When influencers first emerged on the marketing scene, data to assess their effectiveness was scant. Over the years and with the rise of affiliate links and discount codes, the industry has matured enough to make partial measurement of return on investment (ROI) readily available.
Influencer Intelligence’s latest report, ‘Measuring the Effectiveness and ROI of Influencer Marketing’ explores the impact brands have seen on their influencer marketing ROI efforts and the challenges they face in measuring them.
According to the report, 63 percent of marketers believe their influencer marketing strategy is effective in demonstrating ROI for their brand; 8 percent admit their approach doesn’t demonstrate clear ROI.
Sixty-six percent of respondents agree that while they can see which channels, in particular, are having the most impact for their influencer collaborations, they’re unable to equate this to sales or conversions. Separately, the report found that 46 percent can demonstrate the impact influencer marketing has upon incremental sales.
Over half (52 percent) agree they can quantify the ROI of each individual influencer they work with, an unsurprising fact given the data that unique URLs and social media swipe-ups afford brands today.
Thirty-five percent of respondents agree they’re unable to access influencer-owned data for their ROI calculations. Several experts that Influencer Intelligence interviewed for the report mentioned the challenge of obtaining campaign metrics from influencers directly, either due to push-back or reluctance from talent and their agents.
Despite this, it’s interesting to note that 60 percent of marketers use campaign analytics provided by the influencer as a method for tracking effectiveness. But as the report notes, for measurement to be effective, it needs to be a collaborative effort between the brand and influencer. The brand needs data transparency on the influencer side, something marketers are struggling to obtain. Some experts advocated for the use of campaign management platforms that enable brands to manage multi-tiered campaigns in one place.
The experts lacked consensus on whether influencer marketing produced short-term or long-term ROI, but as the report suggests, the answer lies in whether a brand’s goal for the partnership is awareness and consideration or driving sales.
“If the goal is sales, you can give the influencer a unique trackable link to include in their content and the sales from that influencer can be quite obvious. But brand awareness from an influencer marketing campaign is a huge snowball effect. Ideally, you will be working with more than one influencer, and you gain brand recognition by increasing familiarity with your brand, so it is using a number of influencers over a period of time, such as three to six months, that will achieve this,” said Unsah Malik, author of The Ultimate Social Media & Influencer Marketing Guide.
Regardless of the outcome being measured, a brand should strive to demonstrate ROI over the long- and short-term. The long-term measurement should help a brand see how influencer marketing is performing against other digital marketing channels. The short-term view considers metrics such as sales and revenue on a campaign basis.
The goal for any influencer collaboration is that the impact extends beyond a single post. That was the case when travel influencer PaperBoyo posted an image for Lego, which was so successful that Instagram’s owned profile shared it, catapulting it to internet fame.
To gain an accurate reading of ROI for an influencer collaboration, metrics must be meaningful. Traditional engagement metrics such as comments, likes and content shares remain the most popular metric for measuring the success of influencer marketing, used by 84 percent of respondents. Sixty-five percent track traffic delivered to the brand site while 55 percent track impression data.
Forty percent say they’re using affiliate links within their measurement approach, while 44 percent use URL tracking to see how their influencer campaign is performing in Google Analytics. Additionally, 32 percent of respondents are using discount codes to track influencer ROI, citing the sense of urgency they create among an influencer’s audience as the primary benefit.
Tom Bourlet, marketing consultant at Bourley Consultancy, cautions against investing in influencers for the sake of it. He notes, “Each campaign should be treated as completely unique, you can use your knowledge and experience from other campaigns to help shape the new one, but you shouldn’t have a set of rules that cannot be adapted each time.”
Another way that metrics become more meaningful is when they can be compared with other data. For Jennifer Martin, content and social media marketing, Sony Electronics, that means seeing how a post did versus the average views an influencer has been getting for the past two months, versus the average for all of that influencer’s sponsored content.
The report also found that 21 percent of marketers have been working with influencers for more than five years, nearly 25 percent have been doing so for 12 months and another 21 percent have been partnering with them for one to two years. Over half (52 percent) of marketers are working with 10 or less influencers.
As marketers move into the ‘next-normal,’ there’s a huge opportunity for them to tap into the power of influencers yet several have yet to acknowledge this—just 29 percent believe influencer marketing is an intrinsic part of digital marketing ROI calculations. For influencers to play a larger part of a brand’s digital ROI, marketers must scrutinize how these partnerships are faring against other digital marketing investments.