Influencer marketing continues to grow rapidly in popularity as a means of generating brand awareness, engaging consumers and driving sales. However, the evolving nature of budgets and platforms raises the primary question for any campaign that is: How to select the right influencer that will also provide the highest probable return on investment (ROI)?

Influencer marketing ROI requires a different kind of perspective on success and on how to identify the best influencer. The relationship between the influencer and your target audience, combined with their credibility, relevance and whether they align their interests or objectives with your brand’s, is critical to maximising ROI for your influencer marketing efforts.

Why Influencer Selection Impacts ROI

Two examples illustrate the importance of selecting influencers based on their ability to connect with the target audience:

Example 1: A creator with millions of followers but little relevance to your brand may generate ‘reach,’ but not deliver results. 

Example 2: An influencer with fewer followers, but whose audience is highly engaged with their content, has a higher probability of producing conversions.

Therefore, your organization must have a well-defined approach to selecting the right influencer prior to executing your marketing strategy. Companies that take an analytical approach and use data and creativity as inputs into their decision-making process for selecting influencers consistently outperform brands that only measure ‘vanity’ metrics when choosing their influencer.

Step 1: Clearly Define Your Campaign Objective 

Before selecting your influencer shortlist, your brand must define what the success of the campaign will be (brand awareness, brand engagement, traffic to the website/app installs,/sale). 

Depending on which objective you select, you must have the specific influencer profiles. When you want to achieve brand awareness, your influencers should have high reach; however, if conversion is the goal, you should focus on finding influencers who have a very high level of trust from their audience and strong audience influence. 

Clearly defined objectives, in addition to making it easier for you to measure the ROI of your influencer marketing efforts, will create an environment where you can measure the success of the campaign through assessments.

Step 2: Determine Your ROI on Micro and Macro Influencers

A common dilemma brands encounter is deciding between micro vs. macro creators to achieve the goals of their influencer marketing campaign.

Macro influencers offer the publicity of being a very large (or well-known) influencer to create a lot of visibility and/or immediate recognition (with brands). Therefore, they are a great value when the goal is to create instant brand awareness or to launch a new product. The downside of using macro influencers is that they usually have lower engagement rates (on their content), in addition to their fee being significantly more than that of micro influencers.

By contrast, micro influencers can provide higher levels of engagement and more trust from their audiences. Since their communities are based on a specific niche, they are more apt to provide value for targeted campaigns. Usually, the micro vs macro influencers ROI will be much higher when the success of your campaign is outcome-oriented.

The smartest approach would be to leverage the benefits from both macro (to create brand awareness) and micro influencers (to drive engagement and conversion).

Step 3: Analyzing an Influencer’s Engagement Rates

The influencer engagement rate is a great indicator of their ability to connect with audiences. Elements such as likes and shares, comments and saves and story/users interaction all show how much an audience is responding to the influencer’s content.

Higher the influencer engagement rate, the more credible they appear and the more likely their audience is interested in them and their content. Brands should evaluate engagement in more than just average likes but also look at meaningful interactions like comments/replies and shares to assess if a creator is influencing others, rather than just how visible they are.

The quality of the engagement is more important than the quantity of the engagement.

Step 4: Influencer Audience Analysis 

Understanding who their audience is is key to finding the right influencer. Influencer audience analysis helps a brand identify the influencer’s audience through demographic information, interests, geographic location, purchasing power and their typical purchase behaviour.

The audience should be as close to the brand’s desired target market as possible if the influencer has high-performance levels; however, if the influencer’s audience does not fit the target market, then the influencer will not provide a good return on investment. The key metrics used in evaluating an influencer’s audience are the authenticity of the audience, the quality of followers and the reliability of engagement.

Completing the influencer audience analysis will eliminate poor fitting influencers from being considered for a collaboration and ensure that the marketing resources allocated are used effectively.

Step 5: Finding Influencers for Your Brand 

This step involves assessing the influencer selection strategy. 

Influencers can be referred to or viewed as storytellers and as such, they will have a tone of voice, visual aesthetic and way of communicating that will need to match with what your brand is trying to achieve. If your brand’s partnership is forced or creates a sense of ‘inauthenticity’ to the audience, then the post will not convert.

Before selecting influencers, brands should evaluate their histories of partnerships with influencers by reviewing their key performance indicators (KPIs) such as previous collaborations, how many pieces of organic content they have created and the responses received from their audiences, which will both support the claim that a creator who is a good fit for the brand will produce authentic, persuasive content that can increase an influencer’s marketing ROI.

Step 6: Rather than using one-time partnerships utilize long-term collaborations

Although a one-time post by an influencer can create a short-term excitement, a longer-term collaborative partnership will result in a stronger connection to your brand and therefore create a higher level of brand recognition and trust.

From an ROI perspective, long-term partnerships offer opportunities to create cost savings in acquiring new customers, improve the overall quality of content created by the influencer, provide credibility to the brand through an influencer’s brand experience and result in the influencer (brand ambassador) having an increased knowledge of the brand and subsequently the ability to better convey the story of the brand to their audience.

Step 7: Monitor Performance Continuously and Adjust Accordingly

The last step to learning how to choose the right influencer for improving ROI is through measurement. The performance of the campaign should be evaluated through reviewing KPIs, such as reach, engagement, traffic, conversion and cost per result.

The data will enable the brand to evaluate what type of criteria should be used in determining their influencers in future campaigns, and through constant optimization, the campaigns will improve from learnings rather than repeating mistakes.

Step 8: Execution’s Purpose

Creative execution is equally as important to a successful influencer selection as the influencers themselves. The content created for an influencer should be platform relevant, visually stimulating and elicit strong emotional reactions from the target audience. High-quality production value adds to the story and enhances the impact of the campaign overall.

Production companies are instrumental in helping brands align their overall goals with an influencer’s creativity, thereby producing mutual performance and brand value from the campaign.

Conclusion 

While choosing an effective influencer may involve both science and art, brands looking to develop engaging influencer marketing campaigns focusing on relevance, number of potential engagements, available audience data and a commitment to long-term returns will generate a higher-than-average ROI on their investment in influencer marketing.

A detailed understanding of the ROI (return on investment) of both micro and macro influencers and analyzing each influencer’s engagement rate as well as gaining in-depth knowledge about each influencer’s audience is critical when developing an effective influencer selection plan.

We at Third Eye Blind Productions believe that successful influencer marketing ROI campaigns are developed through strategic decision-making, good storytelling and flawless execution, which ultimately results in a positive ROI by creating true influencer influence as opposed to just a numeric value.

FAQs

How do I choose the right influencer for my brand?

Select an influencer whose followers, values, and style of content align with your company’s vision. It is important to evaluate engagement levels and the influencer’s previous work in addition to their total number of followers for making a good selection. You will be able to build greater trust and receive a larger ROI from working with another company that has a strong brand influencer relationship.

Are micro influencers better for ROI?

Micro influencers will generally result in a larger ROI than larger influencers; they tend to have more engaged followers and established relationships with their audience. Because of this, micro influencers are generally more cost-effective than larger influencers and are often more effective for targeted conversion campaigns.

What metrics should I check before hiring an influencer?

Typical metrics that need to be verified are: engagement rates, audience demographics, genuine follower counts, substantive content production, and previous campaign history. These metrics are used for evaluating the influencer’s credibility and predicting the effectiveness of the influencer’s ongoing marketing efforts.

How can brands measure influencer marketing ROI?

Brands can use reach, engagement, website traffic, total conversions, and total cost per conversion to help calculate the ROI of the influencer. In addition to tracking these metrics useful tools can be used to track the results from an influencer campaign by tracking links, coupon codes, and analytics from all the ecommerce, social media sites, and websites.

Should reach or relevance be prioritized?

Relevancy is more important than reach. An influencer with a relatively small number of followers that aligns to their goals will provide much higher levels of engagement and conversion than an influencer with a larger number of followers who is misaligned with their goals.