Nowadays, Influencer Marketing is one of the most important communication channels that each brand incorporates in its strategy in order to leverage awareness, engagement, sales, increase website visits, and so on.
In fact, recent research shows that 76% of brands plan to increase their influencer marketing budgets in 2022.
However, one of the most common mistakes in Influencer Marketing is the misconception that influencers can do everything and anything that a brand could ask for, in an instant time and with great, impressive results!
Long pause here…..Do you understand the wrong thinking in the above sentence?
Have you ever met someone in marketing that guarantees results in a short period and a multigoal achievement? If yes, please give us his phone number because he may be a guru looking for a home and acknowledgment.
Influencer Marketing is not a random tactical campaign. It requires strategic analysis of the brand’s situation and target audience. If you don’t consider the strategy, you will miss the results, and consequently, you will run Influencer Collaborations instead of Influencer Marketing.
This blog will analyze the right way to start building on an Influencer Marketing Strategy and 5 ways to calculate ROI!
Let’s start with the key term- Return on Investment! It is one of the most important measurements that help to figure out campaigns' profit and success. We usually divide ROI into two parts, Short-Term ROI and Long-Term ROI. The categorization of each movement depends on the goals and stage of a brand.
And now, let’s go to the next essential point of the development of your strategy: your campaign's objective. One of the most important steps for a successful Influencer Strategy is to focus on one objective at a time. Think about your primary goal for 2022 that you want to achieve through Influencer Marketing, and then build on the objective you have to work on to achieve your goal. Once you figure them out, you will be ready to set up the KPIs and metrics of your campaign and proceed with the marketing plan and idea!
5 Ways to Calculate ROI
Visibility:
The first level of your marketing funnel is brand awareness. This objective helps your brand target new customers and create familiarity and trust. Hence, the ROI of a brand awareness campaign is the number of new customers that get in touch with your brand and are aware of your products. To recognize the results of your campaign, you need to look at the below key metrics:
- True Impressions
- Reach
- Branded search volume
- Social Media Mentions
- Web- traffic from SM Channels
- An overall uptick in web traffic
How to Calculate it:
Visibility: CPM=
(influencer payment fees) / (impressions) = CPM
Engagement:
Engagement is the hero metric to evaluate and forecast your user’s interest and interaction with your brand or products. It's a criterion that shows your customers’ future intent of making a purchase. The ROI of your campaign's engagement includes the number of actions users take regarding your campaign either on your owned or purchased Social Media accounts or on your website.
To evaluate the engagement rate of your influencers and your campaign, take into consideration the below metrics:
- Engagement in social media posts
- Social media post saves
- Cost-per-engagement
- Email subscribers
- Account follower growth on social channels
- Add-to-cart action
How to calculate it:
Engagement: CPE=
(Influencer Payment Fees) / (Engagements) = CPE (A lower CPE is what you’re aiming for)
Direct Sales:
The good news for you is that each influencer activation could enhance your sales somehow. Sales could point out your brand’s revenue growth, which is one of the most important goals that all brands should achieve. Still, it is essential to separate the type of your sales into long-term sales - the most valuable sales that come through your branding strategy and loyal/ fans, and short-term sales that are based on seasonal sales or mini-campaigns.
The ROI of an Influencer Sales campaign includes each attribution that comes from the Influencer Marketing through promo codes, tracking links, and analytics.
How to calculate it:
Direct Sales: CPC=
(Influencer Payment Fees) / (Total Number of Sales driven through trackable links) = CPC.
And as we analyzed the above metrics, let’s go to the hidden treasure, the accurate vital metrics that define your next steps after a campaign is launched! Those will help you make decisions or prove to your managers that Influencer Marketing is worth it!
Return on Marketing Investment:
It is one of the most important metrics to show the results of your work, the efficiency of your influencers, and the impact of your campaign on your profits! To calculate it, you need to apply the formula below:
Marketing Expenses - Profit/marketing expenses
Please note that this is recommended especially for your sale-oriented campaigns!
Brand Lift:
This metric is connected with surveys! And is an advertising metric that shows you the impact of your campaign on the brand since it measures Brand Awareness.
How does it work?
In an advertising campaign, you will show an Ad to a specific target audience. But, you need to take a small sample of that target audience and set it aside since you will not show the Ad to that group. And then, using surveys or questionnaires, you will survey both groups, people who had seen the Ad and people who hadn't seen the Ad, to observe the results of your campaign in terms of brand awareness and the purchase intent.
To calculate the Brand Lift, you need to prepare a Survey and analyze the data, and then use the below formula:
-Number of desired responses in the test group / The total number of responses in the test group
-Number of desired responses in the control group/ The total number of responses in the control group
-Test group percentage - Control group percentage = Brand Lift
I hope the above will help you understand how things work for your influencer Strategies and how to measure success!! Keep in touch with us if you have more questions!! Love ya!
Resources:
Opium Works: Influencer Marketing Guide 2022
Aspire: 3 Must-Have Influencer Marketing Resources
