How brands can boost their influencer marketing ROI
Influencer marketing is a great way to promote products or services and reach out to potential customers. Did you also know that influencer marketing can boost your brand’s Return on Investment (ROI)?
In this blog post, we’ll take a look at how you can use influencer marketing to boost your ROI.
Before we take a closer look at this topic, let's first discuss what ROI is in influencer marketing and how to measure ROI!
What is ROI?
ROI is the key metric that determines the profitability of business expenditure. It measures the specific return on investment directly against investment costs.
You can calculate the ROI using the formula below, where the results are expressed in percentage or proportion.
How to measure ROI from influencer marketing?
1. Set goals
What is your goal of influencer marketing? To increase brand awareness? Or increase sales?
One of the biggest mistakes brands make is not knowing what they are trying to achieve, and then getting unexpected results. Therefore, It's important to set goals so you can accurately measure the effectiveness of your influencer marketing campaign.
2. Determine the key performance indicators (KPIs) most relevant to your goal
The KPIs that need to be measured for the success of your campaign are determined by your goal. Setting an appropriate KPI according to your goal will make it easier to track the information you need when you confirm that you have achieved your goal.
For example, tracking page views and impressions take precedence when your goal is to increase brand awareness. If your goal is to find potential customers, it is most reasonable to measure the number of new email subscribers.
3. Determine what marketing strategy and platforms work best for your goal
Influencer campaigns can be formatted as contests, prizes, discounts, promotional codes, account acquisitions, etc., but must be built to meet your goals. Moreover, different social channels have different levels of participation and analysis software for ROI analysis and measurement, allowing you to decide where to proceed with the campaign.
For example, you can create unique discount codes or links for each influencer and measure the sales generated by each influencer automatically. Check out how you can measure your influencer marketing ROI!
4. Evaluate your expenses
Here is where the I in ‘ROI’ comes in. How much do you plan to invest in the campaign? The budget must include influencer or agency fees, production costs, or fees for any analysis software. We should also consider whether we want to invest more in the campaign or not.
How influencers boost your ROI?
So how can influencer marketing increase a brand’s ROI? According to research, through influencer marketing, brands can earn an average ROI of about $5.20 per dollar invested. This means that you will be able to get an ROI of about 520%.
Influencers can reach thousands or millions of users and help increase sales as ratings increase. Compared to other forms of digital media, the ROI of influencer marketing is almost 11 times higher.
Here are a few ways that you can measure and boost your ROI with influencer marketing:
1. Give Promo Codes
An excellent influencer marketing strategy is to provide promotional codes to influencers for expansion to potential customers. You can then use this promotional code to publish YouTube videos, blogs, or Instagram posts. Followers can then purchase a product or service using the promotion code. An example is how @naomineo, a Singaporean mom influencer, promotes @phshairscience’s product with the promotional codes.
This allows you to measure ROI as well as increase it. If influencer's followers use promotion codes, they will know exactly where they come from. This is a good way to measure how effective influencer marketing methods are.
2. Tracking links
While promo codes are good, many brands like to use them with tracking URLs. In this way, influencer includes both promotional codes and unique URL links to increase the number of clicks to fans and transformations and better track brands. @PewDiePie, a Swedish YouTuber, adds tracking links in the captions of his videos.
The tracking link links with discounts from influencers to unique URLs. Tracking links for promotional code only allows the influencer to monitor both traffic and transformations using Google Analytics, regardless of channel promoted.
Tracking links are also useful for affiliate marketing where the brand pays fees for each sale generated by the influencer. However, many influencers prefer to receive fixed rates because they know that they generate more revenue than are often tracked directly, as well as other benefits such as brand awareness and social engagement.
Hashtags are also a good way to measure social media participation. Influencers use hashtags in social media posts and encourage followers to use hashtags as promoting the use of hashtags helps increase ROI.
Brand hashtags are a subtle way to raise brand awareness. However, brand hashtags are not limited to using brand names for hashtags like the example below!
This will also help you measure the effectiveness of influencer marketing because you can see how many people are using hashtags on websites or platforms like Instagram. This method helps you determine the number of customers who purchased the product because of influencers.
As a form of social media marketing that promotes products and services, influencer marketing can leverage professional-level knowledge to maximize revenue. This is why they cannot be ignored as they have the practical power to influence the purchasing habits of the target audience.
But the challenge is how to find these influencers for your business and also analyze and measure different ROI across social channels. For this, we have the exact tools and resources that you need. Reach out to us or sign up for a free demo of our influencer marketing platform!