Many Australian small and medium enterprises (SMEs) are curious about influencer marketing, but often the biggest question is: what kind of return on investment (ROI) can we expect? It’s a valid concern. Unlike some marketing activities, influencer ROI isn’t always immediately obvious. We’ve seen a significant shift in the last few years, with businesses moving beyond ‘vanity metrics’ like likes and focusing on genuine business outcomes.
Traditionally, measuring influencer ROI meant tracking website traffic or using unique discount codes. These methods still have value, but we now advocate for a more holistic approach. Here are a few key insights to help you analyse the profitability of your influencer campaigns:
- Attribution Modelling: Don’t assume the first click wins. Customers often interact with multiple touchpoints before converting. Implement attribution modelling – even a simple ‘first touch’ or ‘last touch’ model – to understand how influencers contribute to the customer journey. This gives a more accurate picture than solely relying on direct sales from a discount code.
- Incremental Lift Analysis: Compare sales during an influencer campaign to a similar period *without* the campaign. This ‘lift’ represents the incremental revenue generated, helping you calculate a clear ROI. This is particularly useful for brand awareness campaigns where direct sales aren’t the primary goal.
- Customer Lifetime Value (CLTV): Consider the long-term value of customers acquired through influencers. A customer acquired through an influencer might be more loyal or spend more over time. Factoring CLTV into your ROI calculation provides a more comprehensive view of profitability.
- Brand Sentiment Analysis: Influencers impact brand perception. Use social listening tools to monitor changes in brand sentiment during and after a campaign. Positive sentiment can translate into increased sales and brand equity, which, while harder to quantify, is a valuable return.
It’s important to remember that influencer marketing isn’t always about immediate sales. Building brand awareness, establishing credibility, and reaching new audiences are all valuable outcomes. However, to justify the investment, we strongly recommend establishing clear Key Performance Indicators (KPIs) *before* launching a campaign and consistently tracking your results. Don’t be afraid to test different influencers and content formats to optimise your approach.
To get started, we suggest outlining your campaign goals, identifying relevant influencers, and implementing a robust tracking system. A well-planned and carefully measured influencer strategy can deliver significant returns for your business.
