Influencer marketing is a fast-evolving part of the digital marketing sector. A great number of companies have already put effort into the implementation of this strategy.
Similarly to the growing popularity, the budgets allocated for collaboration with influencers grow as well.
Organizations claim that influencer marketing brings plenty of benefits. For example, drawing and winning new customers of higher value.
Indeed, customers themselves admit they place highly the opinion of their beloved peers. As a result, consumers are more likely to purchase a recommended product.
For that reason, the spend on influencer marketing increases. Subsequently, companies demand from their marketers to indisputably prove the gains of working with influencers.
This is and the main challenge for many professionals to precisely calculate influencer ROI.
Can it really be that difficult to calculate ROI? Why are many companies struggling with estimating the actual value an influencer can attribute to a brand?
A simple mathematical formula can reveal ROI. The problem, however, is the complex evaluation of the current value of an investment. There are several reasons for this event.
Even though the end goal of all marketing efforts might be sales growth, the individual campaign’s objectives are diverse – from increasing brand awareness to website traffic generation.
Because of that, the value gained at the end of the campaign cannot be concluded. Due to this fact, an established and proved procedure for ROI calculation is missing.
Influencer marketing is a relatively new practice to many brands. It completely differs from traditional advertising approaches, as well as other digital marketing tactics. For that reason, it is irrelevant to apply traditional techniques for ROI estimations.
Marketers must use and rely on particular metrics and data insights about influencers, which speak for their performance. However, it is often a tricky task to acquire such information.
In such cases, marketers often count on analytics screenshots provided directly by the influencer itself.
Such metrics are important for tracking the results of a certain campaign and calculating ROI based on them. They can present the actual value attributed to a brand by an influencer.
Another challenging aspect of determining influencer ROI is the fact that all influencers are different. In other words, all of them perform individually.
There is no one-size-fits-all approach when working with content creators. ROI is highly depending on the choice of the influencer.
Their ability to convert visitors into paying customers generates profit. For that reason, ratios such as reach efficiency rate, conversion rate, and audience fit are crucial when it comes to ROI calculations. These metrics can show what type and how much value is created with the campaign.
Influencer marketing ROI measurement is yet to attain a clear definition in the upcoming prospect. For the time being, however, there are procedures more successful than others in evaluating the influencer value. All that marketer needs is detailed data insights.
If you struggle with measuring influencer ROI, make sure to download our free E-book. It provides information about ways to calculate the value created by an influencer, as well as much more insights into Influencer Marketing.