In a world of ever-growing social media, it’s no surprise that businesses are searching for new and innovative ways to reach their target audience and increase brand awareness.
Influencer marketing is one of the most powerful advertising ways. Studies show that 93% of marketers have used influencer marketing within their overall marketing strategies, which means that only 7% of them have never used this strategy.
What is influencer marketing?
Influencer marketing is a form of marketing that focuses on using key individuals to drive the message of a brand or product and promote it.
These key individuals, or influencers, can be anyone from celebrities or bloggers to regular people with a large number of social media followers.
When using this strategy, one of the most important things to do is to measure the influencer marketing ROI.
What is influencer marketing ROI?
To answer the question “What is ROI in marketing,” we should mention that Influencer marketing ROI, or return on investment, measures how successful an influencer marketing campaign was in achieving its objectives.
It’s essential to know how much value you are getting for the amount of money you are paying to influencers.
Calculating the return on investment or ROI of influencer marketing can be difficult and tricky.
This article will explain everything that you need to do this task right.
Importance of measuring influencer marketing RO
So, as mentioned before, influencer marketing has become a powerful tool in today’s digital age. However, with great power comes great responsibility, and it is important to continuously measure the ROI of influencer marketing campaigns in order to ensure their success.
One reason for influencer marketing measurement is to determine whether the campaign was successful in reaching the company’s goals.
Another reason is to calculate the actual money gained from the return on investment of advertising campaigns.
Measuring influencer marketing return on investment can also help you identify which aspects of your campaign are working well and which parts need some improvement.
Additionally, it can help you determine how much money you should put into influencer marketing spending for your future campaigns.
Key metrics when measuring ROI of influencer marketing
In measuring influencer marketing ROI, you need to decide what you want to achieve from the campaign. Do you want to drive more website traffic, increase brand awareness, or boost sales?
Once you set your goal, you need to determine the key performance indicators (KPIs) most relevant to your goal to see whether you hit your target.
For example, if you’re looking to increase your website traffic, then tracking the number of visitors generated by the influencer campaign is a good metric for you to use.
Other valuable metrics include engagement rates (total number of likes, shares, and comments), reach (number of people who saw your post), and conversions (sales or leads generated as a result of the campaign).
How to measure ROI of influencer marketing?
Basically, calculating the ROI of influencer marketing depends on each campaign’s specific goals and objectives. But in general, for measuring your influencer marketing ROI, you need to determine your total marketing costs and your total profits generated from those marketing efforts. Once you have those figures, divide the profits by the costs and multiply by 100 to calculate your ROI percentage.
For example, if your total cost for your influencer marketing campaign is $5,000, and it generates $10,000 in profit, the influencer marketing return on investment for that campaign would be:
That means this influencer marketing ROI was positive, and your campaign was successful.
What is a good ROI percentage for marketing?
After calculating your influencer marketing ROI, you should see if it’s a good and acceptable number for your business or not.
Recent studies have shown that the average ROI of influencer marketing campaigns is $6.85 for every dollar spent. That’s an impressive influencer marketing return on investment that any business would love to see!
For many businesses, a good influencer marketing ROI percentage is around 100%. This means that the company generates $1 in profits for every dollar spent on marketing. However, many factors can affect this number, such as the type of business, its industry, and the specific marketing strategies used.
So, when trying to determine what is a good ROI percentage for marketing for your business, it is essential to consider all of these factors and tailor your calculations accordingly.
Limitations of current methodologies
It has been obvious that influencer marketing can be an effective way to reach a target market. However, there are some limitations to this methodology.
One of them is the difficulty of determining the influencer marketing ROI. You can track how much traffic an influencer sends to your website, but that’s not always a clear indication of whether or not the campaign was successful.
Even if you see an increase in website visits, you can’t be sure whether that’s directly influenced by the influencers involved in the campaign.
Secondly, influencer marketing campaigns can be expensive. Depending on how you work with influencers, you could end up spending a lot of money on sponsored posts, paid ads, or other promotional activities.
And the last problem is that it can be hard to identify the right influencers for a particular campaign. To have a high influencer marketing ROI campaign, you need to find influencers related to your business and high engagement rates. And this means that you need to put so much time and effort into searching.
But by using the right strategies, you can make this process easy.
- The easiest way for searching influencers is to use marketing platforms such as Ainfluencer.
Ainfluencer is a great influencer marketing platform that makes the process of finding influencers simple. It is a free, safe, and secure platform that lets you search influencers through filters such as gender, location, hashtags, etc.
You can then invite the most related influencers to your brand to collaborate with you.
- Google is another option. You can easily search your keywords and come up with countless names.
- And the last simple way for finding influencers is to search them by hashtags on Instagram and find them in different niches.
Tools for measuring influencer marketing ROI
There are a number of different tools to help you measure influencer marketing ROI, which we can divide into two categories:
1. Web Analytics
Web analytics tools can help you track how many people saw your campaign, how many people clicked through to your website or social media page, how many people converted into customers, and more.
These data can help you determine whether or not your campaign was successful, and it can help you make better decisions about which influencers to work with in the future.
These tools can track how well the campaigns are performing in relation to your goals.
For example, suppose a business is hoping to increase website traffic through influencer marketing. In that case, they can use web analytics tools to track the number of visitors who came from each influencer’s link and compare that with the overall traffic goal.
One of the most popular web analytics tools for measuring influencer marketing return on investment is Google Analytics. There are also other tools such as Spring Metrics, Woopra, Adobe Analytics, etc.
All of these tools allow you to track website visits, page views, and unique visitors, as well as goal conversions and eCommerce transactions.
2. Social Analytics
Social analytics tools allow businesses to track and measure the performance of their social media campaigns and quantify the influencer marketing ROI or return on investment.
Several different social analytics tools are available, each with its own strengths and weaknesses. Some popular options include Hootsuite and Sprout Social.
Each tool offers a variety of features, such as the ability to track engagement levels, impressions, likes, hashtags, and comments on various social media platforms.
As a result, an effective influencer marketing campaign can significantly impact a company’s growth.
There are several things that companies can do to measure their influencer marketing ROI and make sure their campaigns are as successful as possible.
One of the most important things is to carefully select the right influencers to work with. The influencers you choose should be aligned with your brand and have a large, engaged group of followings.
By using marketing platforms like Ainfluencer, you can easily find your targeted influencers.
In general, for measuring your influencer marketing ROI, you need to determine your total marketing costs and your total profits generated from those marketing efforts. Once you have those figures, divide the profits by the costs and multiply by 100 to calculate your ROI percentage.
For many businesses, a good influencer marketing ROI percentage is around 100%. This means that the company generates $1 in profits for every dollar spent on marketing.
Influencer marketing ROI, or return on investment, measures how successful your campaign was in achieving its goals.