We live in the age of influencer marketing where big and small brands leverage influencers to achieve their growth goals. Despite the popularity, measuring and analyzing influencer marketing remains a hard nut to crack.
Many brands and marketers rely on vanity metrics that don’t mirror an influencer marketing campaign’s true impact on revenue. Although tracking influencer marketing isn’t yet a seamless process, there are surefire tactics to establish the return on investment (ROI) from many kinds of influencer marketing campaigns.
This post will highlight the importance of tracking influencer marketing and show you how to go about it, step by step.
Overview
- Influence marketing has risen from the obscure and foreign concept it was a few years ago to a $13.8 billion industry in 2021. It spans all industries, from FMCG brands to SaaS brands.
- A whopping 92% of consumers in the U.S. trust influencers more than traditional advertisements. Marketers also say that content generated by influencers for brands has more positive feedback than content curated by the brand itself.
- 75% of marketers allocated a dedicated budget to influencer marketing in 2021.
- Only 67% of brands are concerned about influencer fraud.
All marketing efforts should be measured for accountability purposes. Tracking influencer marketing ROI will help you decide how much to budget for your next influencer marketing campaign. It also helps you establish whether influencer marketing works for your product and how to draw up contracts with future influencers.
Let’s dive into the steps to get started with influencer marketing campaigns and how to measure the ROI of influencer marketing.
1. Set Clear Goals for Your Influencer Campaign
Like any other marketing effort, your influencer marketing campaign needs a concrete vision and goals to succeed. Setting overarching goals will guide you toward the right key performance indicators (KPIs) and metrics to accurately assess your influencer campaigns and make improvements faster.
Generally, trackable goals are based on the purchase funnel. So, most influencer marketing goals will fall into one of the following buckets:
- Building brand awareness/visibility
- Growing engagement
- Generating leads
- Raising conversion rates
- Improving sales/revenue
That said, all of your influencer marketing campaign goals should be specific, measurable, attainable, relevant, and time-bound. In other words, it should be a SMART goal.
Take an example of an influencer marketing campaign with brand awareness as the primary goal. Establish your previous marketing performance as the baseline and set goals for the influencer based on that. Ensure the goals you set are centered around your brand’s mission and reflect the current status of your business.
Once your team agrees that your brand awareness goal is SMART, tell each influencer or blogger you partner with the number of new followers (or impressions, purchases, clicks, etc) you expect on each platform by the end of the marketing campaign.
2. Identify the Metrics (KPIs) That Indicate You’re Moving Toward Your Goal
Metrics are the key to tracking influencer marketing. The metrics you decide to track should directly support your campaign goal and definitively show ROI. Of course, they’ll vary according to influencer marketing campaign goals and the purchase life cycle for your product. Let’s walk through some of the most popular metrics for tracking influencer marketing campaign performance.
Common KPIs To Measure Influencer Marketing ROI
Choosing which KPIs to focus on in order to determine influencer marketing ROI can seem intimidating at first, but it comes down to a few categories:
Conversion and Sales KPIs
- New customers
- One-time purchases
- Subscriptions
- Total number of sales
- Average number of sales
- Average order value
- Form submissions
- Referrals
According to the 2020 State of Influencer Marketing report, the most common way of measuring influencer marketing success is through conversions and sales.
One of the best ways to track sales and conversions from influencer content is with custom tracking URLs and coupon codes or promo codes. Some eCommerce platforms specifically integrate with influencer marketing platforms to make it easy to dive into your data. A great example is our Shopify and Popular Pays integration, designed to let marketers calculate ROI more accurately.
Visibility and Amplification KPIs
- Impressions, views, reach
- Shares, retweets, mentions
- Likes
- Clicks
- Comments
- Replies
- Reactions
- Direct messages (DMs)
Of course, amplification metrics are at the center of many marketing campaigns because they clue you into the number of people that were exposed to your brand, and how much of that visibility resulted in a stronger intent to convert (or actual conversions).
The intent might include subscribing to your email list, following on social media, sharing content, and other indicators of staying interested in your news and offerings. Even if influencer posts don’t generate sales immediately, posts and hashtags live on, and ongoing partners keep their followers interested in your products over time.
Earned Media Value
Earned media is brand publicity (social mentions, news coverage, customer reviews, etc) that your business doesn’t pay for, commission, or publish from your owned channels. It’s also becoming one of the most popular ways to calculate influencer marketing ROI.
If you create campaigns that are meant to drive influencer mentions or find that they’re already championing your brand online, you can also calculate the value of that earned media. Calculating earned media value (EMV) and determining the ROI in actual dollars can be tricky, so check out our guide for tips.
Backlinks
Brands also measure the success of influencer marketing campaigns by the number and quality of the backlinks they earn. Backlinks are links that point to your website from other websites, helping you build brand awareness, generate organic traffic, and attract new customers.
Influencers can be a part of your link-building efforts by directly linking to your landing pages in their sponsored posts or blogs, or by getting your product or service featured in an online article, for example.
Backlinks are also a vote of credibility and authority for your website, which helps with your Search Engine Optimization (SEO) efforts.
3. Add Up All Your Costs
To calculate your ROI, you’ve got to answer the question, “How much did we actually invest?” Account for all your influencer marketing campaign expenses, from payments to individual influencers or their agents, to the costs of shipping product samples, to any administrative overhead related to your influencer marketing program.
4. Tally Up the Revenue Generated by Influencers
You’ve designed concrete goals, assigned measurable KPIs to each goal (whether it’s impressions, EMV, digital sales, or another useful metric), and summed up all the costs of your influencer marketing campaign. Your influencers have gone to work, connecting with your shared audience, building hype, and driving action.
Now, dig into the data and analytics you’ve gathered to calculate your influencer marketing ROI by influencer, medium/channel, and so on. Did you meet your goals? How did your campaign perform on a quantitative and qualitative basis? For example, maybe your beauty kit launch campaign created more revenue from one-off purchases than more valuable monthly subscriptions. Or, perhaps you hit your impressions goal but most views were from people outside your target audience.
5. Consider the Impact of Each Influencer
If you work with multiple influencers to promote a single campaign, it’s worth it to break down the overall ROI by influencer. Who helped you reach your goals, and to what degree? Who generated the most sales or traction?
This will guide your future marketing decisions, such as whether the higher cost of a macro-influencer partnership is worth it or you should consider adding micro-influencers to your roster.
Average Influencer Marketing ROI Benchmarks
There’s no easy answer to what kind of dollar value you should expect from a given influencer marketing campaign. It will ultimately vary by the type of brand, products, or services offered, as well as other factors like your industry or current social media presence.
The 2020 State of Influencer Marketing report offers a couple ballpark ROI figures:
For every dollar spent on influencer marketing, the average business receives $5.78 in earned media value (EMV). Top businesses can earn up to $18 in EMV for every dollar they spend.
Generally, micro- and nano-influencers have stronger engagement rates than macro- and mega-influencers and celebrities because of the highly personal touch they bring to their follower interactions. The channels you choose also play a role. Instagram is where most influencers find success, while Twitter and LinkedIn have been less effective.
Considerations When Tracking Influencer Marketing ROI
If your influencer campaigns are falling flat or aren’t consistently meeting expectations, there are a few factors that could be affecting them.
Seasonality
The time of the year that your partnership kicks off will always have an effect on your outcomes. For example, peak holiday shopping season is when people’s social media feeds tend to be inundated with sponsored content, so they’re more likely to pass over it unless the content really catches their attention.
Current events, weather conditions, and more can also affect how well influencers’ posts perform. There are times when these factors will rule in your favor, and other times when you’ll have to be agile and adjust your campaign to match changing expectations or address content saturation issues.
Price of the Product or Service
Influencers have successfully sold millions of dollars’ worth of products and services at all price points. But businesses have to deploy different strategies if they sell a direct-to-consumer product that’s extremely affordable, or “big ticket” purchases like luxury appliances, which sell at a lower volume with more touch points along the customer journey. In the same way, this will hugely affect which influencers you should work with and which channels will yield results.
Evergreen Content vs. Time-Sensitive Content
What’s the intent of the influencer content you’re requesting or commissioning? The influencer should know upfront if their content should be evergreen, meaning their audience should still find it to be relevant, useful, and accurate years later, or whether it can have a time-sensitive element that ties it to a certain trend, event, season, or other cultural moment.
Recommended reading: Top 10 Influencer Marketing Best Practices
Tools To Help Track Influencer Marketing Campaign Performance and ROI
You’ll likely use a combination of in-house and third-party software tools to monitor and later analyze your influencer campaigns. Here’s a snapshot of commonly used data-tracking techniques and platforms:
Web and Social Analytics
You can use analytics from your website, social channels, or app to establish an influencer marketing campaign’s efficacy. Although you can’t always gain direct access to influencer analytics, you can request that they send you the analytics on the posts they create on your brand.
You can also watch the trends on your social media pages. Keep track of new likes and reactions when the influencer posts about your brand throughout the campaign period.
Tracking analytics also allow you to make vital calculations like cost per engagement (CPE) and cost per impression (CPM). These figures will allow you to establish ROI from influencer marketing campaigns.
Web browser analytics (often captured through Google Analytics) also allow you to connect a spike in activity on your website to your brand influencers. Web browser analytics also show the origin of traffic to your website. You can also use them to track influencer marketing from end to end by monitoring the new leads generated by each influencer all the way to conversion.
Influencer Marketing Platforms
In addition to helping you search for potential influencers to partner with, influencer marketing platforms let you collect and analyze the actual campaign data. Most offer a variety of handy features around performance tracking and campaign optimization to help your brand realize a better ROI.
The main advantage of influencer marketing platforms — compared to social platforms or web analytics alone — is that they consolidate all the analytical data you need. You can view all the insights on your dashboard.
Popular Pays, Traackr, Neoreach, Upfluence, TapInfluence, Keyhole, and GoAppPro by Shopify are some examples of influencer marketing platforms. If you’re using a cluster of influencers, these platforms can also rate their performances so you can make the right choice for your next campaign.
Trackable Links
You can use trackable links to keep an eye on metrics like leads generated, subscriptions, and sales. Easily create trackable links using the following tools and platforms.
UTMs
Urchin Tracking Modules (UTMs) are small fragments of text or code attached to a link. Google Analytics uses UTMs to track the origin of traffic to a website or webpage.
There are five types of UTM parameters that can let you know the source or website, channel, campaign, piece of content, or keyword/term where the traffic originated. You can attach multiple UTMs to a single link to monitor the traffic created by an influencer during a campaign and understand where visitors are coming from.
URL Shorteners
URL shorteners like Bitly can also be used for tracking influencer marketing campaigns. They allow you to generate trackable links and also show the analytics for pages when you type in a link.
Unique Landing Pages
You can create a special landing page for your partner influencer on your website. The page can be curated to suit the influencer’s niche and audience. You can then embed a tracking code on this landing page to capture any influencer-driven traffic.
Promotional Codes
Promotional codes, which you can generate and monitor in Shopify, are also essential in tracking influencer marketing. They’re unique codes consisting of a series of letters and numbers which let consumers earn benefits like discounts.
Once you assign a promotional code to your influencer, they can share it far and wide across any channel (digital or physical), and you can easily track the conversions.
Affiliate Links
Affiliate links are unique links generated from affiliate programs where link owners earn commission from every purchase generated by their link. Affiliate links are trackable and can even be synced with point-of-sale (POS) systems.
Recommended Reading: Using Influencers for Your Brand’s Affiliate Marketing Program
Social Listening Tools
Social listening tools help you keep track of mentions of your brand. They tell you what’s being said, where it’s being said, and by who. You can use social listening tools to monitor the engagement rate of your influencer partner. You can also jump into the conversation and handle questions an influencer can’t answer.
Customer Relationship Management Tools
Customer Relationship Management (CRM) tools are used to collect customer information, understand the customer purchase lifecycle, and often communicate with customers. They can also analyze the traffic on your different channels and organize these leads and customers into cohorts, or groups of people with similar behavior.
So, how does all this help you understand influencer marketing ROI? CRM tools show you the quality of leads an individual influencer attracts. You can cut ties with influencers who generate low-value leads and bolster the marketing budget for those that generate high-quality leads.
Although many brands engage influencers for engagement and brand awareness goals, the ultimate marketing goal is always to increase revenue. CRM tools can monitor each cohort and even suggest retargeting efforts to encourage as many leads as possible to convert.
Note, however, that the purchase life cycle — and success of these tactics — varies for different products. For instance, with FMCG products, results are almost immediate because the price often allows for impulse buying. With SaaS products and B2B products and services, the purchase lifecycle is pegged on a lot of external factors and may take considerably longer.
Recommended Reading: B2B Influencer Marketing: Your 2021 Guide To Success [+ 3 Examples]
Keep this in mind as you set your ROI and evaluate your influencers’ performance.
Recap
Influencer marketing is now an integral piece in the marketing mix: 90% of brands believe it works, and 72% say the “quality of customers from influencer marketing campaigns is better than other marketing types.”
However, understanding how an influencer impacts your marketing campaign is vital. Every business that employs influencer marketing needs a measurement strategy for tracking influencer marketing campaign performance and ROI.
Accurately measuring influencer marketing also goes a long way in establishing trust between your business and the influencers you engage. It shows that your business is reaching out with realistic expectations and a thoughtful marketing strategy instead of asking for the moon.
Popular Pays Brings Analytics Data and Performance Into One Platform
Having access to reliable analytics is crucial to calculating any marketing campaign’s ROI, and influencer marketing is no exception.
Popular Pays brings all your influencer marketing data into a single platform so you can quickly assess performance, identify top-performing content, and invest your marketing dollars with confidence. Even better, you can use our influencer search tool to find the perfect partner from a selection of over 60,000 creators.
Request a demo of Popular Pays to launch powerful, trackable influencer campaigns now.