Before we get into the details of calculating the ROI of influencer marketing, it's important to know what a good ROI is.
ROI in marketing is the value you get for the money you invest in a campaign with influencers.
It's a bit like a recipe: you want the ingredients you bought to turn into a delicious dish that makes the taste buds salivate (and also brings in some likes, comments on the networks, and then sales, of course!).
Measuring the ROI of your Influence Marketing campaigns is crucial! It's a way to understand if you're getting a sufficient return on your investment, if you're building your empire or if you're just ricocheting in a puddle.
Imagine you buy a great fashionable jacket for the winter. You pay a lot of money for it, but you're willing to invest if it's worth it. Well, the same goes for influencer marketing! You need to know if your efforts and budget spent are worthwhile. If not, you might end up with a beautiful jacket, but no money for a nice hot chocolate on the side (and that's really sad).
By measuring ROI, you can identify which influencer campaigns are working well and which ones could use a little push, or even a permanent stop. It's like taking the pulse of your influencer marketing strategy to see if it's healthy or needs a visit to the doctor.
And let's be honest, who doesn't like to see their KPIs racing in the right direction (that of their goals)?
KPIs are the performance indicators that help you understand whether your influencer marketing campaign is a hit or a miss.
Among the important KPIs to consider are the number of views, engagements (likes, comments, shares), clicks to your website, and of course, the number of conversions (those precious moments when users take action and buy your products or services). Finally, consider also the Earned Media Value generated.
Imagine you are invited to a trendy party and everyone is talking about your latest post on social networks (Instagram, TikTok...). Well, it's kind of like you're the center of attention of the party, and that's worth gold!
Imagine you are a passionate farmer who plants seeds in his field. You wait patiently for those seeds to grow, bloom and give you a good harvest.
Well, the ROI of an influencer is a bit like that.
Take the total value of the benefits generated thanks to the influencer (visibility generated, awareness gained, sales made, new customers acquired, etc.) and subtract the total cost of working with the influencer (influencer compensation, production costs, etc.).
Then, divide all that again by the total cost of the collaboration with the influencer and multiply by 100 to get a percentage.
The calculation of the ROI of an influencer is therefore :
ROI of an influencer = [(Benefits - Cost) / Cost] x 100
That's it, you have the ROI of your influencer marketing!
The ROI you can expect from an influencer marketing campaign depends on many factors. It's a bit like asking us how many likes you'll get on your next social media photo (Instagram, TikTok...) on which you plan to pose with your cat in Christmas outfit.
The ROI will depend on the quality of the influencer, their average engagement rate, their followers and your target audience, the relevance of your content, the time of day you post it, and many other elements. It's important to test, analyze the results and continue to refine your strategies and partnerships with your influencers.
Influencer marketing is an ever-evolving journey, but with perseverance and a good dose of creativity, you can reap the rewards (or rather the numbers)!
However, to give you an idea, for every dollar brands spend on influencer marketing, they get an average ROI of $5.78 (according to Influencer Marketing Hub).
Keep in mind that every influencer campaign is unique, so tailor your calculations based on your goals and the specifics of your business and product.
When it comes to influencer marketing campaigns, evaluating the ROI can be a bit more complex than other forms of marketing.
Here are some additional factors to consider when evaluating the ROI of an influencer marketing campaign:
1. Look beyond vanity metrics: Influencer campaigns often generate a lot of likes, comments, and shares, but it's important to dig deeper to determine how these engagements are impacting your business. Focus on metrics such as website traffic, conversions, and sales to get a more accurate picture of the campaign's ROI.
2. Use unique tracking links: Use unique tracking links to measure the impact of the influencer campaign on website traffic and sales. This will allow you to track how many clicks and conversions were generated from the influencer's content.
3. Consider the cost of product gifting: If you're providing free products or services to the influencer as part of the campaign, factor in the cost of these items when calculating the ROI.
4. Evaluate the long-term impact: Influencer campaigns can have a lasting impact on brand awareness and customer loyalty, so it's important to consider the long-term impact of the campaign when evaluating the ROI.
5. Compare the ROI to other marketing channels: Compare the ROI of the influencer campaign to other marketing channels to determine if it's a cost-effective way to reach your target audience
Overall, the key to evaluating the ROI of an influencer campaign is to focus on metrics that directly impact your business, such as website traffic and sales. By using unique tracking links and comparing the ROI to other marketing channels, you can determine the effectiveness of the influencer campaign and make informed decisions about future campaigns.
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