Influencer marketing has been characterized as the fastest-growing form of advertising. According to Influencer Marketing Hub, the estimated market size for influencer marketing has grown from $1.7 billion in 2016 to $9.7 billion in 2020.
If you’re doing or considering adding influencer marketing to your marketing plan, you must track your metrics to confirm it’s a cost-effective marketing channel for you. Below we have identified the key metrics to track to judge your performance.
Return on investment (ROI)
Return on Investment (ROI) is the basic metric to keep track of while running influencer marketing campaigns. ROI can be defined simply as the revenue or profit generated from an influencer campaign divided by the cost.
Keeping an eye on this metric will help you understand which influencers are bringing in the maximum value for your business. If an influencer’s fees outweigh your returns, you should clearly stop working with them. Be sure to use unique tracking links in each influencer campaign so you can tell which influencers are yielding a positive ROI versus those who are not.
Cost per acquisition (CPA)
CPA or cost per acquisition is the amount of money you spend to get one customer. Influencer marketing campaigns allow you to judge this acquisition cost based on the amount paid to the influencer.
Importantly, you can pay influencers based on the CPA rates they achieve; spending more on influencers who generate more sales, and less for those with lower conversion rates.
The purpose of influencer marketing is not just to generate sales but also to increase your brand awareness among potential customers as well as influencers themselves. A good way to measure this particular metric is by comparing before and after statistics on Google Trends. For example, if people search for your product/brand name more often during months when you are conducting an influencer campaign, then you can be sure your brand awareness has increased.
Another way to measure the success of a campaign is to check the negative and positive sentiments of potential customers towards your product/brand name on social media platforms such as Facebook, Instagram, or Twitter. Take note of what people are saying about your product. If it’s mostly negative, take proper measures before launching a new campaign with more influencers. But if positive comments start to trend, your influencer campaigns might be the reason.
Using a tool like Google Analytics, you can easily determine the number of repeat visitors to your website as well as new visitors. Assess your website visitors before, during, and after influencer campaigns to see their impact.
Reach and engagement
Not everyone who sees your company or brand in an influencer campaign will visit your website or buy your product. But that doesn’t mean, they weren’t positively influenced by the campaign and might purchase from you in the future.
As such, look at the amount of reach each influencer has given your company/brand and what their engagement is on their posts about you.
Specifically, track influencer content so that you can measure likes, shares, and backlinks (i.e., how many times other sites reference your content). You may also want to look at comments on the content for clues about its appeal or what people liked/didn’t like about it.
Influence engagement rate (IER)
Influence engagement rate (IER) calculates the ratio between the number of engagements and the number of followers that influencers had at the time they posted your campaign. The higher the IER, the more engaging your message was for their specific audience.
Use this to find other influencers like the ones who give you high IERs.
Clearly, you should measure the sales impact of your influencer marketing campaign. This is a good KPI (key performance indicator) to look at in terms of ROI, but it can also help track incremental revenue from new customers that were inspired by the content your influencers published.
As mentioned above, try to use unique links for each influencer, so you can most clearly identify sales they prompted. You should also estimate customer lifetime value in your calculations since new customers generated from influencer campaigns may purchase many times from your company over time.
Once your influencer marketing campaign gets underway, make sure to keep an eye on every share and mention/reply they receive. Any time someone retweets or shares a post about your company, it’s a sign that you resonate well with others.
It’s a good idea to repost the most popular influencer tweets and spread them across different channels. This way you can get an idea of which influencers are going above and beyond to promote your work — they’re worth investing more money into for future campaigns.
Influencer marketing can help you build brand awareness, expand your reach, generate sales and engage new audiences when done right. It’s essential that when you’re working with influencers you have the proper tools to track their influence so that you can understand where to allocate more resources in the future.
Remember influencer marketing isn’t a one-and-done operation. It takes time and nurturing for results to start showing. But if you track the metrics above, you can figure out which influencers give you positive ROI and improve your results over time.
About the author
Dave Lavinsky is the president and co-founder of Growthink. Since 1999, Growthink has developed business, marketing, and strategic plans for more than 5,000 companies and their business plan template has been used by over 1 million entrepreneurs and businesses.