How To Measure The ROI of Influencer Marketing
Learn how to measure the ROI of an influencer marketing campaign.
The ROI of influencer marketing is possibly one of the industry’s greatest advantages, yet many find this the hardest KPI to quantify. Perhaps due to the unique allocation of spend or the “newness” of the industry. The industry is still learning how to calculate spend. However, it is a common consensus that one of the key strategic advantages of influencer marketing is cost-effectiveness. More and more industry professionals rely on an important metric known as Earned Media Value (EMV) to estimate an influencer campaign ROI.
This article will familiarize you with the EMV metric and introduce you to an important method leading brands use to calculate ROI.
Influencer Marketing ROI
1. Get To Know EMV
Traditional marketing channels will use ROI as one of the benchmark KPIs for assessing campaign impact. Since influencer marketing spend is allocated differently than native ads or PPC, estimating ROI is also done differently. For this reason, we use the Earned Media Value (EMV) metric to estimate the ROI of an influencer marketing campaign. The EMV metric measures the value of reach and engagement received by an influencer on a campaign. It estimates how much ad spend would be required to receive the same results with paid media buying.
When calculating EMV, we distinguish between network, type of post, type of engagement, and assign a benchmark value to each. The default metrics we apply are obtained using benchmark values from soulmates.ai.
2. Calculating ROI
Influencer marketing is considered more valuable than traditional paid media. That nature of the content is naturally more authentic and intimate and a paid advertisement and the goal is often engagement rather than simply just reach. How do we know it is more valuable you may ask? Well, that’s where Earned Media Value comes in.
As mentioned before, EMV calculates how much money you would have to spend on Paid Media to achieve the same results (reach and engagements). Soulmates.ai estimates that influencer marketing is 10.52 X more cost-effective than paid media. Meaning it would cost $10.52 of paid spend per $1 of influencer spend to achieve the same results
Calculate Your Influencer Marketing ROI
[Influencer Marketing Spend] x [10.5] = ROI
3. Understand ROI of Influencer Marketing
Once you calculate your influencer marketing ROI it is important to understand how to contextualize this. This KPI should not exist independently. Rather, it should act as a benchmark for understanding your general marketing ROI, and how it relates to your other marketing channels.
Set success metrics to measure your various marketing channels ( i.e. reach, engagements, conversions) and analyze these metrics against the ROI of each channel. Identify which channels are achieving success metrics in the most cost-effective manner, and set a strategy that optimizes these channels.
Budgeting Influencer Marketing
How to Understand Influencer Rates
Once you’ve understood your influencer marketing ROI and you’re ready to budget for your next campaign, it is crucial that you have a general understanding of influencer rates. This will let you estimate your upcoming budget with a sense of accuracy while entering negotiations and setting rates fairly. To help you budget with a sense of ease, we’ve surveyed over 4,800 influencers to better understand rates and pricing trends in the influencer industry and offer a complete influencer rate card.
How To Achieve Cost-Effective Goals Through Influencer Marketing
Measuring the ROI of an influencer campaign is imperative for understanding the success of the impact of a campaign. Klear’s AI technology makes monitoring and measuring the impact of your campaign hassle-free. This includes measuring the ROI of campaigns. Schedule a call with an influencer marketing expert to discover how to easily measure the impact of your influencer campaign and calculate the ROI.