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. This might be because of the unique allocation of spend or the “newness” of the industry. In truth, marketers are still learning how to calculate spending. However, you need to know just how valuable your influencers are to your brand and strategy, and the right KPIs and metrics will tell you everything you need to know.
More and more industry professionals rely on an important metric known as earned media value (EMV) to estimate an influencer campaign’s ROI. But there are other metrics that matter in an influencer program, too.
This ultimate guide will familiarize you with the EMV metric and introduce you to this all-important method that leading brands use to calculate ROI (it’s also one of Klear’s key features!).
Table of Contents
- What Is Influencer Marketing ROI?
- Why Measure Influencer ROI?
- Calculating Influencer Marketing ROI with EMV
- Other Ways To Calculate Influencer ROI
- Budgeting for Influencer Marketing
- Final Thoughts on Influencer Marketing ROI
What Is Influencer Marketing ROI?
Influencer marketing ROI is the return on investment of working with an influencer. You can measure an influencer campaign in many ways, but ultimately, you want to compare the ROI of influencer marketing to other channels to see how your influencers are helping to support your overarching strategy.
One of the key strategic advantages of influencer marketing is cost-effectiveness. By partnering with one influencer, you have the potential to reach hundreds, thousands, or even hundreds of thousands of potential new customers. And not just any customers — if you choose an influencer who aligns with your brand and ideal audience, you’re marketing to an audience with high potential!
A few key factors will affect an influencer’s ability to generate ROI for a company. Most importantly, they need to have an engaged audience. The influencer should also align with your niche or industry. Lastly, they need to be able to align their personal brand with your company’s values and mission.
Why Measure Influencer ROI?
Measuring the impact of your influencers brings clarity to your strategy. It allows you to put your efforts and spending into context so you can see you’re making a real impact and not just following your competitors.
There’s also the matter of proving your effectiveness to higher-ups. You’ll have a much better chance of getting more budget for your influencers if you can demonstrate how your efforts are working.
Or, if you’re managing influencers on behalf of clients, you’ll become more valuable to them when you can support your work with data. Clients want to know their budgets are being well spent, and providing them with data that makes you look good can help you retain clients longer.
Calculating Influencer Marketing ROI with EMV
Traditional marketing channels will use ROI as one of the benchmark KPIs for tracking 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 EMV metric to estimate the ROI of an influencer marketing campaign.
What Is EMV?
The earned media value metric measures the value of reach and engagement received by an influencer on a campaign. It estimates how much you would have to spend on ads to receive the same results with paid media buying.
Also worth noting, EMV is expressed in a dollar amount, but it doesn’t represent the revenue an influencer has brought in. Rather, it illustrates a benchmark to show an influencer’s effectiveness versus other influencers or marketing tactics.
When calculating EMV, we distinguish between network, type of post, and type of engagement. Then we assign a benchmark value to each. The default metrics we apply come from benchmark values obtained by soulmates.ai.
Calculating ROI Using EMV
Many marketing professionals agree that influencer marketing is more valuable than traditional paid media. The nature of the content is naturally more authentic and intimate compared to a paid advertisement. The goals are different, too — influencers aim for engagement rather than just reach.
How do we know it is more valuable, you ask? Well, that’s where EMV comes in.
As we mentioned earlier, 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 10.52X more cost-effective than paid media. Or, to put it another way, it would cost $10.52 of paid spend per $1 of influencer spend to achieve the same results
To calculate your influencer marketing EMV, you can use this formula:
[Number of impressions] x [cost per 1000 impressions, or CPM] x [adjustable variable] = EMV
The adjustable variable in this formula can be anything relevant that you want to measure, such as share of voice or number of engagements.
For example, if you are doing a social media influencer campaign and earn 1,000 impressions and 200 engagements (e.g., likes, shares, comments, etc.), the adjustable variable, in this case, is 200. Let’s plug that into our formula:
1000 impressions x $3 CPM x 200 engagements = $600,000 EMV
Again, this is NOT the ROI of your campaign. But you can use this metric in conjunction with others to gauge the effectiveness of your influencer and see the value of your content.
Putting Influencer Marketing ROI Into Context
Once you calculate your influencer marketing ROI, you also need to understand what to do next. Metrics without context aren’t very helpful.
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.
Other Ways To Calculate Influencer ROI
In addition to earned media value, there are a few other areas you can track to gauge influencer ROI.
For new brands or new influencer campaigns, impressions are among the best metrics. Impressions give you an idea of how many people saw your content. You can track impressions via your built-in social media analytics dashboards.
Another opportunity is engagements. Likes, shares, and comments can indicate that people found the influencer’s content to be engaging. This matters more than you might think. People have trained their brains to ignore traditional advertising. Using influencers to promote your brand can help to break through these barriers and get a response from your target audience.
You can also look at your follower growth to see how your brand awareness has increased. Whether you’re on Instagram, TikTok, Facebook, LinkedIn, or elsewhere, new followers will come to you after learning about you from trusted influencers.
Word-of-mouth across social channels might also increase, resulting in a lift in brand sentiment, brand engagement, and user-generated content.
You can also track ROI and campaign goals via things like unique promo codes, backlinks, affiliate links, and other influencer-specific content that results in direct sales. These are especially helpful when working with multiple influencers at once.
Budgeting for Influencer Marketing
It’s easy to figure out your influencer marketing costs, but you also need to know how much value you’re getting in return. That’s what EMV aims to answer for you. As you explore EMV and its impact on your influencer marketing campaigns, you can get a better idea of how to budget for your influencer marketing.
As you may know, influencer rates can vary widely, depending on things like audience size (e.g., micro-influencers versus mega-influencers), social channels, type of content, and more. The right tools can simplify the budgeting process for you.
How to Understand Influencer Rates
Once you’ve understood your influencer marketing ROI and you’re ready to budget for your next campaign, you need a general understanding of influencer rates. Knowing ahead of time what influencers charge can help you estimate your budget with a sense of accuracy. You can also enter negotiations and rate-setting 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 created a complete influencer rate card.
Influencer rate cards can give you a general idea of what you might expect to pay based on an influencer’s audience size and type of content. However, keep in mind that these are baseline rates and may vary slightly depending on your project.
How To Achieve Cost-Effective Goals Through Influencer Marketing
Optimizing your influencer marketing strategy for the best possible outcomes at the lowest spend hinges on good data. Analytics gives you direct insight into what’s working and what’s less effective so you can adjust your spending in the right areas.
Leveraging third-party tools like Klear that quantify campaign performance on your behalf can help you skip some of the heavy lifting and get straight to the insights. Use analytics to conduct audits on all of your social accounts and see where you’re moving the needle in your marketing strategy.
Klear also helps you find and vet influencers that will be a great fit for your brand based on various factors, including brand relevance, values, audience engagement, audience size, and more. This gives you a better chance of forming the right long-term partnerships from the beginning instead of having to trial-and-error with multiple influencers to see who fits best.
Final Thoughts on Influencer Marketing ROI
Measuring the ROI of an influencer marketing program 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.
Klear tracks impressions, engagements, and other campaign metrics on your behalf. We turn data into insights to help you easily measure the ROI of every campaign.
Schedule a call with a Klear influencer marketing expert to discover how to easily estimate the impact of your influencer campaigns.