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Influencer Marketing 2.0: How you measure ROI and Optimize Campaigns

diksha
October 29, 2024
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Running an influencer marketing campaign is easy but measuring its ROI is a complex task. 30% of marketers still don’t track ROI.

According to a report, 80% of marketers found influencer marketing effective for their campaigns, while 58% stated the same for traditional marketing.

In this blog, we’ll learn what influencer marketing ROI is and how to measure it. Also tips for maximizing ROI of influencer marketing and how to create an influencer marketing campaign.

What is influencer marketing and How to measure ROI

Influencer marketing ROI helps in measuring the effectiveness and efficiency of influencer marketing campaigns. It helps calculate the financial return a brand receives from spending in the influencer marketing campaign.

To calculate influencer marketing ROI, you must decide how much you will spend on the campaign. Also, you should know how much revenue your campaign has generated. With this information, it will be easy to calculate the ROI of the campaign. The formula to calculate ROI is Revenue/Cost x 100.

ROI= (Revenue/Cost) x 100

For example, if you paid the influencer $5,000 and generated sales of $10,000 then your ROI will be 200%. On average brands make $5.78 for every $1 spent on influencer marketing. While the top 13% of businesses drive $20 or more for every $1 spent.

Tips for maximizing ROI of influencer marketing

Now that you have learned how to measure an ROI, let us learn some of the tips to maximize the ROI of influencer marketing.

Goal: It is important to know your goal in order to measure the ROI of your influencer marketing campaign. Some of the common goals are increasing brand awareness to increase the visibility of your brand, driving more engagement which shows how interested your users are in your content, boosting sales which is the ultimate goal of every business, and building trust and credibility wherein the brands use an influencer to build trust in the customers.
Objective: Once you have selected your goal, it is important to decide on some smart objectives as well. This helps in a better analysis of the ROI. A smart objective is specific, measurable, achievable, relevant, and time-bound. This helps in better running and analysis of your campaigns. A well-defined objective can be, to increase 29% Instagram followers in 3 months, Get 1,000 click-throughs to the website in 2 weeks, achieve a 10% conversion rate on newly launched products, and get 100 User Generated Content (UGC) submissions in 3 weeks, etc.
KPIs: KPI helps in understanding and measuring how well you are achieving your goals. KPI changes with different goals and objectives. Some of the most commonly used KPIs for measuring the ROI are engagement metrics, Impressions, Conversion Rate, Click-through Rate (CTR), Return on Investment (ROI), Cost per Acquisition (CPA), Share of Voice (SOV), etc.

Monitor: Monitor your influencer marketing campaigns frequently using analytics or third-party tools in order to track the progress and identify top-performing influencers. You can modify or edit your strategy frequently according to the latest trends.

Challenges of measuring the ROI of influencer campaigns

Measuring the ROI is very important for your business but it is a complex task that needs your attention. Here are some of the challenges for measuring the ROI

Lack of Goal: How will you measure the ROI when you don’t know the goal of your campaign? You can’t comprehend the true meaning of the data. If you don’t know what you want to achieve from this campaign how will you measure it?
No clear way to measure success: sometimes it is difficult to understand the true meaning of the data. For example, you can drive a single or true value to the number of signups you got from a UTM link because a buyer is persuaded by various factors that may not be related to the influencer. In such a case it gets difficult to understand the true ROI of the campaign.
Lack of Data: lack of sufficient and relevant data will hamper your understanding of the ROI. Due to a lack of data, we can’t understand the contribution of the influencer and hereby ROI achieved.

Influencer marketing is gaining more momentum with time. In order to increase ROI, you must set definite goals, clear objectives, effective content strategy, relevant KPIs, etc. to measure the success of the ROI. In order to achieve it you must have a smart objective, a clear goal, high-quality content, etc. Lumia 360 helps in optimizing the social media campaigns to maximize your ROI. We have created high-quality relevant content for our clients that increased their ROI and fulfilled the marketing objectives. Influencer marketing is an effective way to increase your visibility and engagement rate. Make sure you have set a limited budget for it to measure its effectiveness.