Influencer marketing produces a fuzzy ROI

Discussion
Photo: @ashleyartidiello via Twenty20
Feb 19, 2019

The use of social media influencers is expected to take another leap in 2019, but finding a return on investment (ROI) remains a challenge.

Encouragingly, a survey of 150 marketing, communication and public relations professionals from SocialPubli.com, the micro-influencer marketing platform, finds 60 percent planning to increase their influencer marketing budgets in 2019, and 84 percent believe that it is effective.

The biggest challenge facing influencer marketing, however, remains measuring ROI, cited by 28 percent of the survey respondents. That was followed by the somewhat related difficulty of verifying the authenticity of influencers and their followers, 21 percent; and finding the most relevant influencers for campaigns, 16 percent.

Like some other advertising mediums, measuring an influencer’s value is made more challenging by a lack of a direct link to purchases. Influencer metrics change depending on the platform, although Instagram is by far the most favored.

A newer wrinkle is the rise of the micro-influencer. In the past, the more followers, the more value the influencer packed. Now, influencers with fewer, less-casual followers are seen by many brands to be better at engagement. Some marketers are touting the value of nano-influencers or those with fewer than 2,000 followers for their niche focus.

In a twist, the SocialPubli.com survey respondents placed greater importance on engagement (26 percent) than on the more traditionally used metric of reach (19 percent) when asked how they measure the success of their influencer marketing campaigns. Also cited were an increase in website traffic (13 percent) and sales and lead generation (13 percent).

SocialPubli.com said the greater emphasis on engagement showed marketers were focusing on quality over quantity. “They are looking for those influencers who can drive genuine conversations,” said Ismael El-Qudsi, CEO of SocialPubli.com, in a statement.

Another new survey of 800 marketers from social listening and analytics platform Talkwalker likewise found a bullish outlook for influencer marketing, although 40 percent indicated measuring ROI is a major challenge.

A newfound focus on authenticity over appearance and greater focus on quality was also seen. “You can’t just pick a celebrity you like and hope for the best,” said Brittany McKone, VP of analytics at Weber Shandwick, in a statement.

DISCUSSION QUESTIONS: What would be your formula for measuring the ROI of influencer marketing campaigns? Does the apparent shift in focus to engagement from reach make more sense?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"While it may be just as difficult to produce 'hard evidence' of ROI, social media and influencer campaigns can yield a lot of rich insights on customer behavior."
"Influencer marketing is different than word of mouth. The latter is free and the former costs A LOT!"
"Attribution in marketing is difficult, regardless of whether influencer marketing is part of the mix."

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15 Comments on "Influencer marketing produces a fuzzy ROI"


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Chris Petersen, PhD.
Guest

The tools to measure print and broadcast media are the traditional metrics of reach and frequency. Historically, there has been no reliable way to measure “engagement” with print and broadcast. Marketing ROI for traditional media has been measured via sales uplift for on-ad weeks versus non-ad weeks. Unless there are some type of “coupons” redeemed for a sale, traditional media suffers most of the same issues as social media in terms of measuring direct impact on sales and ROI. However, influencer campaigns do have the ability to track “digital cookie crumbs” of who went where, and where people came from on a website. So while it may be just as difficult to produce “hard evidence” of ROI, social media and influencer campaigns can yield a lot of rich insights on customer behavior. And there is always an option of digital coupons for referrals and sales if more direct tracking is required.

Charles Dimov
Guest

Any influencer marketing campaign needs to measure a few things. First are the traffic metrics (web traffic growth, time on page, bounce, or on social engagement rates, share and likes). More importantly, in retail you need to watch the product page traffic and purchases. But don’t just measure it during the influence event. Monitor it over the next week or period of time. Set up an experiment to measure before and after influencer levels. That’s the ONLY way you can tell if it made a difference, and what the ROI was.

Glad to hear that more marketers are thinking about this, rather than forking out large chunks of the marketing budget to celebrities with ambiguous results. I like the direction toward micro-influencers too. This is definitely the right path.

Phil Masiello
Guest

We measure everything against the sales generated. Influencer marketing is way overhyped as a sales and profit generator. What is an influencer influencing if not product usage? By definition, they should be influencing sales and use of the brand.

The brand can measure the influencer’s effect by viewing the influencer’s past engagements to determine the true number of unique visitors. A brand can test the influencer and determine how many sales are generated from the engagements either by using a specific coupon or tracking visits from the influencer to the site. There are a number of ways.

Our guess is that influencer marketing has become the new “vehicle” so everyone wants to say they are using it without truly measuring the impact.

Certainly, there are very specific examples of influencers who have driven direct sales. But they are few and far between. Most of the time, the cost far outweighs any return — in our experience both building and managing brands.

Ian Percy
BrainTrust

First, I think there’s a big difference between “influencer marketing” and “word-of-mouth marketing.” Personally, I regard the latter as more genuine and credible — and I believe that it is more likely to lead to “engagement.” Engagement is a personal and emotional decision one makes and not a mechanistic one that can be engineered.

Regardless, it is very difficult to isolate a specific ROI for any marketing strategy. Marketing is not some lab experiment where you can control all the variables. The only exception to that is going from no marketing strategy to a marketing strategy. Net is, do sales and profitability go up or not?

Ralph Jacobson
Guest

The value of social followers has always been the metric to measure, versus the simple quantity. Although ROI can be murky, you need to segregate the targeted category/product performance from as many internal (your enterprise) and external forces (local events, news, weather, competition, etc.) as you can to see the performance based upon the (hopefully) singular factor of the influencer versus without the influencer. Easier said than done for sure, however leveraging hyperlocal demand forecasting versus actual results is one tool to employ.

Anne Howe
Guest

Influencer marketing cannot be isolated from the marketing mix when looking at ROI. It’s more challenging because of the difficulty in measuring what effect influencer communications have on emotions. And we know consumers cannot articulate what’s in their “emotion center” — the subconscious mind. The answer to the ROI dilemma is a willingness to invest in a long-term mix model, AND a model that tests and learns what type of messaging creates shifts in emotions that actually trigger purchases.

Patricia Vekich Waldron
Staff

Brands’ overall marketing mix should absolutely contain influencers, and be measured as part of a portfolio. I’m glad to see the trend moving to higher-quality content vs. quantity.

Michael La Kier
BrainTrust

Attribution in marketing is difficult, regardless of whether influencer marketing is part of the mix. Historically, the more a medium reaches consumers the easier it has been to measure (think TV and radio); the more a medium engages and asks people to do something, the more difficult. Engagement is a good metric, but it’s simply not enough today. Brands should establish metrics to understand the results of influencer marketing from several dimensions, rather than solely relying on reach or engagement.

Ken Morris
BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
3 years 2 months ago

Fuzzy is a good word to describe social media and influencer marketing. It is challenging to quantify the ROI, but there are a few tools that help. Awareness and engagement are good metrics to measure but, at the end of the day, it is revenue that really matters.

With unique affiliate links for each influencer, you can track online sales that came directly through the influencer’s social channel (assuming the consumer buys right after seeing the social content). Google analytics also help identify consumers’ path to purchases on your website. One of the best ways to measure is with a unique promo code for each influencer that tracks the sales to individual influencers. If you don’t give consumers a reason to identify how or where they found out about the product, they won’t and then you can’t track it. That’s what makes it fuzzy!

Joel Rubinson
BrainTrust

Influencer marketing is different than word of mouth. The latter is free and the former costs A LOT! I hear celebrities can get up to $1 million for promoting something to their followers. Even more affordable influencers charge at least five figures. In some industries it is thought to be critical so must be done but how to measure — surveys? Matching lists? There’s really no great roadmap yet.

Ken Lonyai
BrainTrust

The payless Palessi marketing experiment says volumes about “influencers” and where their loyalties/judgements lie. It illustrates the scramble for anyone to gain enough followers to tap the perceived remuneration of brand sponsorship, for the influencer’s sake, with benefit to a brand often a secondary concern.

So the best thing a brand can do is borrow from couponing and give each “influencer” a unique code that can be used by inflencees for a discount or perk that will give a reasonable measure of impact on direct sales. Indirect sales will always be open to interpretation no matter what the medium and/or who delivers the message.

Cate Trotter
Guest

It’s interesting that so much of this piece talks about things that seem like they should have been an obvious given — quality over quantity, engagement, authenticity…. It makes sense right? It makes you wonder why they’re only just realising it? If a brand has just been signing up everyone and anyone as an “influencer” then it’s no wonder that they may be unconvinced about the ROI. Finding the right person, someone who genuinely clicks with what you do and has an engaged, active following that they can authentically communicate that to is far far more valuable than a scattergun approach.

Shep Hyken
BrainTrust

There are two reasons to engage an influencer. First, is exposure. Simply getting your name out and letting the public (the influencer’s followers) know you exist. Second is true business, as in clicks and sales. Sometimes you can’t have both. Is the influencer niched in the audience you want? Or, is he/she have a broad following? A niche means less exposure, but it could also mean that whatever exposure you get is to the right audience. So, look at two metrics separately: number of impressions and number of clicks/sales, as in tangible connections and ROI.

Min-Jee Hwang
Guest

Ideally, you can measure this just like any other marketing initiative — by directly tracking the influencer’s social media post through to customer engagement followed by the conversion, most likely a purchase, download, etc. Doing so is tricky, of course, but could be made easier by providing the influencer a discount code that users can enter at POS. For word-of-mouth influencer marketing, you’d more have to track conversions based on location, device, etc if there’s no concrete way to measure a conversion that came from a specific influencer.

Bethany Allee
Guest

Yes, the shift to engagement makes sense.

My formula for measuring: (It’s hard to take this next sentence seriously) I just watched the documentary Paris Hilton made on digital influencers, “The American Meme.” It’s thought-provoking and worth a watch. The relevance to this discussion is that there are hard and fast ways to track influencer marketing. In the documentary they break down the stats and frankly, it is disturbing how much pull influencers have in our lives — and we’re all impacted.

wpDiscuz
Braintrust
"While it may be just as difficult to produce 'hard evidence' of ROI, social media and influencer campaigns can yield a lot of rich insights on customer behavior."
"Influencer marketing is different than word of mouth. The latter is free and the former costs A LOT!"
"Attribution in marketing is difficult, regardless of whether influencer marketing is part of the mix."

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