Can influencer marketing prove ROI?
Most brands are grappling with the intricacies of measuring influencer marketing, primarily due to the many variables at play. However, having the ability to measure the effectiveness of influencer marketing and see its impact on sales profits is critical for justifying its investment over the long term and against other forms of digital marketing, says a report published by Influencer Intelligence called “Measuring the effectiveness and ROI of influencer marketing”.
Experts around the world were surveyed for their views on measuring the effectiveness and return on investment (ROI) of influencer marketing. Most agreed that there is a need for brands to take more control of the influencer relationship to help progress measurement capabilities.
The survey found a gradual upward trend in the allocation of marketing communication budget to influencer marketing. Though 43% of respondents said they spent less than 10% of their marketing budget on influencer marketing, 19% are allocating 11%-20% to influencer marketing and 9% are allocating more than 50% of their budget to digital talent.
“It has taken some time for brands to understand where influencer marketing should sit within their overall communications plan, and how much budget should be dedicated to it. For many, it has been treated as siloed activity, while its benefit and purpose are still being understood,” says the report.
An array of platforms are available offering end-to-end management of influencer campaigns which help with tracking and measurement of influencer work. Similarly, the rise of affiliate programmes, trackable URLs and discount codes have also made it much easier for brands to measure sales and conversions, says the report.
Despite these platforms, the report confirms that widely different approaches to measurement in the influencer marketing space prevail, with little consensus over the best way to measure.
Encouragingly, 63% of respondents said they believe their influencer marketing strategy is effective in demonstrating ROI for their brand or business, though 8% admit that their influencer marketing approach does not show clear return on investment.
“As budgets increase, and influencer marketing becomes more firmly integrated with other departments … it will be harder for marketers to isolate the results their influencer marketing budget is achieving,” says the report.
However, as influencer marketing becomes increasingly popular, marketers will need to scrutinise how it compares against other digital marketing investments. “Not every influencer will have ‘influence’, and measurement is the only way to see that,” concludes the report.
As influencer marketing comes of age, measurement will become increasingly important.
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