How to Evaluate Return on Investment in Influencer Marketing Activities

How to Evaluate Return on Investment in Influencer Marketing Activities

The role of Digital PR and of influencing marketing becomes more and more central in the communication plans of companies: rely on the channels hybrids between paid and earned, it can bring benefits both in terms of reaching its audience and in terms of engagement. If for the first point the reference communities of the different influencers can be an interesting and easy to identify pool, with regard to the engagement of the audiences we are faced with two considerations to be made:

1. Quanta credibility we can absorb from the influencer and transfer it to the target audience, preventing the influencer himself from losing his credibility (in the name of his personal profit);

2. How well can we measure theimpact influencer marketing activities if they are not directly connected to lead to store activities.

If for the first point sensitivity and attention to the modalities of activating collaboration are necessary, what will make us more or less happy will be whether the investments made in this activity have generated a return or not. Yes, let’s talk about the ROI.

To contextualize the economic evaluation of influencer marketing activities, it is necessary to understand how the influencer market evolves.

Over the past 5 years, the volume of business related to this type of activity has increased from around 2 to almost $ 14 billion, exponential growth. What does it mean? Have the influencers businesses turn to for their campaigns increased or is it costing more to do this type of activity?

The answer is: both.

On the growth in the number of influencers who have entered the market, we also think of the presence of new platforms like TikTok and Twitch in which in the space of three years they have experienced considerable growth, both in users and , necessarily, influencers.

More influencers means reaching more market niches but also more competition between influencers covering the same communities, in particular to capture the attention of the target audience. For this reason we must also take into consideration the second point of this mini analysis: I hired the influencer absolutely right? To understand this, how can we measure investments in this type of activity in an increasingly competitive context?

First we understand how much we have to invest, beyond the collaboration with the best influencers (for this time we will not hire Cristiano Ronaldo and Chiara Ferragni), each channel has different costs, due to the nature and life of the content of the platform on which it is distributed: a tweet made for us, the cost of creation and life is significantly lower than that of a YouTube video.

When we set up the campaign we need to understand what are the channels in which it takes shape and whether the associated costs generated are in line with the objectives of the campaign itself: YouTube with tutorial content or reviews comes into play at a much closer stage to purchasing a photo on Instagram, and for this we must understand whether in the average acquisition cost per customer, this effort will pay off over time or not. But how do we understand it?

The answer is that there is no exact science, because purchasing behavior is sometimes based on parameters that are irrational or not controllable by the company. But that doesn’t mean we don’t have to do our homework and be ready.

In conclusion, there are two indications:

  • test, measure and fix and don’t immediately go all-in pre-flop on the campaigns we’re going to be doing;
  • not to evaluate the single action with the influencer (we gave him 1k and we did not sell anything) but it will have to be included in a long-term plan and in relation to other activities, to understand on the long term how many marketing investments have led to a turnover cause.

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