.
For example, if your campaign goal is to improve brand awareness and desirability, you can’t calculate your influencer marketing ROI in terms of sales or revenue.
The metrics you track in this case would have to be:
- Brand sentiment
Here’s an example of how the fashion brand, H&M reached 12 million consumers by creating only four sponsored videos in collaboration with lesser-known celebrity influencers.
Had they calculated the ROI of their influencer campaign by the number of sales, the campaign would have been a failure. So, it’s important that your key performance indicators (KPIs) align with your campaign goals.
3. Determine the Strategies That Work Best for Your Campaign Goals
Similarly, the strategies you use for influencer marketing have to align with your campaign goals.
For example, hosting Live sessions with an influential industry expert may bring better results (ROI) than hosting a 6-month free trial giveaway of your SaaS tool.
Whereas, hosting a product giveaway might work well for generating sales or new orders (ROI) for a fashion or beauty brand.
When measuring the ROI of influencer marketing, you should consider the results generated from different strategies. Allocate your budget to the ones that are driving actions relevant to your campaign and business goals.
4. Evaluate Your Influencer Campaign Cost
When we talk about how to measure influencer marketing ROI, we also need to calculate the total cost of running the campaign effectively.
When evaluating your influencer marketing cost, consider the amount of money you spend on the following:
- Cash – Most influencers and creators charge monetary compensation for sponsored posts and activity. Here’s how much an influencer may cost.
- Free products – Creators with smaller followings agree to work for sample products and free gifts from brands. These freebies are a part of your campaign cost.
- Commission – You can also choose to pay a fixed commission for every sale an influencer’s followers make as a result of the promotion.
- Team – Include the wages of your marketing team members responsible for the campaign.
- Tools – Consider the subscription cost of the influencer marketing tools you use for influencer discovery, campaign management, and performance tracking.
5. Analyze the Returns on Your Influencer Marketing Investment
Once you’ve got the data (discussed above), it’s time to analyze:
- Were you able to meet your campaign goals?
- How much of your marketing budget did you spend?
- Are you satisfied with the KPIs you decided on, at the beginning of the campaign?
- Did all influencers deliver satisfactory results?
These questions will lead you to measure the ROI of your campaign and identify what worked well and what you could do better for your future campaigns!
Pro tip: It takes time to see results from influencer marketing. Don't expect to see ROI results overnight. Be patient and track your results consistently to see how well your campaigns perform.
3 Best Tools That Can Help Analyze Your Influencer Marketing ROI
There are a lot of powerful tools out there that can help you plan, manage, and track the performance of your influencer marketing campaigns. You don’t need to extract or analyze the data manually.
Let me show you how to measure the ROI of your campaigns with these three tools.
BuzzGuru Influencer Analytics is an all-in-one influencer marketing app that provides you with an overview of your influencer marketing campaign cost and ROI.
You can track and see data related to metrics like:
- The average number of views
- Cost per thousand views (impressions) or cost per mile (CPM)
- The number of clicks
- The number of registrations
- Total campaign spending or total cost of the campaign
- Cost per registration (CPR)
- Cost per click (CPC)
- Click-through rate (CTR)
- Conversion rate (CR)
And the best part?
You can segregate the data by influencers, which means that you can analyze the performance of each partner influencer and see who brings the most value for the money invested in their collaboration.
You can form long-term partnerships with your top-performing influencers or allocate more of your budget to them.
BuzzGuru also lets you view the demographics of the audience engaged with your campaign, helping you ensure you spend your influencer marketing budget with the right crowd.
Upfluence provides you with detailed metric reports about your influencer campaign performance and ROI, including:
- The number of social views
- Your estimated earned media value (EMV)
- Best posting times
- Demographics of the audience engaged
You can also use it to track the performance of each of your influencers to identify your top performers. Get a clear overview of which influencer brought you:
- Maximum number of clicks
- Maximum referral traffic
- Maximum number of views
- The best click-through rate (CTR)
- Highest engagement
You can calculate how much you spent on each collaboration and the results they delivered in terms of clicks, sales, revenue, user engagement, and brand building.
NeoReach helps you calculate the ROI of influencer marketing by tracking metrics like:
- Cost per mile (CPM)
- Cost per engagement (CPE)
- The number of engagements
- The number of impressions
- The cost of the campaign
You can also see the performance of specific influencers and sponsored posts.
It also provides analytics about the demographics of the audience that engaged.
The Best Practices to Optimize Your Influencer Marketing ROI
Optimizing your influencer marketing ROI is a continuous process. You learn as you go but here are a few tips that can help you achieve a higher ROI for your campaigns:
1. Choose the Right Influencers
The influencers you choose to collaborate with can either make or break your campaign ROI. When picking influencers, look beyond their follower count and popularity.
Vet them based on factors like:
- Engagement rate – Is their audience engaged? Do they influence their followers’ buying decisions?
- Audience demographics – Are they similar to the demographics of your ideal customer?
- Brand affinity – Do they have the same values as your brand? If you sell sustainable clothes, do they promote the idea of sustainability and eco-friendliness?
You can get access to this social media analytics data from your influencer marketing platform/app dashboard.
Remember, influencers who are relevant to your brand and target consumers will deliver a higher ROI than those who are just popular but not relevant.
2. Use a Performance-Based Pay Model
While most influencers charge a fixed monetary compensation when promoting your products and services, encourage partnerships on a performance-based payout.
You can decide on a lower fixed payout and an additional 20% bonus for driving a certain number of clicks or sales.
This helps ensure you spend most of your marketing budget on influencers who deliver results (higher ROI).
3. Use Data to Make Key Decisions
Constantly track your influencer campaign data and optimize your strategy on the go.
For example, if the first three posts of an influencer don’t deliver the desired results, stop that partnership right away.
Instead, shift the remaining budget to an influencer who’s driving you good results in terms of website traffic, clicks, scheduled demos, or sales.
1. What is a good ROI on influencer marketing?
2. How profitable is influencer marketing?
The profitability of influencer marketing can vary depending on several factors: your industry, the type of influencers you partner with, and the goals of your campaign.
However, on average you can expect 6.5x returns on your influencer marketing spending.
3. What is the average RoAS for influencer marketing?
The average RoAS (return on ad spend) for influencer marketing is 2:1.