How to Evaluate ROI on your Influencer Marketing Program?

Table of Contents

Do you run an influencer marketing campaign but have no idea how effective it is? You’re perhaps already aware that the return on investment of your programme extends far beyond initial sales.

Even when the first results of an influencer marketing campaign might be lucrative, the ROI of an influencer campaign can be both short and long-term profitable.

We’ll explain the process of evaluating the ROI of your influencer program in this blog. We’ll lay down the keywords before demonstrating how to establish key performance indicators.

Understanding the outcomes of your influencer campaign will enable you to make the necessary adjustments to maximize your ROI over time.

Understanding Influencer Marketing Program

The totality of your influencer marketing campaign is your influencer marketing campaign’s efforts. You head a team of influencers and run several influencer campaigns.

Understanding an Influencer

Influencers are “power users” of social media curating online communities. They frequently share a passion for niche products and lifestyles.

Influencers expand their online networks by offering their followers relevant and entertaining material. Influencers cultivate strong trust with their audience because they work for themselves.

Retailers form collaborations with influencers in order to promote, evaluate, or advocate products and services to their target audiences. While influencers are entrepreneurs wanting to turn their social capital into profit, they won’t work for just any company.

Influencers collaborate with brands that they believe would benefit their online communities. During an influencer campaign, brands that use influencer marketing successfully collaborate with their influencers and trust their creative sense.

Understanding an Influencer Campaign

An influencer campaign is when a brand and its influencer agree to promote a product or service.

Campaigns usually involve a given number of posts in a specific amount of time. The brand and the influencer agree on the number of posts, the content of the posts, and the overall expectations.

To track customer interaction for each influencer post, brands use affiliate links, offer codes, and other key indicators. Influencers can help a brand achieve its objectives by increasing sales, web page visits, leads, and overall brand recognition.

Understanding Influencer Marketing Manager

An influencer marketing manager is the primary point for brands with the influencer. Managers are in charge of the brand’s influencer relationships, as well as tracking campaign results, reporting them to decision-makers, and making educated recommendations for future influencer campaigns.

As part of their employer’s overall marketing mix, influencer marketing managers usually work alongside other marketing department leaders. As a result, these managers coordinate their influencer campaign goals with the brand’s overall marketing goals.

Crucial KPIs of an Influencer Marketing Program

Key performance indicators (KPIs) assist you in determining whether or not your influencer programme is successful.

You may track progress using the KPIs you set up during and after each campaign. As more data from each campaign is gathered, influencer marketing managers frequently update these KPIs.

However, you should become familiar with a few distinct KPIs, including campaign-based, sales and ad spend, and website traffic.

KPIs for Campaign

The purpose of campaign-specific KPIs is to determine how frequently your influencer program engages viewers. Furthermore, campaign-relevant KPIs aid in the detection of variations in frequency over time.

To begin, you’ll want to assess all of the dynamic parts of your influencer campaign.

  • How many campaigns do you have going on? Is the number of campaigns every month rising, falling, or remaining constant?
  • How many influencers have you activated? We refer to “activated influencers” as individuals who have been vetted, hired, and are now posting as part of your campaign agreement.
  • How many influencers have you recently activated? Knowing whether or not your influencer team is growing is an important part of tracking the ROI of your influencer campaign.
  • How many influencer posts are there in total?
  • On a monthly basis, how many influencer posts are there? Is the quantity of posts rising, falling, or remaining constant?

KPIs for Sales and Ad Spend

Your aim with sales and ad spend KPIs is to figure out how much each influencer post costs and how much revenue each post generates.

Short- and long-term product sales are generated via influencer campaign posts. Your short-term influencer ROI is represented by your sales KPIs. These KPIs are useful for demonstrating to you and your superiors the immediate income impact of your influencer program.

  • The number of orders per advertisement.
  • The total revenue from an ad set
    • You’ll probably use one influencer post in an ad set with a few distinct ad designs and targeted demographics.
  • The cost per order (based on the cost of the ad or bid)
    • Cost of the ad/number of orders = cost per order
  • The number of posts breaking even with ad spend
    • Post ad revenue = cost per order
  • The number of profitable posts used for paid ads
    • Post ad revenue > cost per order

KPIs for website traffic

The purpose of website traffic KPIs is to determine the long-term impact of your influencer marketing campaign. Increased site traffic means more brand exposure and future revenue.

Many of your clients will purchase your goods, but they may not be able to do so immediately. As a result, influencers’ posts direct customers to your website in search of additional information.

KPIs for web traffic can help you understand how customers behave on your site and how often that activity leads to sales. Answer the following questions during and soon after each campaign to identify these KPIs. To address these questions, we recommend utilizing Google Analytics.

  • How many website views (sessions) did each influencer post result in?
  • How many of the visitors were new, and how many of them were returning?
  • How long do they stay on your site for (session duration)?
  • During each session, how many pages do your users visit?
  • How many of those people signed up or bought something? The total number of conversations is represented by this KPI.
  • What is your rate of conversation?
    • Total number of conversions / total number of sessions or users

Calculating Influencer Marketing KPIs?

It’s not always straightforward to determine your influencer marketing KPIs. You can’t tell if your influencer programme is functioning without those KPIs, though.

You can either compute your influencer KPIs manually or use aggregator software, depending on the resources you have available.

How to Approach Manually

With a manual approach, you’ll want to keep a close eye on your influencer posts. You can use hashtags on most social media platforms (which is why you might want to make liberal use of hashtags in your influencer campaigns).

Count the number of comments and post shares when monitoring your influencer postings. These figures can be used to calculate the engagement rate of each post.

(Post Comments + Post Shares) / Number of Influencer Followers = Engagement Rate

For sales KPIs, evaluate the formulas below and calculate campaign ROI with a pencil, paper, and calculator.

Cost of the Influencer / Number of Influencer Orders = Cost Per Order

Revenue Per Order – Cost Per Order = Influencer Campaign Profit or Loss

Or in the case of ad spending (repurposed influencer content):

Cost of the Ad Set / Number of Orders = Cost Per Order

Revenue Per Order – Cost Per Order = Ad Campaign Profit or Loss

Here is a review of website metrics to help you manually calculate your KPIs:

Total Number of Sessions or Users / Total Number of Conversions = Conversion Rate

You may wish to use spreadsheets and construct formulas within your spreadsheets even if you are manually computing your KPIs. This will streamline your manual calculations, allowing you to just plug in totals and let your spreadsheet handle the rest.

Google Analytics is also free to use for tracking website data. It also gives an incredible number of key web page KPIs as a free tool. As you gain experience with this tool, you’ll be able to create customer journeys and milestones that will help you automate your human calculations.

Reporting and Analytics Tools

To make the KPI tracking and calculating process easier, you should use reporting and analytics tools.

Reporting and analytics tools will keep track of and count your data. There are several different types of reporting and analytics tools customized for specific businesses within the software industry. As a result, your influencer reporting and analytics tool should focus on influencer marketing.

Cybees influencer management platform, for example, creates affiliate links, and offer codes, and records each influencer post automatically. Cybees automates the process of manually counting each post, remark, share, and hashtag. Cybees also create KPIs on the fly, such as engagement rates and campaign profits/losses. As you scale your influencer program, these reporting and analytics tools save you a lot of time and money.

Whichever reporting and analytics tools you use, keep in mind that you don’t want to spend money on something that already exists in your spreadsheets. The gadget should be simple to use and make your job easier.

After acquiring the information, the correct tool will make reporting simple. You can choose which KPIs to display and send a formal report to your immediate boss, client, or team.

Track Influencer Marketing Program KPIs

Engagement is the most crucial KPI in influencer marketing. The cost of obtaining significant interaction indicates the maturity of your influencer programme.

The lower the cost per engagement, the better the ROI.

Cost Per Engagement (CPE)

You may calculate your CPE in the same way you calculate your cost per order. Rather than totaling your earnings, you’ll get the total amount of engagements – post comments, shares, hashtags, and so on – per influencer post.

Cost of the Influencer / Number of Engagements = Cost Per Engagement (CPE)

CPE Change Over Time

You may want to track changes in CPE on an influencer, campaign, and programme level when tracking CPE over time.

If you have more than one influencer in a single campaign, you must calculate the average CPE for all of them.

Calculate the average CPE for all campaigns in a given month or quarter when tracking your influencer programme CPE.

You’ll notice differences month to month if you keep track of your influencer, campaign, and programme CPEs. These changes can help you figure out what elements affect your CPE. As you and your influencers improve at creating appealing content, your goal is to gradually lower your CPE.

Evaluate the Final ROI of an Influencer Marketing Program?

All of the KPIs we’ve given can help you estimate ROI for each influencer campaign, whether you’re tracking sales or growing site traffic (brand awareness and future sales). You’ll also want to be able to evaluate the ROI of your entire influencer programme at any time.

Your ROI will fluctuate as long as your influencer programme is active. As a result, cost per order, cost per interaction, and campaign profitability calculations will evolve over time.

Trial and error, as with any marketing approach, leads to continuous development and greater results.

Streamline the ROI Tracking and Calculation Process with the Right Tools

The more time you and your team spend counting each post, remark, hashtag, and share, the more likely you are to make mistakes. Additionally, manually tracking and calculating ROI takes time.

Brands frequently identify their influencer, post, and engagement expenses without accounting for the cost of man hours used to generate such figures and statistics. Profits are curiously flat when they should be increasing, or team members are burning out.

That’s why influencer marketing managers rely on Relationship Management Tools so extensively. Each relevant KPI can be tracked and displayed in a number of easy-to-read reports using Relationship Management tools like that of Cybees.

When you use the proper influencer marketing tools, you can quickly scale your influencer program while also freeing up time to analyze KPIs and enhance campaign success. You’ll also have more time to work on your overall marketing plan and build influencer relationships.

Conclusive Summary Calculate and Track Influencer Marketing Campaign ROI

With this blog, we learned;

  • Influencer programme terms and key personnel
  • Campaign-based KPIs, sales and ad expenditure KPIs, and website traffic KPIs
  • All of the important influencer marketing KPIs
  • How to track CPE (cost per engagement)
  • How to determine the final return on investment for your influencer program