In today's creator economy, knowing how to accurately measure influencer marketing performance is more important than ever. While this may feel like an impossible puzzle to solve, the path to understanding how to successfully measure influencer marketing return on investment (ROI) is simple.
Marketers often think of measuring success and campaign value as elements at the tail-end of a campaign. However, forecasting ROI should be at the forefront of your campaign planning and flow. Knowing from the get-go what type of performance you can expect from your influencer’s posts will facilitate campaign negotiations and execution, and ultimately inform your post-campaign analysis. Successful budget forecasting will be the key to measuring your ROI and informing your future strategies.
Forecasting Influencer Fees Using Social Media Value
The best influencer marketing campaigns strive to find a balance between offering competitive compensation and generating a high ROI. But how can your brand find the right price point for the content you need?
Influencer fees can vary widely due to follower count, content type, and which platform the creator is working on. Even for the most seasoned marketer, considering all these variables can be daunting.
Thankfully, Social Media Value (SMV) can give you a baseline for what a specific piece of content might cost by attributing a dollar amount to each metric associated with this post. For example, the social media value for 1,000 comments on a post might be $1,000.
CreatorIQ's proprietary Social Media Value tool is based on the price of social media engagement metrics if they were purchased via Paid Ads. By comparing the costs of purchasing 1,000 comments (or likes, or views, etc.) via Paid Ads, we can estimate the value of an influencer's post with a similar performance.
Here’s an example using CreatorIQ’s SMV to find the cost of an Instagram post. If a marketer were to purchase the below metrics:
- 1,000 impressions are worth $4.18
- 1,000 likes are worth $36.95
- 1,000 comments are worth $212.46.
To find the SMV of a potential creator post, multiply the above prices by how this creator is projected to perform in each metric. Added together, this formula gives us a baseline projected price for this piece of content.
Just like that, your brand can build a 'baseline cost' based on projected performance. This baseline dollar amount can provide a fair, transparent starting-offer price for your influencer partnership, and serve as the first building block for your forecasted total budget. Even better news? CreatorIQ's Campaign Planner tool takes much of this work off your plate.
How to Measure Your Campaign’s ROI
So how does Social Media Value inform how your brand can measure ROI for your influencer marketing campaign? Simply weigh your initial investment against your final results by calculating SMV for the creator’s actual post performance. Comparing the projected value that you established at the beginning of your campaign against the value generated by your posts is a great way to showcase ROI
Calculating the dollar amount of your posts is a helpful tool for measuring ROI, but it’s not the only way to calculate the value of influencers. It’s important to remember that return on investment for influencer marketing can take many forms.
Beyond generating revenue, influencers provide value to brands by:
- Building awareness
- Establishing a presence in the same markets as your competitors
- Growing a library of reusable influencer-generated content
- Sales and conversions
Your brand’s final step is figuring out which strategies you should continue pursuing, based on the ROI these strategies generated for your past campaigns. Ask yourself questions like:
- How much did you pay your influencers?
- Did your influencers meet their projected performance metrics?
- Could you have reached the same goals for a lower price via paid ads?
- Is your ultimate goal for your next campaign tied to performance, or securing authentic content?
Using Social Media Value, and your new perspective on different ways to measure the success of your influencer marketing campaigns, take a deep look at your creators. Identify those who are generating the most ROI, whether in the form of fresh content, engagement, or sales, and act accordingly. Evaluating these results can help you determine how to allocate your budget, define what success looks like in future campaigns, and quantify the successes you’ve already achieved.