How Can a Business Assess the ROI from Influencer Marketing?
Just a few years ago, “influencer marketing” was barely on the radar. Few imagined that influencers would transform marketing into a powerful tool for reaching audiences in today’s digital world.
As market dynamics evolved, influencer marketing emerged as an essential component in business strategies. Today, brands across industries leverage influencers to expand their reach and deepen audience engagement with more authenticity and relevance.
The industry’s value surged to $21.1 billion in 2023, according to recent reports, highlighting its growing influence in the business landscape. Projections show that influencer marketing will continue to play a significant role, shaping the future of marketing with even greater impact.
Yet, a key challenge remains: measuring the true effectiveness of influencer campaigns. Since influencer marketing often takes time to deliver noticeable results, calculating ROI is complex, leaving brands to balance immediate returns with long-term brand-building benefits.
Table of Contents
- What is Influencer Marketing?
- How Can a Business Assess the ROI from Influencer Marketing?
- Final Thoughts
Unlike most marketing tactics that have clear KPIs, measuring influencer marketing roi success can feel unpredictable, as it depends heavily on audience engagement. However, there are effective methods for assessing the influencer ROI that marketers should consider.
Before diving into the specifics of measuring influencer ROI, let’s revisit the basics and explore what makes influencer marketing such a unique and impactful strategy.
What is Influencer Marketing?
Influencer marketing is the process of business marketing by using influencers for product marketing and services through their social media accounts. These influencers are typically divided into three segmentations:
Nano Influencers (1K–10K followers)
These influencers have a very tight-knit relationship with their audience, often due to their smaller and highly engaged following. Their niche focus means their followers trust their recommendations, making them ideal for brands looking to build credibility in specific communities.
Micro-Influencers (10K–100K followers)
Micro-influencers offer strong engagement and a solid return on investment for brands. Their follower count is moderate, but their audience connection remains personal and influential. This group is perfect for brands seeking a balance between reach and authentic engagement.
Macro Influencers (100K–1M followers)
With macro influencers, brands benefit from a significantly broader reach. However, engagement rates may decrease as their audience size grows, meaning their campaigns might generate more visibility than direct interaction. They are well-suited for awareness campaigns with a large-scale audience.
Mega Influencers (1M+ followers)
Typically celebrities or high-profile online figures, mega influencers are ideal for campaigns focused on mass reach and brand awareness. Although they may not drive immediate sales or downloads, their vast audience helps in building brand visibility. Mega influencers often come with higher costs due to their extensive follower base.
In addition to higher audience engagement, influencer marketing brings a range of other benefits.
For one, it builds trust and emotional connection in ways that traditional ads can’t match. Influencers can foster genuine loyalty within their communities, giving brands a unique advantage in connecting with audiences authentically. While the industry faced challenges in 2018 due to fake followers and inflated metrics, regulations, and advanced tools have since made it easier to detect inauthentic accounts and track real engagement.
That said, influencer marketing can fall short if used only for direct sales rather than for building brand loyalty or awareness. Like any marketing approach, it has its advantages and limitations. Yet, despite these challenges, influencer marketing remains one of the most powerful tools for brands looking to reach and resonate with their target audiences.
In our yellowHEAD whitepaper about ‘The secret of Micro Influencers’ you can read more about why use micro/nano influencers instead of macro/big influencers.
How Can a Business Assess the ROI from Influencer Marketing?
While the influencer marketing approach is highly effective, it can still mean limiting the tracking capabilities. You can still determine the ROI of your campaigns, but they require some tools and techniques that most new businesses are unaware of.
Here are some of the top techniques to assess the ROI from influencer marketing effectively:
1. Add Affiliate Links
If you’re struggling to track online sales generated from social media channels, affiliate links offer a quick way to monitor them. Influencers earn a commission from these sales, making it easier to track performance metrics.
Affiliate links also provide valuable data, such as the number of page clicks and sales figures, often tied to average order size. While not always 100% accurate, this approach remains effective.
However, there are some challenges. The cookies in affiliate links typically last for 30 days, meaning that if a customer buys after this period, the sale may not be linked to the campaign, resulting in possible calculation inaccuracies. Additionally, unusual-looking affiliate links may deter customers from clicking due to security concerns. To counter this, platforms like Instagram now allow direct shopping posts, enabling customers to buy products seamlessly, which boosts impulse purchases.
2. Create Dedicated Product Landing Pages
While short links can simplify navigation, they may appear suspicious to potential customers. Branded links, on the other hand, create a sense of trust and drive engagement.
Creating dedicated landing pages for each product or campaign offers a branded and trackable approach. You can also assign specific landing pages to individual influencers, allowing you to monitor the campaign’s performance closely. Most landing page tools integrate with Google Analytics, consolidating performance KPIs into a single report for a holistic view of campaign effectiveness.
3. Integrate Urchin Tracking Modules (UTMs)
UTMs are one of the most effective ways to track ROI in influencer marketing. By adding structured UTMs to links, analytical tools like Google Analytics can precisely monitor traffic sources.
A downside is that UTMs can make links appear longer and less credible, especially to new users. To address this, using link shorteners like Bitly can improve the appearance while maintaining UTM tracking. Many link shorteners also offer integrated analytics to track page clicks, helping you gauge the impact of each influencer.
4. Focus on Brand Engagement
If your influencer marketing isn’t delivering the desired results, engagement could be the issue. Ask influencers to direct audiences to your website or social channels directly, as this can increase brand interaction and awareness.
Monitoring follower growth, engagement rates, and conversions provides insights into how well campaigns are performing. Adding branded hashtags for influencers to use can also help identify which hashtags generate the most responses, boosting brand recognition and driving conversions. Additionally, contests with specific hashtags can be tracked for engagement metrics, and you can measure participant retention by tracking how long they engage with campaign links.
5. Offer Unique Discount Codes
On platforms where link sharing is restricted, like Instagram, personalized discount codes are an effective workaround. These codes allow you to track sales generated by influencers and offer incentives for their audiences.
By offering a commission for each sale or bulk purchases, you create a win-win situation. Personalized discount codes provide valuable ROI insights and can be scaled easily to various campaigns.
With A/B testing on codes, you can see which versions yield the best results. You could also create clickable discount links, so customers automatically receive discounts, streamlining the experience and boosting conversions.
When using discounts, consider the following:
- Adjust discount values based on campaign goals and budget constraints.
- Limit discounts to keep campaigns within budget while enhancing engagement. Trackable coupons paired with reliable software provide the data needed for a data-driven approach, so selecting the right tracking tool is crucial.
6. Monitor the Earned Media Value (EMV)
EMV, or Earned Media Value, measures the monetary value of media exposure generated by influencer campaigns. It estimates how much you’d have spent on social media to achieve the same level of engagement.
Although no single formula exists for calculating EMV, averaging the costs per engagement, impression, and click provides a starting point. Once you have these averages, it becomes easier to assess total conversions and the financial return on influencer marketing efforts.
7. Consider Share of Voice & Mentions
Social mentions and Share of Voice (SOV) are important KPIs for understanding campaign effectiveness. By monitoring these, you can see where your brand is discussed and compare its presence against competitors.
SOV offers a qualitative look at brand awareness, which is especially useful if you’re trying to establish a unique brand in a competitive market. Influencers can elevate mentions and broaden your brand’s reach, providing valuable insights into the impact of your influencer marketing.
Additionally, influencers can create sponsored content to expand brand awareness, although this may require higher budgets. Utilizing these approaches thoughtfully can maximize reach and results. By avoiding costs like travel, studio rentals, and production fees, you can reinvest those funds into further marketing efforts, creating a more sustainable and ROI-focused campaign.
8. Use Whitelisted Posts for Extended Reach
Whitelisting allows brands and influencers to run posts in collaboration, where the influencer grants the brand access to promote the content as an ad directly from the influencer’s profile. This approach provides several benefits, including access to advanced targeting options and enhanced credibility, as the ad appears as an authentic post from the influencer rather than from the brand itself.
With whitelisted posts, brands can reach a broader audience and extend the post’s lifespan by adding paid promotion to the influencer’s organic reach. This strategy also offers in-depth performance metrics that help track engagement, conversions, and ROI more effectively. By using advanced targeting options, such as lookalike audiences, you can ensure the content reaches highly relevant segments of the audience.
Whitelisting also provides the flexibility to A/B test content and adjust ad creative, calls-to-action, and copy based on performance, which traditional influencer posts can’t easily accomplish. In this way, brands can optimize influencer partnerships for maximum impact, helping to improve brand awareness, drive conversions, and generate a higher ROI.
Final Thoughts
Influencer marketing has become an essential tool for brands looking to expand their reach, boost conversions, and strengthen brand recognition. With a variety of approaches to choose from, the key lies in selecting strategies that align with your brand’s voice and resonate with your target audience.
By implementing the ROI-tracking methods discussed, brands can not only measure the success of influencer campaigns more accurately but also maximize their overall impact. Investing time and resources into these strategies will help refine your influencer marketing efforts, building a stronger brand image and optimizing results over time.
As the digital landscape continues to evolve, staying adaptable and proactive in your influencer marketing strategy will keep your brand well-positioned for future growth.
Ready to elevate your influencer marketing strategy and maximize ROI? Contact yellowHEAD today to discover how our expertise can help your business thrive in the ever-evolving digital landscape!
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