Influencer marketing has become one of the most popular ways to promote products and services in recent years. With the rise of social media, influencers have become powerful voices that can sway the opinions of millions of people. Brands have recognized this power and are increasingly turning to influencers to promote their products and services.
Yet, as influencer collaboration becomes increasingly commonplace, a staggering 62% of marketers report difficulties in quantifying the ROI of these partnerships. This challenge stems from the complex nature of social media metrics and the indirect impact of influencer marketing on consumer behavior.
In this guide, we will walk you through the essential points that you need to keep in mind while building and measuring an influencer marketing campaign.
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What you need to know before starting an Influencer campaign
Blindly starting a campaign without understanding the nuances of the platform will always end up in failure. There is no one-size-fits-all approach, especially when it comes to Influencer marketing. However, as a brand, you need to know or learn a few things before starting to collaborate with influencers.
Understanding Your Audience
Before embarking on influencer marketing, a deep understanding of your target audience is essential. Knowing your audience’s preferences, behaviors, and social media consumption patterns can help you select influencers who truly resonate with them. This alignment between your brand, the influencer, and the audience is pivotal in creating authentic connections and driving engagement.
Finding the Right Influencer
The first and most crucial step in building an influencer marketing campaign is finding the right influencer. Not all influencers are created equal, and not all influencers will be the right fit for your brand.
According to Hubspot, one in four consumers bought a product based on an influencer’s recommendation in 2023, and this number is going to increase in 2024. Therefore, it is essential to find an influencer who resonates with your brand, so viewers can relate to your brand.
There are several ways to find the right influencer for your brand. You can use influencer marketing platforms like AspireIQ, Grin, or Upfluence to find influencers in your niche. You can also search for influencers on social media platforms like Instagram or YouTube by using relevant hashtags or keywords.
Once you have identified potential influencers, you need to evaluate them based on several factors, including their audience demographics, engagement rates, and content quality. You should also consider their authenticity and transparency when it comes to promoting products or services.
Fix Your Goal
Before partnering with influencers, ask yourself what you want to achieve. Do you want to increase brand lift, immediate sales, brand engagement, or something else? For a brand looking to increase online engagement, setting KPIs around social media interactions (likes, comments, shares) and website traffic from influencer posts can offer measurable insights into the campaign’s effectiveness.
Your goals should be specific, measurable, achievable, relevant, and time-bound (SMART). Based on these goals, you can fix metrics to measure them.
Fix Your Budget
Fixing a budget for the influencer campaign is the crucial part you need to cover before starting. The cost of an influencer marketing campaign depends on several factors. The type of influencers you engage, your business’s Average Order Value (AOV), and your budget are mutually exclusive.
Let’s say you sell $10 worth of skincare products. Paying $5000 for an influencer means you need to get at least 700-800 customers from them. You should consider the cost of the influencer, the cost of creating content, and any other costs associated with the campaign to measure the proper ROI on your campaign.
What Metrics Should Be Tracked to Measure the ROI of Influencer Marketing?
Measuring the ROI of influencer marketing campaigns can be challenging. There are numerous metrics to track, such as views, shares, reach, reactions, likes, engagement, clicks, impressions, followers, sales/revenue, new customer reach, conversions, customer loyalty, and referrals.
Usually, marketers end up tracking clicks, views, impressions, and conversions. However, except for conversions, the rest of them are vanity metrics, i.e., they don’t generally contribute to the revenue of your business.
That doesn’t mean we shouldn’t track any of these metrics, but what you’re going to track is purely based on the goals you set for yourself.
In influencer marketing, there are two major goals you can achieve – brand awareness and revenue. You can fix whatever metric you want to track based on your preference.
How to Effectively Measure the ROI of Influencer Marketing
Measuring the ROI of influencer marketing campaigns requires a combination of quantitative and qualitative data. You can use several tools and techniques to measure the success of your campaigns.
For each goal I’ve mentioned above, there are a few more important metrics to be tracked. These metrics determine whether a campaign has succeeded or not. I’ll walk you through how you can do this.
You can measure brand awareness by tracking the increase in brand lift, i.e., the increase in brand search volume along with your value proposition. Let’s say you’re selling plus-size t-shirts for women. You partnered with an influencer who talked about having plus size in your brand. To measure the success of this campaign, you need to see if there is an increase in your brand search volume + value proposition.
Another metric people usually track is the organic website visitors to your landing page. Along with this, you can also use geographic data to map how well your influencer campaign worked. If your influencer is popular in South America, you can naturally see an increase in visitors coming from this Geo.
Tracking conversions is the tricky part of any campaign. There are a few ways to do it.
- UTM codes: Usually, e-commerce brands create unique UTMs. It’s a manual process where you will create a unique code for each influencer.
- Coupon codes: Similar to UTMs, you can create a coupon code for each influencer to track the conversions.
- Landing page: A few will go a step further and even create separate landing pages for each influencer.
- Affiliate links: Affiliate links or short links are also a great way to track them.
However, all these ways involve a manual process. You need to create these links or coupon codes, use a URL shortener to shorten the links and share them with your influencers. Then you will track the visitors and conversions in Google Analytics, which is very notorious for tracking data more complex. You can automate this by using tools like Krunch.
How Does Krunch Automate Conversion Tracking?
Krunch is a link-tracking tool that can tell you how many purchases an influencer contributed to your business. By eliminating the manual creation of UTMs and streamlining link sharing with influencers, Krunch offers a more efficient way to attribute conversions to specific marketing efforts. All you have to do is to krunch your product’s URL and share it with influencers. It automatically detects the influencer account in the dashboard and shows how many visitors and purchases were made via the links you shared with the influencer in a single place.
Influencer marketing has evolved into a sure-shot way to gain more popularity and conversions thanks to the rise of different social media formats. Therefore, it is essential to find the right influencer, fix your goal, fix your budget, and track the right metrics to measure the ROI of influencer marketing.
By following the steps mentioned above, you can build an influencer marketing campaign that resonates with your target audience and helps you achieve your business goals. Don’t forget to measure the success of your campaign and tweak it accordingly to achieve better results in the future.