As influencer marketing gets more sophisticated (and expensive), the demand for reliable measurement of ROI is increasing rapidly.
Are you measuring the value of your efforts the right way?
According to research from Linqia, marketers are predicted to spend $50,000 – $100,000 per influencer marketing programme this year (doubled from 2016’s $25,000 – $50,000). If you’re spending big budgets, you need to know why you’re considering influencer marketing as part of your marketing mix, and how you’re going to measure it.
This is something many marketers have been aware of for a long time: a recent Econsultancy report revealed that measuring ROI on their influencer initiatives is the biggest challenge for 65% of marketers.
So what’s stopping marketers understanding the value their influencer marketing activity is driving? There’s already a wealth of research out there on this fiercely debated topic – and there’s one question that comes up time and again: should influencers be judged on sales?
The short answer is yes – if that’s what your objective is. To clarify:
- It depends on what you want to get out of your campaign. Marketing basics: start with your objectives and determine how you’re going to measure performance from there.
- As consumers are often exposed to brands and products through influencer marketing at the earlier stages of the buying cycle, measuring the impact on sales across the whole user journey – not just at the last click – is essential.
What do you want to achieve with your influencer marketing?
Understanding what you want your influencer marketing to achieve will not only shape the tactics used but also how it will be measured.
Raising awareness and reaching new customers
Many influencer campaigns are about awareness and brand positioning. Here, working with brand-relevant influencers that offer the potential of long-term partnerships and ambassadorship is key. Awareness has always been tricky to measure but things are getting more sophisticated. Tools now exist to help brands measure KPIs such as sentiment and share of voice, taking the understanding of performance beyond simple ‘reach’.
Logically, brands want to raise awareness among their target audiences – those people who are likely to go on to become customers. One way to measure this is to look at how much new customer web traffic is driven by your influencer campaigns. Rakuten Marketing data shows that 84% of the revenue driven by content publishers (including influencer bloggers) is from new customers, indicating that they are effective at reaching new audiences.
This data can then be used to generate positive KPIs, such as cost per new user. These stats can help build a stronger case for influencer activity as an effective means for new customer lead generation.
Web traffic in general – whether that’s from new or existing customers – is still a common indicator of success for influencer marketing, with The Rise of Influencers report showing that 79% choose it as their most important metric.
But how much can just looking at amounts of web traffic really tell you? Not a lot. It’s the action that consumers take once they visit your site that’s truly important. How long do they spend on your website? How many different pages do they visit? Are they visiting high value areas of your site, or did they just bounce and disappear? Measuring the onsite activity of those people referred by influencers gives more meaningful engagement metrics.
Measuring engagement is about measuring the impact of your influencer marketing beyond sales and comparing it to other types of marketing. This type of measurement is particularly pertinent for retailers that don’t rely on ecommerce – for example, household brands stocked by supermarkets.
Sales and conversions
All that said, let’s not forget the importance of sales and revenue. Trying to get budget for campaigns that may not have a provable ROI is a huge pain point for marketers. According to another Econsultancy report – The New Face of Luxury – the biggest challenge to implementing influencer marketing for luxury brands (a key sector taking advantage of influencer marketing) is budget.
When budgets become constrained, the activity that can’t be linked to revenue generation is commonly the first to be cut. But, as we’ve discussed, influencer marketing is often about raising awareness through aspirational content, with a view to generating purchases further down the line, rather than pushing immediate sales.
Rakuten Marketing data backs up this hypothesis: it shows that content publishers, including influencers, start more converting customer journeys than any other affiliate publisher type. As well as this, of all the revenue driven by content publishers, 54% sits in the first position in the user journey.
The visualisation below, based on aggregated data from Rakuten Marketing affiliate clients, shows that social networking and content publishers (two key channels for influencer marketers) commonly appear at the beginning of the user journey.
This demonstrates that if you are going to measure influencer marketing using revenue, analysing and reporting on data across the whole user journey, rather than just at the last click, is essential.
Understanding the multi-channel view and seeing incremental value
The need for better attribution to measure influencer marketing was cited as the most common request in eMarketer’s recent Measuring Influencer Marketing guide. This demand is only going to increase in line with the demand for better measurement of the ROI of influencer marketing.
Using attribution and analytical tools that provide a multi-channel view across the whole user journey is essential to demonstrating the impact influencers have on sales. Having this view enables performance marketers to understand the value of influencers in the context of their other marketing channels, wherever they appear in the user journey.
Even if the objective of your influencer campaigns is to increase brand awareness or engagement, being able to tie those newly engaged visitors back to sales further down the line will help give you the power you need to secure your influencer budget.