In the present times, businesses and brands are always on the lookout for creative ways to connect with their customers. Amongst the plethora of options available, influencer marketing on social media is emerging to be the new-age trend.
An influencer usually associates with a brand on social media either via paid collaborations, barter deals, or referral-based programs. Any brand influencer marketing campaign comprises these three major elements. While earlier measuring the ROI of the strategies was neither relevant nor feasible; over the years, the analysis of social media influencer marketing campaigns is turning smart and measurable due to digital adoption. As per Influencer Marketing Hub’s report, 67% of global brands nowadays measure the ROI of their influencer marketing campaigns. In this digital-driven world, there are various influencer marketing agencies backed by technology, especially those driven by Artificial Intelligence that help brands map their campaign ROI efficiently and seamlessly.
ROI measurement in influencer marketing on social media
For any brand, ROI understanding and measurement are not just limited to revenue or lead generation. It extends beyond earning sales and encompasses various KPIs. However, the first step to measure the effectiveness of the influencer marketing strategy is to clearly define the campaign goals.
While the success parameters vary as per the brand’s objective and the campaign, they usually consider the Key Performance Indicators (KPIs) of visibility, engagement, and revenue generation.
Visibility: The pivot criteria for ROI evaluation of influencer marketing campaign on social media
While measuring the impact of any influencer marketing strategy, brand visibility is one of the primary objectives for brands. Any business wishes to tap both its existing target audience as well as the prospective customer base via its campaign. Garnering visibility helps brands in fostering connections with their existing audience base and in tapping the unexplored markets as well. This eventually paves the way for customer satisfaction and retention.
Hence, the more are the secured impressions, followers, and views, the more will be the visibility and reach of the campaign. As reported by Influencer Marketing Hub in its research, 27% brands consider reach as the KPI to measure the effectiveness of the campaign.
Engagement: The essential element for ROI measurement of influencer marketing strategy on social media
Generating engagement is another important goal for brands while evaluating the ROI of influencer marketing campaigns. The more the number of likes and comments versus the followers, the greater will be the engagement.
According to Influencer Marketing Hub’s study, 32.5% brands at the global level are interested in engagements via the campaign. 39% brands that were surveyed also consider this factor as the essential element while evaluating influencers that will associate with them.
Garnering sales: The ultimate objective for brands
The very mention of the term ROI evokes flashes of sales and revenue generation. Measuring the impact of the influencer marketing campaign with reference to the revenue earned against the amount invested is challenging yet essential for any brand.
While the influencers do include the link of the app or the website in their social media bios and content that they post, it is the usability of the promo codes that actually help measure the Return on Investment of the campaign. These are customized and help track the impact of the campaign by monitoring down-the-line purchases driven by the influencer marketing strategy. The influencers help spread the word about the promo codes to be used by the consumers while purchasing the product or availing the service.
An effective influencer marketing campaign is one that helps boost the organic growth of the brand. The organic growth of the followers is gauged by the engagement and the reach of the social media posts or curated content. Understanding and evaluating ROI is an integral process for determining the success of the influencer marketing strategy. Measuring the Return on Investment is indeed important for any brand to analyze the investment in the influencer marketing campaign versus its outcome. However, the impact is dependent on the campaign goals as well as the sector our business is present in. Sales generation is considered as one of the essential success parameters but brands usually prioritize gathering visibility and earning engagement amongst the extensive influencer base as the important KPIs since these outcomes eventually pave the way for customer loyalty and retention.
The article is authored by Sumit Gupta, Founder Viral Pitch & Whizard.