In this digital marketing era, where everyone relies on social media, modern influencer marketing strategy significantly affects businesses. Companies and brands run influencer campaigns to increase sales and reach. About 31% of social media users find new products through influencers. However, measuring the true ROI of influencer marketing remains a challenge.
In this blog post, you will learn how we can measure influencer campaigns' return on investment and impact and insights into effective influencer campaigns.
What is ROI?
ROI (Return on Investment) is the metric used to analyze the profit of an investment. It is also used to measure the profit of different investments or to compare return on investment. In marketing, it is used to measure the profit of a campaign as compared to how much you invest in the campaign.
What are Influencers and their Impact on Marketing?
An influencer is a person who has a great, committed audience on YouTube, Instagram, or other social media channels. Influencers are not only promoting products, but they are also revolutionizing financial service brands.
Statistics show that brands spent $30.81 billion throughout 2023 on influencer marketing campaigns. Influencers are the game changers today as people trust more on them as compared to traditional campaigns. Choosing the right influencer who is connected with your desired audience can make a brand or product viral.
Benefits of Influencer Marketing
A brand or a business can get more benefits from influencer marketing as compared to other marketing tactics:
The key benefit of this campaign is that influencers can create better awareness among the target audience with personal use and, as a result, more reach, visibility, and leads.
As people trust more on influencers, they can engage and build more trust in the brand, which improves brand ROI.
Businesses just have to pay for the influencer, which is more economical than other traditional advertisements.
Measuring ROI From Influencer Marketing
To measure the true ROI of influencer marketing, you have to gather some metrics about the campaign:
The first metric is the reach of the campaign. It shows the views, impressions, and social listening.
Engagement is another important metric. It shows the interaction of the campaign likes, clicks, shares, and saves.
The final metric is conversion, which shows how many people clicked on links, brand traffic, sales, and final purchases.
Many social media analytic tools can give you accurate data about these metrics.
Finally, after getting these metrics, measuring the true ROI is easier. It gives the value you get from the influencer marketing campaign.
Set a monetary value for your marketing campaign gains by dividing the campaign cost and then multiplying it by 100 to get the final ROI in percentage.
ROI = (Gain from Investment/ Cost of Investment)×100
For example, if you are spending $1000 on influencer marketing and getting $3000, it would be calculated like:
ROI = $3000/$1000 x 100= 300%
It means you spend $1000 on an influencer marketing campaign, and after evaluating the matrices by analytic tools, you get an idea of the gains, which is $3000. So, the ROI of the following campaign is 300%.
What is a Good ROI for Influencer Marketing?
Setting the exact value ROI of marketing campaigns is difficult. In many cases, companies get remarkable results. A survey of Influencer Marketing Hub shows that the average ratio is 5:1, which means brands get $5 on spending every $1. Overall, an extremely good ROI is 10:1, getting $10 on spending every $1 for the campaign.
Influencer marketing is the most effective way for companies to get more targeted reach, leads, and sales. To get the true ROI, brands must collect the exact data from metrics like reach, engagement, and conversion. Finally, they can get the true value of the campaign's profitability. For more insights and influencer services, subscribe to Xemoto Media now!