Some think influencer marketing is dead. We’re here to tell you that not only is it alive and well, but thanks to influencers, thousands of brands across the globe have experienced continued growth over the past decade.
Despite the impact of COVID-19, influencer marketing continues to be as popular as ever. In fact, the pandemic might have even accelerated it. With new social networks taking over the world (hello, TikTok) and more people leaving their 9-5 jobs to pursue content creation, there’s no doubt that influencer marketing is experiencing a renaissance of sorts this year.
One small problem: only 67% of brands measure the return on investment, or ROI, from influencer campaigns. If you fall into the 33% of brands that don’t, you run the risk of missing out on valuable data you can use to improve future campaigns. As a business, your marketing dollars are valuable. You want to show your team that your investment has generated meaningful results, and more importantly, sales!
Let’s take a deeper look at how you can run a successful influencer marketing campaign, measure your ROI, and amplify your brand’s online presence to send your sales soaring.
What is Influencer Marketing?
Influencers are individuals with specific niches that have a significant online following. They are typically viewed as experts in their area and have the power to impact their audience’s purchasing decisions. Thanks to high levels of audience trust, an influencer recommendation or endorsement can give your brand a massive boost by helping expand your reach and generate new leads.
Unlike celebrity endorsements where brands hire people to represent their products in campaigns, influencers typically operate more independently. They usually create their own Instagram posts, working within a brand’s advertising guidelines. The outcome is a more genuine, authentic advertising model that connects you with customers in an organic way.
Types of Influencers
Social media influencers can be categorized in multiple ways. Some of the most common methods are the number of followers, types of content, and level of influence. You can also group influencers by the niche in which they operate.
The most common way to categorize influencers is by follower numbers. Here are some of the terms you might hear thrown around the influencer marketing space:
These people have a vast number of social media followers, typically 1 million or more on at least one social channel. Mega-influencers tend to be celebrities who have gained fame offline. Think actors/actresses, athletes, musicians, or models.
When it comes to mega-influencers, costs can run steep. A good rule of thumb is that only major brands should approach them for influencer marketing, as their services could cost up to $1 million per post, and they’re likely to be extremely picky about who they work with. Likely, they’ll have agents working to make deals on their behalf.
A step down from mega-influencers, macro-influencers tend to be more accessible to brands. Most would consider individuals with a following between 40,000 and 1 million on a social network to be a macro-influencer.
Macro-influencers tend to fall into one of two groups. Either they’re B-list celebrities who might not have made it big yet, or they’re successful online creators or bloggers who have built up a significant following. They generally have a high profile and excel at raising awareness among their demographics.
Micro-influencers are often everyday people who have become known for their knowledge about a specific niche. They might have a sizable following – somewhere in the realm of 1,000 to 40,000 – and tend to have close relationships with their followers.
A micro-influencer may not know of your brand before you reach out. If that’s the case, you’ll have to put in some work to convince them that your product is worth promoting and why their followers will benefit from it. You’re also more likely to encounter influencers in this group who might promote a brand for free, while others expect some form of payment.
Micro-influencers are becoming a gold mine for growing brands. They tend to have more engaged audiences and exude reliability, authenticity, and credibility, traits that today’s social media users value.
A relatively new category, nano-influencers are slowly gaining notoriety. While they might have fewer followers (1,000 or less), they tend to be experts in obscure or highly specialized areas.
While many brands might consider them inconsequential, micro-influencers can be extremely valuable for brands who create highly specialized, niche products. They also tend to be more affordable if you’re a smaller, less known brand.
While nano-influencers might carry significant sway with a small group of people, you would have to work with hundreds of them to reach a sizable audience in most niches.
What Are The Benefits of Influencer Marketing For Your Brand?
Numerous studies have highlighted influencer marketing’s effectiveness. The industry is expected to reach an astounding $16.4 billion in 2022. Yes, you read that right – billion. This growth is largely attributed to the increasing popularity of short video style content on TikTok, Instagram Reels, Facebook, and YouTube platforms.
Thanks to the pandemic, more consumers are on social media networks than ever before. And marketers have noticed. According to Influencer Marketing Hub, 93% of marketers have opted to include influencers in their marketing strategies, and it’s now considered a key advertising strategy.
Research from Mediakix highlights that 89% of marketers find the ROI on influencer marketing comparable or better than other marketing channels. Why? By working with an influencer who has an audience that matches your brand’s target audience, you’re more likely to reach consumers who have already heard of your product or service or whose interests are more aligned with what you have to offer.
What’s more, the value of social commerce is projected to reach $958 billion in sales in 2022. No doubt, your brand will want a piece of this pie. Influencer marketing is one way you can do that.
Beyond driving sales, influencers also offer a cost-effective way to generate high-quality content for your brand. In a typical content shoot, you might hire a creative team to plan your campaign, photographers and videographers to shoot it, and designers and social media managers to finish and publish it. With influencers, you work directly with individuals who understand how to use social media tools to create content that speaks directly to their audience.
How to Run an Effective Influencer Marketing Campaign
There’s no one right way to run an influencer campaign. Depending on your budget and goals, influencer marketing can range from sending content creators free products in the hopes that they’ll feature it to more formal agreements where influencers are compensated for each post they make.
Hybrid agreements are also gaining popularity. This might look like an affiliate tracking program where influencers earn profits through a unique link or personalized code.
No matter what model you choose, there are key components of any influencer campaign that you should be aware of.
Set Clear Campaign Goals
Before you start reaching out to influencers, ask yourself: what goal am I hoping to achieve through this campaign? Is your goal to create more brand awareness, build your audience or following, or drive sales through social media?
The biggest mistake your brand can make is not knowing what you want to achieve. Starting with a clear goal in mind and attaching a metric or measurement to it is the best way to guarantee your campaign’s success.
Determine Your KPIs
Numbers always have a story to tell. Key performance indicators, or KPIs, are the data you’ll measure to evaluate whether or not your influencer marketing campaign was successful.
For example, if your goal is to build brand awareness, look at impressions, profile visits, and reach. If your goal is lead generation, look at the number of new followers or email subscribers, link in bio or landing page click-through rates, and website traffic.
Choose the Right Influencer for Your Campaign
Choosing the right influencer is a complex process. It typically depends on two things:
- Your target audience size. Are the products you make highly specialized and obscure, or are they widely utilized and relevant to a large number of people?
- Your influencer marketing budget. If you’re a smaller brand with less expendable revenue, you might consider working with a nano- or micro-influencer instead of a macro- or mega-influencer.
Thanks to the remarkable growth of influencer marketing over the past few years, tools now exist to help brands choose appropriate influencers for their campaigns. Here are a few influencer marketing platforms to try:
- Grin – With a focus on eCommerce, Grin has integrations into the major online shopping platforms. It pulls all registered users from your eCommerce site and finds their social profiles, then creates a list of potential influencers and their relevant statistics, all of whom have previously purchased your products.
- Klear – Klear was founded by three brothers who wanted to create a smarter way to access insights from social media. They work with some of the biggest brands, including Huawei, Adidas, Microsoft, and Coca-Cola. Their plans are straightforward and allow you to test their service with limited influencer search and social profiles.
- CreatorIQ – Best for larger brands or marketing agencies, CreatorIQ relies on tech to simplify the influencer marketing process. It integrates directly with social platform APIs, and its AI-powered algorithm analyzes over 1 billion public social accounts to see if they’re worth adding to their database. Currently, they have over 15 million creator accounts indexed on their system.
- #paid – #paid was one of the first influencer platforms to target different sections of brands’ sales funnels. They recognize that finding influencers who create exciting content and are a good fit for a brand is more valuable than reach.
Don’t want to use an influencer marketing platform? Conduct your own influencer research! With an analytics tool that offers deep Instagram analytics, you can gather audience insights and reach out to influencers in your network with audience demographics similar to yours. An Instagram-first tool like Sked Social can help you do all that and more.
Choose Your Influencer Strategy
Each influencer campaign will look a little different, depending on your content marketing goals. For instance, will you partner with an influencer on a contest or giveaway to get more Instagram followers? Or perhaps you’ll give them a discount or promo code to drive sales directly.
Here are a few other ideas for your campaigns:
- Account takeovers
- Branded hashtag
- Giveaways, contests, or challenges
- Promo or affiliate codes
- Sponsored post (showing or mentioning your product or service)
Whichever you choose, make sure that the influencers you work with are clear on the expected deliverables, the compensation amount (if any), and the timeline you expect them to post within.
You can even take it a step further and ask that the influencer share the analytics from a sponsored post with you. This will help in calculating your ROI.
Learn how to curate the perfect influencer strategy with our ultimate guide to Instagram influencer marketing.
How to Calculate the ROI of Influencer Marketing
First things first. Before evaluating your ROI, start by calculating your “I”, or your initial investment in the campaign.
Your budget should include any influencer or agency fees, product costs, or fees for analytics software. Even if you’re sending an influencer free product instead of monetary payment, calculate the value of the product you’re sending.
Measuring influencer marketing ROI
For many brands, the goal of influencer marketing is to increase your overall sales or conversions. An Influencer Marketing Hub survey supports this, with the most common measure of influencer marketing success still being conversions or sales.
Below is a simple formula from Mediakix that shows you how to calculate your Instagram influencer ROI:
———————————— x 100
Total Spend (Investment)
Calculating your ROI is a little more complicated in practice. Sales and profits are a tangible measure of an influencer campaign’s success, but they aren’t the only thing that matters.
To paint a fuller picture, here are some additional metrics to consider:
Profile views and impressions
If you’re launching a new brand, eCommerce store, or product, brand awareness can be just as valuable. Impressions are a great indicator of ROI, as more impressions = more eyes on your content. This means more potential opportunities to engage, new followers, and ultimately more potential new customers.
Most social media platforms allow you to view your profile visits or content impressions right inside the platform, but an all-in-one social tool like Sked Social can help you keep track of all of your analytics in a beautifully organized dashboard.
Social media engagement includes likes, comments, shares, saves, click-throughs, and engagement rate. You can find your average engagement within the insights page of each social media platform.
As part of your agreement with an influencer, you should request a report of their analytics, specifically if it’s a paid or sponsored post. This shows you how well the campaign is performing and whether or not it’s a good investment for your brand.
Number of followers
A growing audience is often a sign of a healthy brand. But keep in mind that followers don’t mean much if they aren’t converting to customers.
For example, many brands might notice a massive climb in followers after hosting a sponsored giveaway with an influencer. However, some of those users might have followed you to win a contest, and may not even be qualified to buy from you.
Keep an eye on your follower count in the days and weeks following the campaign. Look at your dropoff rate, or the number of follows vs unfollows, to see if they’re sticking around.
Time of year
Due to the high volume of marketing content around the holidays, influencers likely have multiple brands in their inbox vying for their attention. Be prepared that influencer costs may increase during these times of year and your content has a lower chance of being seen due to oversaturated social feeds during these months. This could skew your ROI lower.
Overcome this by creating ongoing campaigns that last more than a day or week. This keeps your brand at the top of peoples’ minds (and feeds). Get creative with contests or giveaways that increase engagement and give the influencers’ content a nice bump on social media algorithms.
Product type and pricing
If measuring sales and revenues is your goal, keep in mind different types of products will see different results. For example, if your product is something new or relatively unheard of, longer-form content like Instagram videos might be necessary to show how it works.
The same goes if it’s a higher-priced luxury good. Viewers might need a bit more convincing before investing more money in a purchase, which means a greater volume of content or brand exposure to sway them.
If you’re selling something like jewelry or clothing that’s widely known and reasonably priced, an Instagram Story with a simple link sticker might do just fine.
Set revenue goals that are appropriate for your product category and price range. Gain a clear understanding of your customers’ buying behavior to determine a realistic conversion timeline.
Lifecycle of your influencer content
Remember: just because your influencer campaign has officially ended doesn’t mean that the content disappears.
See if there are opportunities to repurpose the influencer’s content for ads, email marketing, or future campaigns. This will depend on your contract with the influencer, but the more you can repurpose images or videos, the more return you get for your buck.
The nature of your influencer partnership
Does your influencer marketing strategy consist of one-off advertisements? Or are you in it to create long-standing relationships and ambassadors for your brand?
How you approach the creators you work with can significantly impact your ROI. It might be better to invest more in a series of posts with a single influencer who loves your product than a large influencer who receives dozens of PR packages a week. Loyalty and relationship building lead to stronger brand alignment and more genuine product recommendations.
For example, in an interview with Shopify, Noura Sakkijha, CEO and co-founder of the successful jewlery brand Mejuri, said she “looks for women who are passionate about the brand and share the same values. It’s not necessarily about the number of followers.”
What is a good ROI for influencer marketing?
We hate to be the bearer of bad news, but there’s no universal standard or magic number for measuring ROI on your influencer campaigns.
However, a 2020 report from Influencer Marketing Hub suggested that the average earned media value per $1 spend had increased to $5.78, which provides a rough benchmark for your brand.
While the goal of an influencer campaign is always to generate a profit, the other returns we’ve described above – from impressions and new followers to content generation for future campaigns – can’t be ignored.
The best way to measure success is to evaluate which of those metrics are most important for your business at this point. For example, if you’re launching a new product in the next few months and your impressions are 3x greater following your influencer campaign, that’s a good ROI. But if you’re an established brand that’s investing in larger influencers and don’t see conversions, it might be time to rethink your game plan.
Ultimately, it comes down to your goals and the outcomes of your influencer marketing efforts, not all of which will have a profit value. Attach results to each of the metrics outlined above to create a holistic picture of your efforts and determine whether the campaign was worthwhile.
Get More Out of Your Instagram Influencer Marketing with Sked Social
We’ve given you the tools to maximize your influencer marketing ROI, but it’s still up to you to take action.
Exploring creative ways to utilize influencer content for your feed can elevate your content and strengthen your relationship with your influencers by showing them that you value the collaboration.
Carve out hours in your social media workflow and repurpose your influencer content with handy tools like our all-in-one Instagram scheduler and feed planner. By tagging locations, users, products and managing all your hashtags in one place, you can save 5+ hours of work each week. Don’t take our word for it – try out our 7-day free trial and see for yourself!