Despite the fact that the influencer marketing industry has exceeded $10 billion in 2020, nearly 40% of marketers don’t feel confident in their ability to report influencer marketing ROI.
“Between 2019 and 2021, [influencer marketing grew] from 6.5 billion to 13.8 billion U.S. dollars in the three years alone.” – Statista, 2021
Image via eMarketer
Influencer marketing is clearly working, but there is often a critical breakdown between influencer performance and the ability of influencer relationship managers to demonstrate that performance in dollars and cents.
Thankfully, demonstrating influencer ROI doesn’t have to be a mystery. In fact, most marketers that know where to look and how to track key metrics find more ROI than they were expecting. For those marketers, reporting influencer ROI to their boss is an exciting moment.
Understanding the Full ROI of Influencer Marketing
To appreciate the full spectrum of influencer marketing benefits, it’s important to evaluate ROI beyond a 1-to-1 relationship between influencer posts and sales. Conversely, influencers can do more than raise brand awareness or increase brand page likes.
The Marketing Funnel
Image via Single Grain
Many marketers express their ROI using a funnel. In the marketing funnel, the top of the funnel illustrates brand awareness – the moment where consumers come into contact with a brand for the first time. Brand mentions on social media is a perfect example of top-of-the-funnel influencer content.
In the middle of the funnel, buyers know the brand and are considering whether or not to invest in the brand. To build trust, most brands use this part of the funnel to create informative content and nurture connections with their audience.
Influencers contribute to your middle-of-the-funnel by providing FAQ, product launch announcements, and how-to style posts.
The bottom of the marketing funnel is the point at which audience members convert. By conversions, most marketers are referring to closing a sale. But conversions can also represent any form of commitment, such as subscribing to communication (email, SMS, etc.) or RSVP-ing to an event.
Many brands lean heavily on their influencers to drive sales. Limited-items offers, exclusive promotions, discount codes, and affiliate links are just a few ways that brands equip influencers to encourage followers to “act fast.”
Influencer marketers use different influencer types to guide buyers through every stage of the marketing funnel. From this vantage point, positive ROI includes any moment in which a buyer took the next step toward a purchase.
The Age of Information illustrates how much consumers love content. That’s why brands are working as hard as they can to produce compelling content at the sustained rate of consumption.
Due to lockdowns and the economic impact of COVID-19, demand for consumer content is higher than it has ever been.
Image via Nielsen
Brands are not only scrambling to meet this increased demand for content, but they are also trying to keep up with shifts in where people are going to consume content. According to Chief Marketer (see below), social media posts have risen to the top of the list.
Image via eMarketer
Based on this information, one great way to track and report influencer ROI is to quantify how many social media posts your influencers produce in a given period, along with each post’s reach. Each of these posts are valuable brand mentions, and data shows that compelling content resonates with consumers in every stage of the marketing funnel.
Impressions and views help expose your brand to consumers that previously had no idea of your existence. Brand awareness is the first step in becoming “front of mind” with your target audience.
Influencers nurture online communities of people with specific interests and lifestyle preferences. These audiences tend to be highly engaged, and as such, brands that can connect with them can make higher-quality impressions.
When tracking and reporting brand awareness, your best metrics will be an influencer’s follower reach, as well as their engagement metrics and ongoing user-generated content. These numbers represent your reach and help you measure your exposure among audience segments.
“Referral traffic from top YouTube Influencers drove over 80MM product views and 2MM purchases on Amazon alone in 2018.” – Jumpshot, 2019
Some of the best sales numbers at DTC brands come from their influencer campaigns (check out this case study about Tubby Todd’s brand ambassador program).
But it can be difficult to attribute influencer conversions properly without the use of discount codes and affiliate links. With software like GRIN, you can generate these links automatically and allow the campaign data to sync within your dashboard. If you’re tracking these conversions manually, it’s critical that you know where each sale came from.
With a reliable influencer attribution process, tracking and reporting conversions is simple. And your boss will instantly appreciate the boost in conversions, whether they are sales, subscriptions, etc.
Many marketers stop tracking after conversions, but when you stop tracking, you miss out on other valuable ROI data points. The reality is that many of your customers would love to be more than just a customer. These trends have given rise to brand communities, and your influencer can be a key part of your efforts to build a brand community.
Some communities exist on social, and they become forum-style places for customers to connect with the brand and one another. In other examples, brands build communities around full customer advocacy programs.
Either way, your influencer team forms the backbone of your brand community. You can track and report the size and impact of your brand community by recording the number of influencers in your program, as well as brand page followers, post engagements, and group membership (such as Facebook groups, messenger groups, etc.).
How to Measure ROI Based on Your Stated Objectives
Buyers walk through a process – the Buyer’s Journey – to understand what it is that they want/need and which solution is ideal for them. And depending on how you use influencers to guide your audience through the Buyer’s Journey, you’ll have a specific set of goals and KPIs.
Your goals or objectives are what you want to achieve at the end of a campaign – brand awareness, social media followers, conversions, website traffic, and so on.
By contrast, your key performance indicators (KPIs) are incremental milestones that help you get from point A (present) to point B (your ultimate goal). Your KPIs help you track the progress of your individual campaigns and overall influencer program.
The Role of the Influencer Marketing Manager
As an influencer marketing manager, you’re responsible for more metrics than what you will report to your boss.
For example, you’re most likely examining all of the following metrics and more:
- Influencer prospecting
- Influencer activations
- Influencer post frequency
- The number and quality of engagements on each influencer post
- Discount code redemptions
- Influencer link clicks
- Influencer product seeding/commissions
- Types of influencer content
- Campaign-level versus program-level metrics
Your boss doesn’t need to know everything that your influencer program entails. What your boss is most interested in is how influencers are contributing to the company’s bottom line. As such, you will need to align your program goals to the brand’s marketing goals.
If those goals focus on conversions, then your influencer marketing should reflect those goals. The same is true for other common marketing goals, such as increased website traffic and brand awareness.
Based on those goals, you can use metrics from your list above to set relevant milestones (KPIs) to help you reach those goals.
Reporting to the Boss
When it comes to demonstrating ROI to your boss, there are a few things to keep in mind.
First, your boss is most likely very busy. Keep it simple but informative. When preparing to report your results, your ability to summarize key metrics will be essential. If you’re using an influencer relationship management automation tool, you may be able to simply create a view or filter that only presents high-level data.
You can highlight high-level information for each stage of the marketing funnel:
- Top of the funnel
- Number of active influencers
- Number of campaigns and posts
- Size of reach
- Follower growth on your social channels
- Show an influencer post example with post metrics
- Middle of the funnel
- Number and quality of influencer engagements
- Top performing types of content (based on engagement)
- Number of influencer reviews
- Show an influencer post example with top engagements
- Bottom of the funnel
- Link clicks (CTR)
- Show an influencer post example with conversion metrics
If you’re tracking these goals and KPIs manually, you’ll need to figure out a way to consolidate your information into critical highlights.
Second, an aesthetically-pleasing, clutter-free presentation can help your boss see program results clearly. It’s not necessary to be a graphic designer when reporting performance, but your presentation should be “easy on the eyes” so that nothing distracts your boss from seeing how well your influencer program is doing.
Third and last, be prepared to support your report with answers to “how” and “why” your influencer posts are working. By tracking more data than what you’ve included in your report, you can answer any clarifying questions with ease and accuracy.
Incorporating Influencer Management Support When Reporting ROI
What is Influencer Management Support?
Influencer management support is a collection of tools and team members that help you streamline your influencer program.
Managing your influencer program requires a significant amount of data tracking and relationship management. The better you can manage your influencer relationships, the greater likelihood of your influencer campaigns achieving more authenticity.
Why is Influencer Management Support Important?
When you decided to manage influencers directly, you most likely noticed a major increase in campaign results. That said, using manual tools is not sustainable for the long-term.
Any way that you can “work smarter not harder” will make your program more manageable. The tools that you add to your influencer management support can make your program scalable and benefit your bottom line.
Young influencer programs often include one influencer relationship manager and a spreadsheet. Those managers explore social media channels for ideal influencers. This manual approach will work initially, but doing it well takes a lot of time.
As your program grows, you may need to add team members and automation tools to manage your influencer relationships and campaigns properly.
How Do You Track Influencer Management Support Success?
A key component to your influencer marketing reporting is pointing all the ways that your current support system either improves or complicates your influencer program. Without this information, your boss won’t know how to help you become an even better success.
The best way to measure the success of your influencer management support is to compare the number of work hours to campaign results. Cash expenses (such as commissions, product costs, etc.) are easy for your boss to understand, but labor hours may not be as obvious, especially if you work on salary.
The right tools will significantly lower your labor while maintaining or increasing your campaign results. When you are ready to invest in automation, you want a platform that will make your life easier without compromising the success of your influencer management process.
Tips for Maximizing Your Influencer Marketing ROI
As you compose reports for your boss, you may decide that you want to “spice things up” with your program. Here are a few quick tips to try new things and take full advantage of your influencer team.
- Explore new social channels. You can start by asking your current influencers about their activity on other social media platforms. Or, you can find out what other channels members of your audience like to use.
- Try new types of content. AR filters, ephemeral content, and vertical videos are just a few of the latest, popular content types that consumers enjoy. Most high-performing influencers are well-acquainted with these social media updates.
- Integrate influencer content with other marketing mediums. Many brands are using repurposed influencer content to improve paid ads, email newsletters, and more.
- Try cutting edge tactics like influencer whitelisting or dark posting. Whitelisting and dark posts work well when you have a few influencers with whom you have a strong relationship.
- Outsource your social media content creation to influencers. This approach can lower your production costs and improve the quality of your social media content.
- Ask for influencer feedback on product improvements and best practices. As expert consumers, your influencers have unique insights that can help you improve and personalize your products or services.
- Create experiential marketing campaigns and include your influencers. Live events, product launches, pop-up shops, and competitions are just a few examples of ways that influencers love to join experiential campaign events.
Reporting influencer performance to your boss doesn’t have to be intimidating. If you know how to demonstrate the many ways that influencers contribute to company growth, you will actually feel excited to “show off” what your influencers can do.
More importantly, reporting your performance will help you advocate for better influencer relationship management support tools, such as new team members and automation software.