Social Media Influencer Marketing is an ever-growing trend. More than 70% of brands spend some of their marketing budgets on influencer marketing. By the end of 2020, an estimated $7 billion will be spent on Instagram alone for influential marketing. However, to understand and calculate the campaign ROI you would need to measure the success of your influencer marketing campaign.
Social Media’s advent has brought about a change in people’s lifestyles and choices. These choices get reflected in their daily consumables to trends and fashion. People with a high number of followers and an engaged audience earned by posting creative content are labelled as social media Influencers. These influencers can post about their experiences with the products they have used and got benefits.
These recommended products or services are bought and used by their followers and this increases the brand’s revenue and customer engagement. So, what is ROI? It’s an abbreviation for Return on Investment. And that means a calculated and clear depiction of what the returns were from your campaign. So, the question still remains, how to calculate that? Well, to answer that here are five steps to calculate your Influencer marketing ROI.
- Setting up goals
The first and the most important step is to set up goals and targets that you wish to achieve through your campaign. Get a clear and informative representation of your brand’s current data on all the parameters you wish to target. This creates the route for the rest of the campaign.
What is the target area in terms of the consumer base? On what platform do you want to run the campaign? What type of content is to be produced? What influencer do you wish to collaborate with? Are some of the questions to which you will start receiving answers after setting up the targets.
Some commonly targeted areas as per set goals are,
- Brand awareness increase.
- Expand customer base.
- Increase sales.
- Manage brand values and reputation.
The above are just examples of goals at an organizational level. The setup of goals needs to be more detailed and granular for more effective results.
- Definition of metrics
Once the campaign goals are set, identification and definition of metrics for accurate measurement comes next. Metrics should be specific, timeline-based, and achievable. So, what are the metrics actually?
- Views on the post: The number of views/clicks garnered by the post from the influencer. The number of views will give you an idea as to how many people were reached through that post.
- Engagement rate: Engagement rate is the amount of engagement generated from that post. This is not a calculation of views but more of the engagement rate where comments, shares, reactions, and likes are taken into consideration.
- Redirector URL tracking: Redirects or URL tracking is a process where the link you clicked on takes you to the intended page but through a gateway that captures the viewer’s behaviour. Another is URL tracking where the URL is amended to capture the intended data.
- Promo codes: Promo codes are discount or offer codes unique to influencers to attain a calculation on the number of orders placed using that promo code. This lets you directly understand how many users were converted to customers.
- Follower numbers growth: Generally for goals like brand awareness or value the followers gained can be accounted for with the gap between the number of followers at the start of the campaign and the end of the campaign for the brand.
The setup of goals and targets can be done for each influencer in your campaign or the influencer you are collaborating with, whichever be the case as per your campaign strategy.
- Analyze Cost of campaign
There are many ways to analyze the cost of the campaign. Though these majorly vary as per the campaign most of the costs fall under the below sections,
- Time: Time is money. Time is precious. Time is always ticking. The amount of time spent on the campaign directly translates into the cost. The lesser time spent on the campaign costs a lesser amount of money.
- Free Products/Giveaways: Giveaways are free for the receivers but costs money to the business. The more free gifts and giveaways mean more costs involved.
- Influencer’s fees: The influencers might not invest their time or creativity for no monetary returns. There will be a cost involved for that, most times. An exception might be where the influencer is a fan of the brand or the product, but it will be an exception.
- Calculate the returns
Most of the campaigners end up measuring the overall performance of the venture, but it is not usually the best way. Measurement of individual influencer’s success over a period of time and comparing it to the peer group of influencers in the campaign is better. This gives an overview of the campaign’s success.
A custom URL will track the visitors redirected from the influencer’s post. Unique URLs can also be created using redirects or appending the URL with the sought-after information that needs to be tracked. Promo codes will give you a count of how many used the promo code for that influencer to avail of the discount.
- Assess and Optimize
As explained above, you will need to analyze the data for each of the influencers’ performance using filters of your choice. The representation of the information will let you decide on whether the expected outcomes have been reached for each unique influence.
The results will guide you on your way forward. Now you need to decide again after tallying the results with the assessment matrix. If the expected results were attained or not and whether the campaign’s success rates met the targets needs to be inferred.
This will allow the optimization of the campaign. If the influencer’s contribution towards your campaign does not meet the goals then the campaign with that influencer can be done using another method or stopped as per the decision taken.
A successful social media influencer marketing campaign requires effective planning, strategizing, and execution. Also required is a detailed measurement metric and financial planning on the investments. Finally, you will also need to measure the success of the campaign and then optimize it as per the displayed results. These will let you calculate your ROI and understand the success rate of your social media influencer marketing campaign.