Any influencer marketing to be effective must be authentic and trustworthy. Influencer marketing leverages everyday people who are trusted by their audiences and have the ability to move them to action. calculate ROI of Influencer Marketing is one of the key factor in it.
Influencer Marketing Return on Investment (ROI) is simply understanding your returns against the investment you have made in this specific channel of marketing either via an Influencer Marketing Platform or Agency. An analysis by AudienceBloom says that influencer marketing delivers the 2nd highest ROI out of all digital channels. Research by Nielsen Catalina Solutions found that influencer content outperformed traditional digital ads across the board, delivering 11X higher to calculate ROI of influencer marketing annually.
The study demonstrated the long tail effectiveness of influencer blog posts. The effect of the campaign remains even after the campaign has been concluded, the study concluded that the ROI of Influencer marketing doubled in the 3 months following its conclusion. In this article we will also look how to calculate media value or TMV of Influencer.
Measuring the campaign result:
Any influencer marketing campaign strategy must have an appropriate plan for measuring the level of success the brand has had in reaching its audience with the help of an influencer. This is based on the goals that we have talked about before in this paper. This will help in determining whether or not the brand has achieved its objectives or not. The following key metrics are important for measuring the influencer marketing strategy success:
- Engagement: This includes various interactions like Likes, Shares, Comments, Retweets, Mentions, Direct Messages, and Reposts on channels like social media, blogs, and forums.
- Reach: How many people are actually seeing the content your influencer is sharing by looking at the overall number of views.
- Resonance: The actions completed by the audience members after they interact with the influencer’s content involving the brand.
- Brand awareness: It can be measured quantitatively- direct traffic and social engagement or qualitative- social listening and awareness surveys.
- Clicks: The number of clicks to the content
- Conversions: It can be calculated through URLs (such as discount codes found on an influencer’s social media account by dividing the conversions by an overall number of visitors.
- ROI: Dividing the return by the cost of the influencer marketing investment.
- Follower count: Tracking the increase/decrease of the number of social media followers over time to see if the influencer is helping to boost the subscriber count.
Wobb – our Influencer Marketing Platform, assists brands in measuring their campaign ROI effectively, via metrics like clicks, reach and conversions.
Calculate Total Media Value (TMV) and ROI of Influencer Marketing
Measuring the success of the content is an important factor to be considered after the campaign has been run. It may sound daunting but it is not that time-consuming or mind-numbering task. As discussed above we know what we have to measure.
The following are the steps to calculate the Total Media Value TMV and ROI of the social content of Influencer:
Step 1: Roll it up
Place the numbers collected into a spreadsheet or any similar tool.
Step 2: Turn the numbers into money value for media value of Influencer
Use the numbers to calculate what it would have cost to reach that amount of engagement using traditional advertising using the standard media and content production rates. Calculate what it would have cost to produce the content through an inhouse or through a marketing agency. Determining a monetary value for each click, comment and social action the content has received.
Step 3: Calculate the total media value TMV of Influencer
After assigning the values, calculate TMV or Media value of Influencer as follows:
Multiply the money value to:
- the views by the number of views
- to engagements by number of engagements;
- social actions by the number of social actions and so on and so forth.
Add them together to get the production cost which is equal to TVM. You can also use a TVM calculator.
Step 4: Calculate ROI of Influencer Marketing
The ROI is calculated as subtracting the money amount on the social content marketing campaign from the Total Media Value gives you a close idea of your ROI from social content.
To be able to determine an actual Return on Investment (ROI) & media value of Influencer the brand will need to assign a monetary value to each additional conversion. This is clear-cut in the case of something like sales made but is more intangible for quite a few other types of conversion. The brand will need to decide how much each extra “item of conversion” is worth to it, for example, what is the financial worth of that additional email address you obtain? This is how you can calculate ROI of Influencer Marketing.
Some of the Intangible aspects which are essential for ROI measurements , TMV of Influencer and the way to measure/study them are as follows:
Growth in your followers
A target is set for a certain number or percentage in amplification of the reach. The content shared by the online influencer is used to drive people back to your social media account, with these people, in turn, following you. An online fan base like a Facebook group can also be used, the members of this group may not pay directly to your services but add buzz and conversation to your group activity.
For the calculation of ROI, the brand needs to determine how much an additional follower is worth to the brand. It can be on the basis of the saving in additional advertising it would otherwise have cost or in case we have sufficient data we can also determine what the lifetime value of the follower will be.
For the companies that use influencer marketing to bring their brand to the public’s attention. Their main aim is to create just an awareness and not any extra income. In case some post goes viral splashing the brand in front of a huge number of people. Metrics that can be used to determine the effectiveness of the influencer marketing on the brand includes the additional traffic to a particular web page or landing page, the number of new online subscribers, the growth in your followers and the number of times your brand is mentioned online, as a result of these posts.
We can also use subjective data like reading online comments referring to the brand, sentiment analysis for the product and if the comments demonstrate the positive digital image for the brand.
Traffic to a specific landing page
Often the company sets a goal to increase traffic to a particular landing page. This can be a page promoting an event or another form of offline activities. If the company wants to find a numerical result for its ROI, it will have to come up with an approximate notional value of the worth of a visitor to the particular page it wishes to funnel them in a campaign.
When the objective is to receive information from visitors to the specific website. This way we are trying to not only make the visitors read the information on the page but also fill in some information. To determine your ROI you will need to decide how much the completion of the form is worth to you.
Growth in the users of the product
Like most of the SaaS offerings if the product or service works on a subscription model the main objective is to build up an ongoing relationship with the new users. A one-time sale is not the objective. If your influencer marketing leads to increased paying subscribers for your product or service, it is very easy to work out the worth of a customer, and in turn, the return on your marketing investment distinguish which visitors to this page (who in turn fill in the form) arrive as a result of a particular influencer marketing campaign.
Signups to a newsletter/subscriptions
This is a specialist type of form that online visitors fill up, it is to sign up the services in the form of a newsletter or some subscription. Since people are not very willing to share their email Id with anyone, in case they share it with you then they consider your services to be important and would like to engage with you. These people will have more brand affinity than social media followers. These new subscribers can have a higher lifetime value to you than a new social media follower.
This is the holy grail for influencer marketing. There might be a time lag between the campaign and the actual increase in sales and it is even possible that the sales are affected by the campaign a long time after it is open. This is the easiest form of conversion to determine the ROI, as we know the precise figure that the sale is worth. The brand can also easily distinguish the sales specific to a campaign.
Some more metrics for measurement of conversion:
While some metrics like number of followers or engagements connected to the post, some of the other types of conversions are not so clear. This becomes even more important when we are distinguishing between multiple influencer campaigns. Without these factors, it will be tough to tell if a particular campaign generated increased sales or whether it was for some other reason. The following methods can be used to give a clearer picture:
Tracking some form of correlation
The easiest way to measure, the company would connect some events with the next stage of conversion.
Using traceable links
A traceable link can be used to keep a track of traffic coming from the influencer’s effort. Each influencer can be given a traceable link like a URL directly to the page of the brand to measure the traffic sent by the influencer to calculate TMV of Influencer.
Using conversion pixels
A conversion pixel can be set up on the website and will record the people who may visit the site due to the content of the influencer and not by the link of the influencer. Some sites record 40% of traffic coming this way which might have remained untracked given the dependability on the traceable link alone.
Providing promo codes
Customized promo codes for different campaigns can be set up to reach the efforts of the campaign. These promo codes may be of a discount. Every time a sale is made using that promo code we know the exact campaign it comes from. Consumers love a bargain and while considering a purchase a promo code may be enough incentive to encourage them to finalize the transaction. Giving an expiry date to the promo code also helps.
Creating a hashtag campaign
A specific hashtag can be used to tailor the social media campaign. The brand can then tally uses of the hashtag as part of the influencer campaign.
Lastly, above all what matters is the quality of your influencer marketing campaign and the placement done in terms of the time of the day, occasion, etc. These metrics change from product to product and influencer to influencer. Wobb, which a leading influencer marketing platform, helps you identify the right influencer as per your need in an automated manner and minimal effort while ensuring optimal quality and effectiveness of the campaign.