When Daniel Wellington launched a viral influencer marketing campaign, the world was in awe of it. The brand has managed to engage thousands of influencers over the last couple of years, who promoted Daniel Wellington’s watches and fashion jewelry by sharing content under a branded hashtag.
Daniel Wellington’s influencer marketing campaign is still going on now, with over 2 million featured posts on Instagram:
This case is one of the most inspiring influencer marketing successes, which has prompted other companies to invest more in this marketing strategy.
Currently, according to the report by the Digital Marketing Institute:
- 73% of marketers have a budget set aside for an influencer marketing campaign
- 67% of brands are already collaborating with influencers to promote their products
- 71% of marketers also believe that influencer marketing is useful for building brand awareness
The same report also claims that companies spend up to $50,000 on influencer marketing campaigns, which is a considerable amount of money.
Indeed, companies set such big budgets because influencer marketing has a good ROI. Digital Marketing Institute indicates that influencer marketing campaigns can earn up to $6.50 for each dollar spent.
Calculating the ROI of an influencer marketing campaign is a complicated process that we will take a look at today.
Let’s discuss three basic steps that will help you find the ROI and measure the success of influencers’ content for your joint campaigns.
1. Define Your Goals
Measuring the ROI of the influencer content is a goal-oriented task. You cannot measure something without knowing why you’re doing it. Defining a goal will help you understand whether the campaign brings or doesn’t bring you tangible results.
There are three main goals that companies usually set for influencer content ROI:
- Sales. An e-commerce brand Fashion Nova had this goal in mind when it partnered with the rapper Cardi B. As a result, their joint campaign delivered over $1 million in revenue in just one day of sales.
- Engagement. Influencer marketing campaigns based on this goal usually happen when a brand wants to tap into a new niche or market. They partner with an influencer who has a relevant audience they want to target.
- Visibility. Sometimes brands collaborate with influencers when they are about to enter a new social media platform and need to raise brand awareness. For instance, you can work with an influencer on a YouTube marketing campaign to produce content to increase your visibility on the platform.
It is important to note here that your campaign’s goal will impact the content that influencers create for you. The ROI from the content will be the indicator that you’ve reached the goal.
2. Set the Metrics
Let’s talk about the metrics that define the ROI of influencer content.
As we already mentioned, metrics will be the key performance indicators of the influencer’s content, and they are closely connected to the goal of the influencer marketing campaign.
Thus, depending on the goal, there could be different metrics that could help you measure it. Here are a few general examples:
- The number of subscribers or followers gained. This metric can come in handy when the goal of your influencer marketing content is to boost engagement or build brand awareness.
- Pageviews, impressions, and social media mentions. Tracking this performance indicator can come in handy when measuring the brand awareness results from influencer content.
- Engagement rate per piece of content. This is the main metric to watch if your goal is to use influencer content to solely boost engagement.
- The number of sign-ups, email subscribers, etc. You might be interested in tracking this metric if your goal is to improve brand awareness and generate new leads.
- Number of backlinks. Tracking this metric can also be useful if your campaign’s goal is brand awareness.
- Conversion rates, sales growth rate. This metric will be the main one to track if the goal of the influencer content is to help you improve sales.
Keep in mind that you already need to know how you will measure the content’s performance when discussing content ideas with the influencer. Just as with the goal of the campaign, you also need to know the metrics you will use to measure the influencer content ROI before the campaign launches.
It’s also important to add that if you receive content from different influencers within the same campaign, you need to set the ROI metrics for each of them. For instance, you can assign each of the influencers a unique affiliate link or a discount code and use these metrics to measure the ROI.
3. Measure Content Performance
Once you’ve determined the goals, metrics, and you have the influencer content that’s already bringing some results, you can start measuring the ROI.
The first thing you need to take into account is the reach of the influencer content. Anne Graff, a digital marketing specialist and a writer at Subjecto.com, clarifies that content reach is the total number of people who’ve seen your content. This metric should be differentiated from the impressions, as it only shows the number of unique users who viewed and engaged with the content.
The results of influencer content reach will show you the general success of your collaboration with an influencer. And this number can also impact the ROI of influencer content.
Next, go back to the goal of your campaign and the metrics you’ve chosen to measure it.
If your campaign is focused on boosting engagement, the main metric will be calculating the engagement rate. Here’s the formula for it:
General number of post comments and shares/Number of followers the influencer has = Engagement rate
This formula will differ a bit depending on the type of content that the influencer produced for you. For instance, if you’ve collaborated with a writer from popular writing services on an article about your brand that they will publish on their blog, you will have to take into account the following metrics to calculate the engagement rate:
Number of clicks, read-throughs, and impressions/Number of blog readers = Engagement rate
What will the formula for ROI look like if your campaign’s goal is to boost sales and revenue?
In this case, there are several different scenarios.
For instance, if you want to calculate ROI from the number of orders made through the unique URL that influencer content includes, the formula will look something like this:
Amount spent on the influencer/number of orders made through a unique link = Cost per order
You can also calculate the general ROI from the entire influencer marketing campaign using this formula:
Revenue per order/Campaign cost per order = Campaign Profit
The main message here is that the goals of your campaign will define its ROI. The more precise they are, the more accurate your ROI calculations will be.
Calculate ROI Using a Campaign Tracking Platform
Of course, you can calculate ROI manually or using an online ROI calculator, but neither of these approaches will show you the real-time performance of influencer content.
If you want to track your influencer marketing collaboration continuously, you can try a campaign tracking platform.
A campaign tracking platform especially comes in handy if you are working with many influencers on the same campaign and have a lot of data coming in from their content. Such platforms also generate automatic reports to help you see the tangible results from your influencer marketing efforts.
Author bio: Bridgette Hernandez is a professional writer, content creator, and editor at https://subjecto.com/. The texts she writes are always informative, based on qualitative research but nevertheless pleasant to read.