How to Calculate Influencer Marketing ROI

Influencer marketing is one of the fastest-growing marketing techniques. Brands face one of the biggest challenges when it comes to strategizing around these types of campaigns: how to measure influencer marketing ROI.

These are legitimate concerns. However, there are many myths about how to calculate influencer marketing ROI.

These obstacles can sometimes prevent companies from fully adopting influencer marketing strategies.

Companies must allocate funds to support successful influencer marketing strategies.

When it comes to sponsored posts, social media influencers will charge a fee for working with a brand.

Each side will negotiate the cost of the partnership based upon a variety of factors including the social reach and type of sponsored content that they produce, as well as how long they plan to promote the brand.

How can marketers determine their influencer marketing ROI for their campaigns?

Before setting the budget, marketers need to be aware of all costs associated with influencer marketing.

As with all things, there will be hidden costs. These can impact both the return on investment and sponsorship fees.

We’ll be discussing hidden costs that could impact your Influencer marketing ROI in this article. So you can determine the budget that is appropriate for your next influencer marketing campaign.

The Formula for Influencer Marketing ROI

The return on investment is usually expressed as a percentage.

For example, let’s say a company spends $10,000 on an influencer marketing campaign that continues to generate $20,000 in revenue.

This will lead to a 200% ROI.

This is a clear indication that the influencer campaign had a positive return on investments and can be considered a major success.

Calculating influencer marketing ROI can be difficult, but it is possible. This example is simple.

Brand Awareness or Direct Response?

When launching an influencer marketing campaign, one of the most important things you can do is to set your goals.

How you measure your success will depend on what goals you have. Campaign results are an important part of measuring your return on investment.

Your general goal will determine the KPIs of your influencer marketing strategy. In general, the goals of influencer marketing fall under two categories: brand awareness and direct response.

Brand Awareness

Your company’s brand awareness is the degree to which customers recognize your company. This can be harder to measure than direct response campaigns.

Because company sentiment and company lift can be difficult to quantify, this is why. Many companies require costly branding surveys or agencies to establish brand awareness.

Brand awareness can be measured by many factors, including social reach, engagement, and website traffic.

Social Reach

Your social reach will be determined by the number of followers and subscribers you have on your social media channels.

To determine the influencer’s total followers and YouTube subscribers, you will need to add their Instagram followers and YouTube subscribers to your sponsored post.

Impressions

Social media impressions are the number of people who have viewed the post. Impressions are a useful metric to determine the reach of a campaign and are preferred over the following.

You will be able to view impressions through authentic analytics platforms specific to each social media channel. You can view Instagram insights, for example.

Engagement

The engagement rate will measure how active the audience is in interacting with the post on social media. This is how many people have seen your content.

For social media engagement, the KPIs are likes and dislikes, comments, shares, and shares. These KPIs can include mentions and hashtags, follower growth, direct messages, and mentions.

Direct Response

Direct response refers to a specific action taken by a user in response to your influencer marketing campaign. Your sponsored post should contain a call to action to encourage users to take action in influencer marketing.

Your KPIs could be signups or downloads or sales depending on what service or product you are using.

Purchases

When it comes to measuring return, the best indicator is how many people buy your product from the social media ads.

It is possible to analyze product sales in detail. You can examine things such as average order value, revenue, and cost per acquisition.

Sign up

Sign-ups are when someone submits their personal information to create a profile or become a member or subscribe to your newsletter.

Click-Through Rate

The click-through rate refers to the percentage of people who click on the link suggested in the promotion post. The user will be redirected to a URL by clicking this link. They’ll then be encouraged to sign-up for something or to purchase your product.

Downloads

Downloads are important if your service requires that someone downloads it to their computer or phone.

What is the Cost of Influencer marketing?

To calculate your influencer marketing ROI with confidence, You’ll need to calculate the cost of your influencer marketing campaign.

Originally published on The Tech Trend