How does… influencer marketing measurement work?
We ask some of the industry's most knowledgable boffins to break down jargon to help you through those confusing meetings and indecipherable conferences. Here, Partnerize's Stefanie Colley explains how influencer marketing measurement works.
For many of today’s brands, influencer marketing is becoming an increasingly important way of reaching and connecting with shoppers. It’s incredible to see that some influencers are now attracting audience sizes that overshadow those of traditional media platforms. Further, so-called “micro-influencers,” who attract smaller but very passionate audiences interested in specific topics, are playing a key role in helping millions of consumers make product choices.
All that said, the revenue impact of the influencer channel has been relatively difficult for brands to measure. Many brands spend heavily in the sector without proper measurement tools and strategies in place. In Australia, we recently saw the government slam the influencer channel as ineffective. By contrast, we’re seeing brands who have robust measurement in place raving about the results they’re driving.
So how can you track real ROI from influencer marketing?
How do influencers make money?
Traditionally, brands pay influencers a flat fee in exchange for specific types of promotions, like social posts, blogging and emails. With this flat fee model, the brand typically gets a one-off post or set of posts in exchange for their investment. Many brands have used influencer marketing platforms such as Tribe or Scrunch to solicit and manage these arrangements.
These platforms allow brands to select, manage and pay influencers across all of their products and campaigns. Additionally, a growing number of brands have initiated direct relationships with their most important influencers. Direct relationships can help brands develop bespoke programs that drive better results.
Why is precise measurement so important in influencer marketing?
Paying a flat fee can make it difficult to effectively measure ROI unless you have robust measurement in place. Flat fee deals pay for activity rather than results. But you can track overall influencer spend and sales with unique influencer codes and other measurement tactics.
Unfortunately, many brands have no such measurement strategy in place. Instead of “hard” ROI measurement, influencer programs are often measured by a brand’s social team. As a result, they often get measured quite well for brand value, but less so for their revenue performance.
How can you measure and optimise the business value of influencers?
The best way to measure influencer marketing is to view this as a distinct revenue channel and put metrics and measurement in place that precisely tie specific purchases to each influencer’s activity – just as you do with other digital marketing channels.
You might still use a flat fee payment model, but unique tracking and measurement can help you see the exact revenue driven by clicks and traffic driven by each influencer. When each influencer is given a unique tracking code for their programs, tying activity to results becomes straightforward.
Further, a growing number of brands are moving away from flat fee influencer deals and toward CPA agreements. With CPA, an influencer is compensated for the true value of the business they drive. Brands pay if, and only if, they make a sale.
How can I use data to drive influencer ROI?
Measurement shouldn’t stop with just revenue. Brands should also ensure that they collect additional purchase parameters with each transaction, so they can understand the specific items of interest to a particular influencer’s followers.
As you formulate measurement plans, it’s important to ask yourself whether you are able to determine products or categories for which an influencer is driving sales. To do this, you need to have access to all data points across the path to purchase, giving more visibility on what you’re selling and to whom.
Can creativity improve influencer marketing effectiveness?
With the right data, you can drive remarkable results with influencer programs. Some approaches you can take include:
- Accountable offline-to-online: This ensures your offline to online activity is attributable. A great example of offline influencers is within the fitness space. Fitness specialists within yoga or gym classes can show other attendees a unique QR code that drives them to an online store. They are then compensated for every sale
- LTV compensation for subscription sales and signups: You can work with influencers to drive sign-up subscriptions to your site or app and then conduct your own marketing to those customers once they’re signed up, to convert these triers to paid subscriptions. Further, you can use lifetime value analysis to compensate based on the long-term value of a customer.
- Margin-based compensation: You can reward influencers at a higher rate for products or categories that offer higher margins and increased profitability. This allows the influencer to be more specific in what they’re promoting and drives stronger results for your bottom line.
Stefanie Colley is customer success director – APAC at Partnerize.
