There are a lot of articles out there that talk about multiple ways to gauge ROI on influencer marketing spend and efforts. For example, Social Media Week covered 4 ways to measure influencer marketing. Many experts (like Social Media Week) focus on social media engagement and vanity metrics, like likes and shares, to measure a successful partnership. But is that really valuable in today’s competitive influencer landscape?
While there’s no doubt influencer marketing can lead to increased brand affinity and eventual sales through engagement, profitability remains the #1 way to measure ROI. This one key number speaks volumes about the efficacy of a campaign – yes, even in the influencer world.
How to Measure ROI with Influencer Marketing
In all fairness, getting accurate, consistent data from influencer marketing has always been a little complicated due to the traditional third-party attribution model. Here’s how it usually goes...
- You have to rely on proper tracking via UTM affiliate links or coupon codes to determine total sales (or Net Return) from the efforts of an influencer.
- You divide the Net Return by the amount paid to that influencer.
- Once you have that number, multiply the total by 100% and you have your calculated return-on-investment using profitability as your measure.
For example: let’s say you have three influencers running campaigns for you. Below is a chart of their cost, net return, and ROI.
Obviously, the ideal scenario would be that your influencer returns 100% or higher. Meaning you’ve completely recouped your investment with them and are seeing profit from your efforts.
In this scenario, Dylan is your top performer. Allison also brought in a profit for you. And JC performed at a loss. You would likely monitor these results and, over time, make business decisions based upon their continued performance.
It may not be as fancy as counting clicks, likes, reactions, and mentions, but at the end of the day, as a marketer for a company promoting its brand through influencers, you have to be able to show ROI in a simple, clean way.
Increase Data Reliability with First-party Tracking
Measuring success with a third-party attribution model is tricky. Marketers today are finding ways to migrate their influencer marketing to simple platforms which use first-party attribution. And soon, third-party tracking will no longer be an option as laws evolve and consumer privacy gets tighter. That’s why making the switch to first-party tracking is a must-do now for brands who rely heavily on digital marketing.
With first-party tracking, data comes in directly from the campaign to your own e-commerce infrastructure. You don’t need to source information from multiple channels, aggregate it yourself, and hope everything lines up. Data is more accurate, reliable, and consistent.
The leader in this space is Creatable. This platform makes it easy to see important metrics using a simple dashboard. You can count on reliable results plus track all your influencer marketing efforts in one place. And clients report 3 times higher conversions due to processing influencer-related sales directly on your company’s own e-commerce solution.
If you want to save time, calculate ROI easily, and boost sales using influencer marketing effectively, schedule a demo here. We’ll show you exactly how to get you the results you need to support your strategy.
