Despite the fact that more and more companies are relying on influencers to amplify their digital marketing campaigns, knowing how to evaluate their effectiveness is essential when analyzing results. Therefore, in this article, we will show you how to measure ROI in influencer marketing.
What is ROI?
ROI is defined as return on investment and refers to the relationship between the money invested in a marketing strategy and the benefits obtained in return.
What is its purpose and how is it measured?
ROI allows us to know if we have made or lost money on an investment, making it the ideal KPI to measure the profitability of a campaign. It works as follows:
- ROI is positive when the benefit is greater than the investment.
- ROI is negative when the benefit is less than the investment.
The traditional way to measure ROI is: (Benefit - Investment) / Investment * 100
How do I calculate the investment?
Calculating the investment (in €) is very simple, you just have to add the budget you have closed with the influencer for the promotion and the additional costs that may have arisen from the collaboration, such as travel expenses or material (product) that you have had to send.
How do I quantify the benefit?
In the case of the benefit, it is somewhat more complex, since although there are ways to quantify it (in €), we must take into account that in this type of marketing, there are a series of intangible values that make the traditional formula not applicable to all cases.
Within the benefit or performance of this type of marketing, we would find:
In the case of promoting a specific product or service, unique discount codes or tracking links can be provided to the influencer to share with their followers.
This will allow us to determine how much money has been obtained as a direct result of the influencer marketing campaign.
Web traffic and analytics
If we have provided a link (or several) to the influencer for call-to-action, have we noticed a considerable increase in users and visits to our website during the days following the campaign? How much has it varied? Is its conversion rate lower or higher than the average of the acquisition channels with which we usually work?
It would be advisable to create an independent landing page for the promotion, adapting the copywriting of the products or services to the influencer's audience and tracking the navigation of their users, in order to apply retargeting techniques later.
Reach and interactions
How many people have been impacted by the influencer's post?
What % of engagement has it had, through likes, comments, mentions, and shares? (we can ask the influencer for a screenshot to access non-public data from the social network we need)
Has that impact and % of engagement been lower, equal, or higher than their average?
Have we seen an increase in our company's social media account statistics where the campaign took place?
Has the content where the promotion has been integrated been of high quality?
What impact has it had on the influencer's followers?
Have our company's values and interests been properly conveyed?
Has our brand's notoriety and image been reinforced?
Has our relationship with our target audience improved?
In conclusion, measuring ROI in influencer marketing is essential to determine if a campaign has been successful. In addition to generated sales -which allow us to calculate the direct impact of the investment- we must consider other benefits such as web traffic and analytics, reach and interactions, as well as the value of the content, in order to calculate the return on investment of an influencer marketing campaign.
If you need help in this process, don't hesitate to contact us! L3tcraft has more than 10 years' experience as an specialized Influencer Marketing Agency. We are here to help you create strategies, select influencers and manage campaigns! 😉