How to Measure Influencer Marketing Return on Investment

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How do you know if influencer marketing is worthwhile or whether your influencer marketing campaigns are working for your brand? There are a few ways to measure the return on investment of influencer marketing.

First, let’s unpack what influencer marketing is and what return on investment, or ROI, means. Influencer marketing is a form of marketing that relies on social media content creators.

Brands partner with social media influencers to create content about their products and services. The goal is to convert the influencer’s followers into customers. For example, many brands offer the influencer a special discount code that their followers can use on purchases.

Most of the time, the ROI of an influencer marketing campaign is the financial return that your brand sees from the campaign. The equation for ROI is revenue generated from the campaign minus your initial investment.

For example, if you paid a content creator $2,000 for an influencer marketing campaign and the campaign generated $5,000, the return on investment is $3,000.

The ROI of an influencer marketing campaign can be difficult to measure without the right strategy. You need systems in place to track the amount that people spend on your products due to influencer posts.

However, there are other measurements of influencer marketing return on investment that aren’t about financial gain. For instance, maybe you’re partnering with an influencer to boost your engagement or increase your follower count.

Depending on your desired outcome, there are multiple key performance indicators (KPIs) to track to determine the return on investment of your influencer marketing campaign.

You can track the following KPIs:

  • Engagement Rate: Did your likes, comments, and shares increase during the influencer marketing campaign?
  • Follower Count: Note how many followers you had before the campaign started to see how many new followers the campaign gets you.
  • Reach and Impressions: Are more people seeing your content now?
  • Brand Awareness: Did the campaign drive views to your website or other social media channels?
  • Sales and Conversions: Did more people purchase your products due to the influencer campaign?

To learn more about KPIs during an influencer marketing campaign, check out this blog about influencer marketing statistics.

Why is Calculating ROI Difficult for Influencers and Social Media?

Calculating the ROI of an influencer marketing campaign using social media alone is difficult because it’s impossible to know the exact impact of a post. If a content creator posts about your brand and 200 people like the post, it’s difficult to know how many of those people actually purchased your products.

However, there are helpful tools you can use to more accurately track the ROI of an influencer marketing campaign. First, you can provide the influencer with a discount code that they can share with their followers. Most discount codes offer between 10 to 20% off.

You can track how many people make purchases using that discount code to measure the success of the influencer marketing campaign.

Another option is to provide the influencer with a custom link, also known as an affiliate link, that their followers can use to shop. You can track how many people click on the link and how many go on to purchase from your brand.

There are several types of influencers, and some prefer to use discount codes versus affiliate links, or vice versa. The more you work with content creators, the easier it will be to measure which influencer marketing tools are the most lucrative for your brand.

Tracking an influencer marketing campaign can also be complicated if you are running several at once. You will need to track each content creator separately, which can get complicated if you are not organized. Plus, if you are running campaigns across multiple social media platforms, each platform has its own way of tracking metrics.

Additionally, it can be difficult because some of the returns from an influencer marketing campaign are not tangible and therefore, hard to track. For example, a campaign may help raise your brand awareness, but that can be difficult to track with data related to the influencer.

What is Return on Marketing Investment?

Let’s dive deeper into how ROI works in marketing campaigns. Three factors determine the return on investment of an influencer marketing campaign:

  • Cost of investment
  • Revenue
  • Efficiency

The cost of investment is how much you pay a content creator for an influencer marketing campaign. The revenue is the amount of profits generated from the campaign. Efficiency refers to the cost of an influencer marketing campaign versus the cost of other marketing efforts, such as traditional media marketing.

For instance, once you determine how much revenue you generated from an influencer marketing campaign versus how much the campaign cost you, you can measure it against other marketing efforts. You may find that influencer marketing campaigns cost less and generate more revenue than traditional marketing, such as billboards and ads.

You can get even more detailed by evaluating the expenses you avoid with influencer marketing. Since the influencer is creating the campaign content for you, you do not have to pay for production costs.

On the flip side, for a traditional ad, you have to pay the creative team to conceptualize the ad and write the ad copy. Next, you have to pay for the photo shoot, graphic design, and other production costs. That may also include paying models or actors to be in the ad. Finally, you have to pay to place the ad on television channels, in newspapers, or in another medium.

When you compare the cost of an influencer marketing campaign versus the cost of other marketing methods, you’ll see that influencer marketing is much more cost-efficient. A more cost-efficient approach means that your return on investment is higher.

What is the Return Rate of an Influencer Marketing Campaign?

According to Influencer Marketing Hub, the average return rate on an influencer marketing campaign is around $5.78 per $1 spent. However, this can vary by brand, industry, influencer, and campaign size and goals.

A common misconception is partnering with influencers that have hundreds of thousands of followers will bring in the highest return on investment. The truth is that campaigns with micro-influencers, which are content creators with less than 100,000 followers, can be even more lucrative.

Micro-influencers have niche audiences, so it’s easier to get in front of your target audience. They also tend to have higher engagement rates than mega-influencers, so their campaigns can be more effective.

Lastly, since their fees are lower, you can work with several micro-influencers at once versus one mega-influencer. This spreads out your marketing efforts across multiple audiences and platforms.

Track Influencer Marketing Campaigns with Mavely

The easiest way to track the ROI of an influencer marketing campaign is to work with an affiliate marketing platform like Mavely.

Mavely connects brands to content creators and facilitates each part of the influencer marketing campaign. The platform offers trackable links that you can use to measure the return on your campaigns. You’ll know when an influencer’s followers use the link and make purchases right away.

Get started with your next influencer marketing campaign on Mavely today.

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