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How to Measure ROI in Influencer Marketing

The return on investment for influencer marketing has reached levels much higher than those of returns on traditional marketing techniques. It may not always be easy to measure ROI though. Quite a lot of marketers feel that measuring ROI is one of the very complex processes in terms of Influencer Marketing. In this blog, we’ll share tips about how you can efficiently measure ROI.

Set up a separate budget for every campaign

Laying out a whole budget and planning it well for the influencer marketing campaign is very important. However, it is very important to have this plan under a broader marketing plan of the company. Why do this? It makes it easier to compare the returns with the original investment along with comparing the costs of the campaign as a percentage of the complete marketing costs of your brand.  

Set clear objectives for your influencer marketing campaign

Before you launch the campaign, the marketing team needs to plan out exactly what it wants from the campaign in terms of goals. The goals can be improving brand awareness, expanding sales volume, entering a new target market, boosting the brand’s image or enhancing social engagement. However, be mindful of quantifying your goals. In simpler words, if the aim is to increase the revenue, specifying it will be better along with a timeline for it.

Determine the tools to be used for each objective

A variety of tools can be used for every single objective. For instance, with the objective of increasing how much you sell, discount codes can be traced back to see how many they were used for a given purchase. In terms of engagement increase, analyzing the likes and most importantly, comments will give you a very good idea of how well you are achieving the goal of engagement. Google Analytics can be used to monitor website traffic too if your goal is to increase website traffic.

Start calculating!

The general formula for calculating return on investment will remain the same for all types of tools and campaigns: (Revenue from the campaign - investment for campaign) / investment in the campaign. Of course, you can tweak this formula according to the metrics you are focusing on. For example, if you are calculating the ROI for the engagement goal, cost per engagement can be used to gather an idea of the average spending per interaction. This is calculated by dividing the total investment by the total number of interactions (e.g. likes, follows, comments).

Engaging with an influencer marketing agency

Taking the help of an Influencer Marketing agency usually makes it easier to calculate the return on investment (ROI). How does this happen? Well, your workload is significantly lowered down while giving your brand time to focus on other important elements of growth.