5 Ways to Measure the ROI of Influencer Marketing
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
– John Wanamaker, 19th Century merchant and political leader
Data is the lifeblood of modern business. It is no different in marketing. To compete in the digital age, brand marketers must be experts at profiling, tracking and targeting people across the web and at leveraging this critical data to refine their marketing strategy.
With the explosion of social media, influencer marketing—the practice of partnering with online influencers to carry your message to their followers—has become a powerful marketing channel. Whether you are advocating for more resources for influencer marketing at your company or trying to dial in the right approach to an existing initiative, defining your campaign goals and meticulously tracking your performance is the only way to maximize your ROI.
Unfortunately, few tools and best practices are currently available to make sense of the mountains of data about the impact of influencers. To help you with your efforts, here are five critical performance metrics you can use when evaluating an influencer marketing campaign:
This measures the number of times an influencer’s post is viewed. Impressions are good indicators of the effectiveness of branding campaigns and become particularly useful when buying influencer inventory at scale.
Although impressions are the standard way to buy advertising inventory at scale, engagements — through a like, comment, or share — provide deeper insight into the effectiveness of the influencer’s post.
Although influencer marketing is often regarded as a branding strategy, savvy performance marketers are quickly realizing its power to drive sales, signups, and app installs. They are not alone: in a recent study, McKinsey found that consumer-to-consumer word of mouth generates more than twice the sales of other forms of paid advertising. This is video is a great example of this approach.
There are three main ways to track conversions for influencer marketing:
Trackable links: NeoReach has its own conversion tracking technology that enables you to track how many online sales each influencer drove for you. However, trackable links can only be posted on platforms like Twitter, Facebook, and blogs.
Promo codes: Not only do promo codes help you track the impact of your campaign, but they also build urgency and an extra incentive for viewers to buy your product.
Correlation: This entails correlating the time of posting with increases in sales or installs.
4. Brand Mentions
According to Nielsen, earned media, or organic word of mouth recommendations, is the most powerful form of marketing. Every social media strategist dreams that her latest campaign goes as viral as the ALS ice bucket challenge.
The question is how can you make that happen? How can you break through the noise to give your social campaign a real shot?
Many have been turning to influencers to complement the campaign and help spark the viral trend. In a recent study, Burst Media found that marketers who implement influencer marketing programs in 2014 received $6.85 in earned media value for every $1.00 of paid media. To track the number of times your brand is mentioned on social media as a result of your influencer marketing campaign, you can use one of the many third party software applications.
5. Content Quality
When you run an influencer marketing campaign, not only do you gain from the influencers’ reach and influence, but you also benefit from their creativity and production skills. A well-executed influencer marketing campaign will produce world-class sponsored content that you can leverage for your other marketing channels. This professionally produced app review for The New York Times’ Android app is a great example. To quantify this qualitative metric, you can rank on a scale of 1 to 5 how likely you are to feature the content in your customer newsletter.
Influencer marketing is still a nascent technology with huge growth ahead. Its applications are extremely varied; it can be used for raising brand awareness, driving online sales, or creating great branded content. As marketers start using the available technology to launch, track, and measure the impact of influencer marketing, they will be able to perfect their strategy and quantify ROI in a similar manner to other more established marketing channels.
By: Misha Talavera