When discussing either influencer marketing or creator media, inevitably we’re asked the question:
Can you prove influencer marketing works? What’s the ROI?
This isn’t a #paid specific question, it’s a question posed to every business operating in influencer marketing. It’s something that comes with being the latest and shiniest technology, discipline, or channel, so we don’t take it personally.
(Remember when people thought Google wasn’t going to be able to make money with ads? 😂)
In fact, it’s one of the questions we most enjoy answering.
Want a quick non-written answer to how to measure influencer marketing ROI? Don’t worry, the writer of this post won’t be offended. Take a look at this quick 1 minute video from #paid’s measurement and insights lead, Richelle Batuigas!
Step 1 in proving ROI—Measure everything!
Measuring ROI comes down to having the tracking in place to ensure you can prove as direct a line as possible between a campaign and a purchase.
This was originally done with coupon codes or UTM-links-in-bio, but has become much more sophisticated in the last year or so.
For instance, at the start of this year, #paid released a tracking pixel for use in Instagram Stories that allowed our customers to track purchases that originated there. In addition, with the appropriate pixel on #paid amplified posts, we now have the ability to track a creator’s impact on online sales for up to 28 days.
These two tracking elements combined give us comprehensive coverage to measure the ROI of influencer campaigns that result in an online sale.
But what about offline sales? Online sales only account for 12% of all consumer purchases, begging the question, ‘how do you measure influencer marketing’s ROI for offline purchases?’
One way to do this is through the measurement of foot traffic driven to a store, something we’re able to do via the #paid platform.
Foot traffic is great if you or your client has their own store, but what about for everyone else, like CPG brands that see so much of their business comes through the likes of Walmart?
For those customers, you need to get a little bit more academic and measure the behavioural inputs that drive purchasing.
And for the record—no—we’re not talking about likes, which are likely to disappear anyway.
Step 2 Model everything (else)
As wonderful (from a marketing perspective) as it would be to be able to track the purchase of a chocolate bar from exposure to a single specific influencer post, some things just aren’t possible.
Luckily, this has been a problem for TV and radio since their earliest days, so tools already exist to solve for this.
One of the most commonly used tools to measure the changes in brand perception that contribute to purchasing is the brand lift study.
The only problem—Out-of-the-box brand lift studies aren’t well suited to campaigns run through influencers or creators. Given that, there was just one thing we could do: Build our of brand lift methodology specially suited to influencer marketing.
A second source of data comes from social listening tools. These tools give brands and agencies another way of determining if ads are generating buzz that correlates with purchases.
In addition to these tools, there are a near endless number of inputs brands can sow into an ROI model. Key variables we often look at include:
- Other media (display, tv, etc.)
- In-store activity (pricing, trade, display, etc.)
- External (time of year, trends, etc.)
- Competitive forces (pricing, promotion, etc. of competitors run concurrently)
With good modeling we’re able to determine with a high degree of accuracy the ROI of a campaign. We’re also able to contextualize results, and make recommendations so our clients next campaign fairs even better.
Good models are living instruments. With each bit of new data, ROI models become more-and-more accurate. That’s why we’re constantly tweaking our models, to improve how well they function for our clients.
If you enjoyed this post, keep your eye on this blog in the coming months. We’ve got another great research report coming out all about the impact advanced measurement can have on crafting world class creator media campaigns.
Until next time!