How To Create An Influencer Marketing Strategy?

influencer marketing strategy

Is there a usual process you follow when you want to buy something new for yourself? How do you decide what to buy? Do you probably go through different reviews, expert ratings, ask your friends, family, etc.?

Surprisingly it is not just you who makes decisions in this way, it’s all your customers too.  Not only do people read online reviews, but 84% trust personal recommendations as much as online reviews. The question here is how do you build good recommendations so that you can influence your customers to buy your products?

Influencers are people who have this exact ability. Influencers are experts within certain product niches, who affect customer decisions positively because of their persuasive power and following base.

71% of marketers agree that traffic from influencer marketing is much higher than other marketing sources. But even though so many marketers are adopting this strategy, is it appropriate for your brand to engage in influence marketing?


Do You Need An Influencer Marketing Strategy?

To begin, let’s understand if an influencer marketing strategy is the right strategy for your business.

To determine this, you must map out your customer’s journey. Only when you understand the process your customer goes through while making decisions, you can understand whether an influencer marketing strategy suits your business or not.

Analyse The Buyer Journey

Buyer journey analysis means analysing the steps that a buyer goes through before purchasing a product. 

It requires you to research how your customers behave, what are their likes and dislikes, their background, reactions, responses, and ultimately whether they buy products or leave (and what causes this customer friction). This will, in turn, help understand if this strategy is profitable for you or not.

To map your customer journey let’s start with identifying consumer behaviour at these three main touchpoints using the example of Lmnop, a brand that sells “I love New York City”:


Before The Customer Comes In Contact With The Brand

Research shows that Lmnop’s customers are teenagers and young adults who like to keep up with fashion trends and be popular. They come from a western culture with a well-off financial background. They are active on social media and share their brand experiences very often.

These customer characteristics show that the potential customers of Lmnop have characteristics that can be coupled with an influencer marketing strategy to boost sales and brand awareness.

When The Customer Engages With The Brand

When Lmnop’s customers see “I love NYC” t-shirts and caps, they ask their friends and online forums, questions like:

  • “Hey is this cool?”
  • “Hey does this look trendy”
  • “Does give a cool vibe”
  • “Is this in fashion today”
    And if their friends and family reply positively, they will purchase products from lmnop.

This shows that when the customers come in contact with the brand they are dependent and persuaded by social validation and opinion leaders. This means that Lmnop needs a strategy where persuasive, popular, and trendy people can influence purchasing decisions.

After The Customer Has Left

Once Lmnop’s customers have bought the “I love NYC” t-shirts and caps, they share pictures of it with their friends using related captions and hashtags.

This characteristic of Lmnop’s customers’ psychology tells us that they are in constant contact with people and experts from the community.

Similarly, if your customer journey research tells you that customers are dependent on recommendations and reviews by niche experts, then congratulations because creating an appropriate influencer marketing strategy is an appropriate option.

But now that you know influencer marketing is appropriate for you, is it more important for you than other marketing strategies?


Importance Of An Influencer Marketing Strategy

Image source – hostpapa

Now that you have determined that your customers are likely to respond to an influencer marketing strategy, let’s understand why do 91% of marketers consider this strategy important?

Builds Trust

The internet is filled with hundreds and hundreds of brands that make it difficult for customers to understand who to trust and who to buy from. More often than not decisions of who to trust and who to buy from are made based on known recommendations. 92% of customers trust brands based on recommendations from people over traditional ads. Therefore, it is of utmost importance for your brand to develop an influencer marketing strategy to gain the trust of its target audience.

Improves Online Visibility

Influencer marketing is not only important as a marketing strategy but also positively affects your online visibility.

The reviews, suggestions, reactions of the influencers often come up on the search results whenever someone searches for your brand on Google or social media channels.


More Content

One of the components of influencer marketing is generating high amounts of fresh and engaging content. Influencer marketing, therefore, becomes important because more content leads to more visibility, awareness, and engagement.

More Mentions

Since influencers are people who have a popular following and trusted follower base, followers might talk about the brand more and more by way of comments, chats, questions, story mentions, etc. People tend to talk more and stay around seven times longer when an influencer talks about a brand rather than any other advertising medium.

Economical Cost

An influencer marketing strategy is immensely important for a newly launched brand as well as a brand with a lower budget. Such businesses may not be able to afford and invest in paid marketing and advertising channels. On average, every $ 1 spent on influencer marketing, creates revenue worth $ 6.50. If you compare this with the pay-per-click system, every $ 1.60 generates $ 3.

Therefore, the return of investment (ROI) of influencer marketing is much higher and beneficial in proportion to the money spent on the strategy.


Better Engagement

Engagement has become a huge part of marketing and advertising. If your marketing strategy can make your target audience want to engage with your brand, you would have successfully achieved your value for money. Influencer marketing builds engagement 3.5 times more than engagement from traditional advertisements.

Improves Customer Reach

Influencer marketing is important because it helps your business trickle to reach every corner of your target audience. Conversations about brands are known to increase from three times to ten times when an influencer talks about a brand. The best way to understand this is by taking the brand Lord & Taylor’s example. Lord & Taylor partnered with 50 influencers and had all 50 of them, post a picture on Instagram on the same day wearing their new dress. After this, the dress sold out within less than a week.
The main takeaway here is that influencer marketing is important not only for building trust but also reaching out to your customers to convert their trust to sales.

Image source – NeilPatel

How To Develop An Influencer Marketing Strategy?

Influencer marketing is becoming increasingly important in today’s times, but how do you actually build a strategy for influencer marketing? This section comprehensively outlines the steps to strategise and create an influencer marketing plan.


Step 1 – Define Your Goals

The initial step to developing your influencer marketing strategy is to determine your goals.

Do you intend to focus on increasing engagement or reduce work with a minimal churn rate or achieve a higher conversion rate? Determining your goals at the beginning itself will give your strategy a consistent structure.  The two most commonly used goals for an influencer marketing strategy are:

  • Increasing brand awareness
  • Increasing sales

But instead of setting such broad goals, it would be beneficial to narrow down your goals to what exactly must be achieved from your strategy. Some goals to get you started could be:

  1. Increase your customer base amongst the youngsters in Chicago
  2. Raise sales by 30% over the next year
  3. Manage your online reputation positively
  4. Gain a 40% rise in followers on your social media accounts
  5. Gain authority over a product category in the market

Step 2 – Determine How To Tap Into Your Target Audience

After you have determined your goals, comes the question of how to achieve these goals to tap into your target audience. One of the ways to strategically tap into your customer’s minds to influence them would be to follow the Awareness-Interests-Desire-Action (AIDA) model, also called a purchase funnel.

Awareness

Awareness is when you want to reach out to more people to recognise and know your brand. At this stage people do not know about your product, so you need to ascertain how your influencer will make more people know about it. Will it be through cues in photos, videos, blog posts, etc.?

For example, Fiji water turned to the influencer Danielle Bernstein to build awareness. They did so by just placing a Fiji water in the background of Danielle doing exercise. In this way, Fiji water made people aware of their brand and its use – to keep you hydrated.


Interest

Interest stage is when the customer is aware of the offering (and its competitors) but develops a soft corner for just your brand.

This is often achieved by intriguing the customer, educating them, and making him want more.

For instance, OnePlus often sends gifts to the renowned influencers and ask them to review the brand’s phones and other offerings, unbox them, and generate interest among the target audience before the offering is actually launched.

Desire

Your customer may like your product, but not buy it. Therefore, if you want to tap into your target audience, work on what kind of content you want to use to make sure that the interest lingers around to turn into desire.

For instance, Daniel Wellington was able to turn their $ 15,000 business into a $ 220 million business in 4 years only following an influencer marketing strategy that sparked desire. Through catchy visuals, sleek colours, and a subtle vibe in all their picture, influencers made customers want to go to their website and buy watches.

Action

Now that the customer is interested and willing to buy, s/he will move to buy the offering. Your influencer marketing strategy at this stage should focus on how to facilitate this action.

Tapping into your target audience is very important because it determines what kind of content should your influencers make. The tone, feel, and type of content that is created through an influencer marketing strategy needs to be the perfect fit for the audience that you target.


Step 3 – Set A Budget

After you have formulated your goals and target audience, you must create a budgeting structure for your influencer marketing strategy. While setting a budget, you must factor in:

Goals

Goals are an important determinant of your budgeting strategy because based on what you want you to plan what you want to spend to achieve those goals.

Imagine that your goals include – doubling your sales from last year. Now doubling sales is an ambitious goal, no doubt. If you aspire for an ambitious goal, you must be spending ambitiously and smartly.

If your goals include – increasing followers by 20% over the next quarter, then you may have a lower budget than someone who wants to double their sales.

Therefore, first, compare the proportion of resources that will be required to achieve your goals. Using that comparison formulate a budget.

Type Of Influencers

The second important aspect while creating a budget plan is what type of influencers do you want to work with. The major 4 types of influencers for you to choose from are:

Types of Influencers
  1. Mega-Influencers: Micro-influencers include celebrities, online niche experts, or opinion leaders who have over 1 million followers on at least one of their social media platforms.
  2. Macro Influencers: This includes opinion leaders, niche experts, and famous personalities who have followers from the range of 500,000 and 1 million on at least one of their social media platforms.
  3. Mid-Tier Influencers: These are budding niche experts or famous personalities with followers ranging between 50,000 and 500,000.
  4. Micro-Influencers: These are ordinary people who are famous because of their knowledge of a niche or because of some special reason. Micro-influencers have followers ranging between 10,000 – 50,000 on one of their social media accounts.
  5. Nano Influencers: These influencers have less number of followers (1,000 – 10,000) but have very high engagement with them as they are considered experts in their niches.

Deciding what kind of influencer, you want will determine how much budget you should allocate for your influencer marketing strategy. Do you want a mega influencer with thousands of followers and a massive following base? Do you want to start with a mega influencer and then shift focus toward macro and micro ones? Or you want to start with a nano-influencer and work you way up?

The usual price range of influencers based on their followers would look like this, though influencers may charge per post, number of guaranteed views, percentage of assured sales, etc.:

Image source – Buffer


Step 4: How To Find An Influencer

The first three steps set the foundation for your influencer marketing strategy. After this foundation is set, we move to finding an influencer. It’s important to note that you don’t want to just find any influencer – you want to find the appropriate influencer to suit your goals and budget. An appropriate influencer would be one who is aligned with your brand’s identity, mission, and vision.

What Makes A Good Influencer?

To understand if a candidate is the right influencer for you, you must look-out out for the following qualities in the influencer:

  1. Confidence
    Confidence is like the skin of a successful influencer. An influencer who is confident will make sure that a brand is portrayed as a strong, commanding, and influential one.
  2. High engagement ratio
    Influencers are not all about followers. Followers can be increased through inorganic methods by anyone. But an organic, and genuine influencer will have likes, shares, and comments, in proportion to the number of followers they have. This proportion is called the engagement ratio.
  3. 3 R’s of an influencer – Relevance, resonance, and reach
    Make sure that the influencer’s social personality is relevant to what you’re looking for your brand. If your influencer truly believes and resonates with your brand’s purpose, s/he can make the followers believe too. Thirdly, the influencer must have a good reach and actually be able to influence people. A huge following doesn’t make everyone an influencer. An influencer should be able to reach the customers, influence their purchasing decisions in a positive way for you.
    For instance, if you are a brand that makes nutritional snacks for people who practice yoga and meditation. One of the influencers on your list is someone who loves being lazy, taking rest, sleeping off, snacking on junk food, and binge-watching Netflix all day. But she has the highest number of followers compared to others. Would it be a good strategy to work with her? No. Because:
    1. Her social personality is not relevant to what your brand stands for
    2. Her profile doesn’t seem to resonate with your brand’s product
    3. People interested in her will be people who like to relax, take the day off, and spend the day binge-watching. Her reach is not in the direction of your target audience.
  4. Passion
    A good influencer has to be passionate about this work. Passion means that the influencer is hungry for more engagement, more trust, and more sales. The influencer must keep up with all social media trends and infuse it with his/her strategy. A passionate influencer is reliable because passion strengthens the partnership between a brand the influencer.
  5. Authenticity
    Authenticity is another key quality to look for. If your influencer is authentic, followers will believe that your brand is something to care about, talk about, and check out. Inauthentic practices include copying profile aspects like photos, captions, posters, the structure of a poster, etc.

Hence, when you’re looking for influencers don’t merely recruit based on the number of followers or their cost. Dig deeper to find such qualities that will help you build a strong standing influencer marketing strategy.

Finding An Influencer

To find an influencer, you can follow two ways:

Search Manually

While conducting a manual search you can use the following tools:

  1. Google or any other search engine – Search for phrases like ‘top shampoo influencers’, ‘top candy influencers’, ‘top beauty influencers’, etc.
  2. Instagram or any other social media app – Search for trending hashtags related to your topic, like – BestShampoo, ClearSkin, TopGame, ComfortableAirline, etc.

After finding people who check off the right qualities and fit into your budget, you can compile a list of their contact details in a spreadsheet. Make sure that this spreadsheet includes:

  • Name
  • All social media profile links (Facebook, Instagram, Twitter, Snapchat, etc.)
  • Number of followers
  • Engagement ratio
  • What value they bring to your brand
  • What value they don’t bring/What needs to be worked on
  • Costs they charge
  • Previous brands they have partnered with/Current brands they partner with
  • Searching through online tools
Search Through Influencer Database Tools
  • BuzzStream Discovery – A free search engine for finding influencers. Using this you can easily search for any keyword or phrase and the database will compile a list of results with all influencers related to that topic.
  • BuzzSumo – BuzzSumo is a paid search engine for finding influencers, content, competitors, etc. Using BuzzSumo you can not only find contacts of influencers but also the number of twitter followers they have, the number of average retweets they receive, their reply ratio, etc. Along with this a feature called ‘search content shared’ also shows up all the content that has been shared related to the relevant topic. This helps you understand how many people are creating content relevant to you and how they can be potential influencers for you.
  • Deep Social – DeepSocial is a freemium, AI driver influencer database. It allows you to not only find influencers but analyze the influencers through filters like age, interests, gender, geographic location, ethnicity, etc.
  • Upfluence – Upfluence is a free influencer database. Similar to Deep Social you can narrow your searches on Upfluence using categories like location, number of followers, etc. Upfluence also offers a Chrome plug-in, which helps you in analyzing an influencer’s profile from Facebook, Instagram, YouTube, Pinterest, and blogs directly from your browser.


Step 5: Create A Management Strategy

Lastly, you must make sure that you manage your strategy to your best advantage. A successful influencer marketing strategy will include the following as part of its management plan:

Setting Key-Performance Metrics

A few basic key-performance metrics for influencer marketing include:

  • Brand awareness
    • Engagement
    • Generating more leads
    • Sales
    • Clicks on affiliate links

Influencer Content Strategy

After you have set your KPIs, determine what kind of content strategy will your influencer employ. Content that is effective and could win over the trust of your audience includes:

  • Product placement
    The key to influencer product placement is not giving a direct impression of advertising, but a natural fit in a scenario.
    For instance, here Audible – a company that makes audiobooks, partnered with Carole Radziwill and tried to place their product in a natural, comfortable and non-direct setting
  • Brand integration
    Brand integration will be more direct, with the product as the focus in a scenario. For instance, TVF developed an entire web series revolving around its sponsor – Tata Tiago.

  • Influencer Generated Content
    This is content the influencer creates for marketing. This may include:
    • Creating blogs and writing reviews
      For instance, the Amamda Stanton partnered with FabFitFun and created lifestyle blogs for marketing their skincare, makeup, fitness, and other lifestyle products.
  • Influencer takeovers
    Influencer takeovers are when you let your influencer handle your brand account for a set time like a few hours or an entire day where they share customised content based on a given brief for your products.
    For instance the fashion magazine Harper’s Bazaar turned over their Instagram story to Jamie King for an event, where Jamie showed her styles, outfits, make-up, etc.
Image source – Social media examiner


Creating A Clear Contract

Influencer marketing greatly affects your brand image. If you set confusing and unclear terms, it could negatively affect your brand’s reputation. While creating a contract with an influencer a few things you ought to consider are:

  • The duration the influencer will work for
  • The level of autonomy the influencer has over the brand image
  • The monetary terms of exchange
  • If you are providing the influencer with free merchandise, set terms and conditions for it at the beginning itself
  • Make sure the influencer agrees to never harm or disrespect the brand image, vision, and identity
  • Clarify whether the influencer can partner with other brands during his/her tenure with your brand
  • Set average expected engagement rates for a daily, weekly, fortnightly, etc. basis
  • Ask for a guarantee on the following aspects – authenticity, transparency, honesty, and creativity

Building A Cordial Relationship With The Influencer

Lastly, keep in mind that an influencer is a person too. For the protection of your brand’s marketing, image, and courtesy, you must ensure to be on cordial terms with your influencers. Make sure you do not over-burden them with work. The aim of having a cordial relationship is that the influencer feels connected to the brand because such a connection will positively work for your brand’s image.

Go On, Tell Us What You Think!

Did we miss something? Come on! Tell us what you think of our article on influencer marketing strategy in the comments section.


Feedough

Jeanine Amapola : Social media influencer gets her #domain via the #UDRP process

 DomainGang.com: Jeanine Amapola is “a prolific and internationally recognized American YouTube lifestyle and fitness star, social media influencer and actor.” Despite being in the biz for a full decade, she never registered her domain name, jeanineamapola.com. In 2016, someone else did, but they let the domain expire. In 2018, another pe…
Domaining.com

Opera Event closes $5M Series A for its esports-focused influencer platform

Today Opera Event, an influencer software service, announced that it closed a $ 5 million Series A. The Oakland-based startup raised the capital from new lead investor Antera, with prior investors Atlas Ventures, Everblue, and Konvoy Ventures coming along.

According to Crunchbase data, Opera Event had raised at least $ 1.2 million before this new round.

Opera Event is starting with a focus on influencers in the esports market, a business that founder Brandon Byrne knows well. Byrne previously worked for former esports organization Curse and served as the CFO of Team Liquid; Team Liquid is an active esports organization with players in a number of games, including League of Legends and Starcraft 2.

The startup wants to help esports teams monetize, a likely welcome effort given the industry’s historical issues with revenue generation, and reward micro-influencer fans. How it intends to do that is its core software service, one that Byrne expects will in time work for other verticals and influencer sets. Let’s explore.

Opera Event in practice

It’s perhaps best to explain what Opera Event does with a hypothetical example, built off notes from an interview with Opera Event’s Byrne. Let’s say that Alex Wilhelm Super Awesome Esports (AWSAE) is a small Starcraft 2 team — it’s just big enough to attract some sponsorship, but not as much as the team would like. However, AWSAE’s Starcraft 2 players have dedicated fans, many of whom also stream on Twitch and maintain a presence on Twitter.

By using Opera Event, AWSAE’s fans that stream can join the team’s commercial world, adding its sponsors to their Twitch pages, tweeting out the same campaigns and more. Opera Event sits between the team, its community and capital sources (brands), helping make everything click. It’s a situation that works well for Alex Wilhelm Super Awesome Esports. With its community streaming under its commercial banner, its demonstrable in-market impact (tweet impressions, minutes engaged on Twitch, etc) grows sharply. Its associate small streamers and fans get to take part in in the team’s world, and can be rewarded with things like social follows and other bits of love — all while brands can better deploy capital. (Opera Event calls this “the ability to engage and manage content creators efficiently and at scale.”)

Now AWSAE can get bigger sponsors as it can offer a bigger audience, it can share revenues or provide other succor to its fanbase, and brands can get their whatnot in front of more viewers at once.

One team that Byrne detailed had about 39 members doing around 50 million engaged minutes each month on Twitch. Using his startups software to create two affiliate programs, the same team grew to over 3,000 influencers that generated north of 450 million minutes per month of viewership. The latter set of figures are far more commercially viable.

The aggregation of small streamers is more than adding up views, it turns out. Byrne told TechCrunch that smaller esports streamers have better click through rates than the entertainment categories giants, which could help team fans and other community members that sign up as part of their Opera Event network have outsized impact on sponsor results.

Opera Event takes a material cut of deals it lands through its sales team (25% to 30% per the company) and a small cut for deals that flow through its platform but originated elsewhere (2% to 3%). The model generated around $ 1.8 million for the startup in 2019, and Opera Event hopes to reach $ 9 million in revenue this year.

Particularly important in today’s changed market, Byrne told TechCrunch that Opera Event is a quarter away from breaking even. That should keep the company safe during a downturn.

In time, Opera Event wants to add more niches to its stable. Its founder mentioned yoga as an example. Where there are influencers big and small, the startup wants to show up and help facilitate influencer commerce and collaboration.

Startups – TechCrunch

Measuring Influencer Marketing ROI

Studies have proven that influencer marketing ROI is found to be 11 times more than that of banner ads and conventional advertising channels. That explains the “buzz” about influencer marketing ROI in the digital marketing sphere!

But there still exists a notion that it is impossible to measure the return on investment (ROI) for influencer marketing!

The good news is that we understand trends and are here to guide you through calculating influencer marketing ROI.

But for the absolute beginners –


What Does Influencer Marketing ROI Mean?

Influencer marketing ROI refers to the metrics of an influencer marketing campaign to quantitatively determine its efficiency with respect to the investment.

In order to calculate the return on investment for influencer marketing efficiently, the objective and goal of the campaign must be clear. While for an established brand, this may mean boosting sales, for an upcoming brand it may mean building brand awareness. In both cases, the influencer launches a market campaign and calculating the ROI helps tangibly ascertain the success and efficiency of the campaign.

Why Is ROI Important?

Why at all should a brand calculate the ROI of influencer marketing? Why not merely let the influencer do “their thing”? The simple answer to that is –

Influencer marketing has grown to become a $ 5-10 billion industry. Therefore, it is very important to capture the market at this growth stage. And the only way to ascertain whether or not investments in this industry are fruitful is through calculating its ROI. The practical use and impact of calculating ROI are:

  1. Measuring Profitability

By way of calculating the influencer marketing ROI, a brand can clearly understand the returns generated per dollar invested in the influencer’s campaigns. Once a brand has estimated the returns generated per unit invested, the allocation of resources becomes more practical, such as – budget, time, number of members for the team, etc.

  1. It Helps Estimate Cost-Per-Engagement

Cost-per-engagement (CPE), though quite similar to profitability, refers to the revenue generated from the ‘clicks’. Depending on the social media platform used, these ‘clicks’ refer to – likes, comments, views on videos, etc. CPE has been found to be as low as $ 0.01 (one cent), for influencers. Therefore, its vital to continually calculate the ROI and make us of its results to improve CPE.

  1. Establishing Key Performance Indicators (KPIs)

Key performance indicators are used to quantitatively determine the success of a brand. Calculating the ROI of influencer marketing not only helps with estimating returns but helps in estimating KPIs too. This includes conversion rates, referral traffic, and influencer consumer loyalty.

  1. Finding The Best Performing Channel

Another huge impact of calculating influencer marketing ROI is that it can be done platform-wise. A brand making use of influencer marketing can estimate the ROI based on every channel. This briefly means that you can estimate what are your returns from influencer marketing on Instagram versus on Facebook versus on Medium, etc.


Measuring Influencer Marketing ROI

While the statistics from the previous section establish the growth of influencer marketing ROI, they do not explain how to do about calculating the same. This step-by-step section will act as a guide on measuring influencer marketing:

Influencer Marketing Objectives

The first and most important step toward calculating the ROI is setting clear goals and objectives. This is an important step not only for measuring ROI but for influencer marketing too. Setting objectives entails two aspects:

  1. What are the goals of your influencers?
  2. What is the brand’s goal through the marketing process?

While it is more likely that a brand working with influencers at the moment might have already defined its goals, it’s never too late to start. Defining goals helps narrow down the focus aspects of the ROI. For instance, if the goal is visibility and awareness, the focus ROI aspect would be ‘are people noticing the brand?’, but if it is engagement, the focus ROI aspect would include cost-per-click revenues and cost-per-engagement revenues.

Influencer Marketing Campaign Metrics

The next step to determine and note the metrics to be targeted. Is the focus metric ‘growth’ or is it the ‘duration’ users engage with?

measuring influencer marketing programs

 

According to a Linqia study, the most widely used metric has been ‘engagement’ (cited by 90%). While it is not necessary to narrow down a campaign to a singular metric, one must note that majority of the marketers make use of clicks (59%), impressions (55%), and conversions (54%) too. Along with these, metrics including ‘reach’ and ‘product sales’ have gained popularity too.


Roi Calculation

The point of determining ROI is to ascertain whether the returns from the campaign are positive for the brand or negative for the brand?

The simple formula for the calculation is:

ROI = (Profit – Investment)/Investment x 100

A simple example to help understand better would be, assume that Feedough has started influencer marketing and wants to calculate its ROI. After laying down a clear blueprint of goals and focus metrics, we decide:

Case 1

  • Campaign Investment – $ 5000/-
  • Number of influencers – 3
  • Social media channel – Instagram
  • The value generated after 1 month – $ 8000/-

Now applying the formula would look like:

ROI = {(8000-5000)/5000} x 100

ROI = (3000/5000) x 100

ROI = 0.6 x 100

ROI = 60%

Case 2

  • Campaign Investment – $ 5000/-
  • Number of influencers – 3
  • Social media channel – Quora
  • The value generated after 1 month – $ 2500/-

Now applying the formula would look like:

ROI = {(2500-5000)/5000} x 100

ROI = (-2500/5000) x 100

ROI = -0.2 x 100

ROI = 20%

This means that in case 1 for every dollar invested, the company has made a return of positive $ 0.6, a profit. On the other hand, in case 2, for every dollar invested, the company has made a return of negative $ 0.2, a loss. Therefore, this would help Feedough understand that hypothetically, investing in Instagram influencers is better than investing in Quora influencers.


Return On Investment Analysis

An ROI analysis helps in moving beyond the superficial ROI numbers. What does ROI analysis mean?

“ROI analysis refers to the detailed assessment of the profitability of an investment.”

From an influencer marketing point of view, an ROI analysis can be as simple as dividing the ROI calculations based on relevant factors. Such factors include:

  • Social media platforms (How is the ROI through a Twitter influencer? How is it through a Facebook influencer?
  • Age (How is the ROI if the influencer is a late teen? How is it when the influencer is a young adult?)
  • Gender (How is the ROI when the influencer identifies as a male versus female? How is it when the influencer identifies as non-binary?)

What Is A Good ROI?

What does ‘good ROI’ mean?

Good ROI refers to the most efficient ratio between return and investment.

In the context of influencer marketing, it basically means, when you spend $ 1 worth investment into influencer marketing, what should you ‘ideally’ expect in return?

A good ROI is considered to be 5:1.

5:1 essentially forms the centre of the bell curve. A return to investment ratio lower than 5:1 is considered to be poor ROI, while above 5:1 is considered to be great.

Influencer Management Platforms

Using the aforementioned formula, any brand can easily and quickly calculate the ROI. For increased efficiency, the formula can be expanded to include various other engagement related metric data. In case you wish to go about the complex way too, this guide has got you covered. This section elaborates on the top easiest and free ROI calculation platforms:


Google Analytics

Google Analytics is a great tool, especially for tracking and managing influencer marketing, but for other channels of marketing too.  The reason why Google Analytics is considered great is its provision of free tools that permit close analysis of business data – all in one place.

Apart from it being easy, estimating social media ROI through Google Analytics has become easier than ever. Google Analytics helps calculate the ROI but, more broadly, the ROAS, that is, the Return On Advertising Spend.

But, nevertheless, ROAS analysis aids the estimation of the ROI.

Firstly, the ‘cost analysis’ report function can be used through Google Analytics. This can be done by following these steps:

  • Go to the ‘acquisition’ button
  • Next click on the ‘campaigns’ button
  • Lastly, click on the ‘cost analysis’ button
    influencer marketing google analytics
  • If your cost data is imported into your Google Analytics account, the report would look like this.
    cost analysis

Secondly, in order to make use of the ROI analysis feature the following steps can be followed on any Google Analytics premium account:

  • Begin by navigating to the ‘Conversions’ section
  • Next click on the ‘Attribution’ button
  • Now the option ‘ROI Analysis’ would be in the dropdown menu
    roi analysis
  • This ROI analysis report would like this:
    roi analysis report
  • Interpretation of the ROI analysis report: Though confusing this report is very detailed. For a general report, the ‘data-driven’ report would be sufficient. And for any specific report related to the interaction of users, time-based engagement, non-direct clicks, etc. the appropriate option from the dropdown menu may be selected.

Pixlee

Pixlee offers a great platform to help brands track influencer activities and results. It helps in organizing, tracking, and managing the influencer networks to, in turn, strategize and build market value. One of the marketing tools on Pixlee includes ROI tracking.

Using Pixlee’s influencer management tools, companies could easily connect their influencer programs to their efforts with a hard ROI. Thereby tracking the impact and efficiency of influencer marketing campaigns.

  1. Using Pixlee one has the option of choosing between ‘influencer discovery’ and ‘influencer management’.
    pixlee influencer management
  2. Through the ‘influencer discovery’ option one can look for hiring influencers and their portfolios
    pixlee influencer management
  3. Using the ‘influencer management’ option you can track the ROI, engagement and various important KPIs through column-wise data of – last interaction; followers; ROI; engagement; number of posts, etc.
    pixlee influencer ROI

Hubspot

Last, but probably the easiest platform for ROI calculation is Hubspot. Hubspot provides the user with 4 basic entry fields somewhat like this:

  • Enter the estimated number of campaign visitors per month in the first entry box
  • Next, monthly leads refer to the estimated number of leads generated per month.
  • Next enter the number of customers who made purchases in the month.
  • Lastly, enter the estimated sales revenue per month in the ‘monthly sales price per customer’ entry box
  • Then click on the ‘calculate’ button
    Hubspot influencer ROI

Any user can easily enter the respective fields, and click on the ‘calculate’ button to get the ROI value. The only disadvantage is that Hubspot is not as wholistic as the previous two websites in terms of tracking other marketing metrics.


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