Influencer marketing and pay-per-click (PPC) advertising are two powerful digital channels for customer acquisition. But which delivers greater ROI? This 4000+ word guide examines the costs, benefits, and performance of influencer campaigns compared to PPC to determine the most cost-effective strategy.
In today’s digital landscape, brands rely heavily on influencer marketing and PPC advertising to achieve their awareness, engagement, and sales goals. But with limited budgets, marketers need to identify the channels delivering maximum ROI.
We’ll compare influencer marketing and PPC across these dimensions:
- Cost structures and spending range
- Impact on brand metrics
- Performance tracking and optimization
- Pros, cons, and use cases for each strategy
Evaluating these factors provides data-backed guidance on allocating a budget between the two to maximize returns.
Cost Structure of Influencer Marketing
Influencer marketing costs vary based on audience size and campaign scope:
- Under 5k followers
- $100 – $500 per post
- Drive high engagement for microbrands
- 5k to 50k followers
- $500 – $2500 per post
- Balance reach and relevance
- 50k to 500k followers
- $1000 – $10,000+ per post
- Expand awareness with mass reach
- 500k+ followers
- $10,000 – $100,000+ per post
- Garner viral attention
Complexity also impacts costs. Video content, multi-part campaigns, and exclusive IP cost more. But even mid-tier influencers can produce ROI.
Cost Structure of PPC Ads
Bidding models and traffic drive PPC costs:
Search Engine Marketing
- Google, Bing, etc.
- Cost Per Click (CPC) model
- $1 – $50+ per click depending on competition
Social Media Ads
- Facebook, Instagram, etc.
- Cost Per Impression (CPM) model
- $1 – $20+ per 1000 impressions
- Programmatic display networks
- CPC or CPM models
- $0.05 – $5+ per click or 1000 impressions
Target demographics, intent, and placements impact costs. Retargeting existing users is more affordable.
Influencer Marketing ROI Potential
Calculating potential ROI helps gauge budget feasibility:
- 50,000-follower lifestyle influencer
- Sponsored Instagram posts and Stories
- Fee of $750
- Promotes a $100 online course
- Post reaches 25% of followers: 12,500 impressions
- 1% click the link: 125-course views
- 8% convert to sale: 10-course sales
- Total revenue from sales: $1000
Revenue from sales minus cost of influencer: $1000 – $750 = $250
Returns $250 on $750 spent. 33% ROI
Mid-tier influencers can deliver healthy ROI. Nano influencers may produce 100%+ ROI on ultra-low spends.
PPC Ads ROI Potential
Modeling potential returns gives a sense of viability:
- Targeting users searching “social media course”
- 100 clicks per day at $2.50 CPC from Google Ads
- 1% conversion rate on the landing page
- 100 clicks per day at $2.50 CPC: $250 daily spend
- 1 sale generated from 100 clicks per day
- 30 sales per month
- Revenue from 30-course sales/month: $3000
Monthly revenue minus ad cost:
$3000 – $7500 = $2250
Returns $2250 on $7500 spend. 30% ROI
Robust targeting and optimizations can make PPC profitable. But costs add up at larger scales.
Brand Impact Comparison
Beyond direct sales, we must weigh holistic brand impact:
- Influencer – Expand reach among new demographics through creators. Cultivate niche communities.
- PPC – Drive massive additional impressions and searches through broad targeting across the web.
- Influencer – Enhance brand image and connection by aligning with personas. Content feels authentic.
- PPC – Interruptive ads may be skipped or ignored, especially on low-intent placements.
- Influencer – Third-party advocacy and storytelling build credibility.
- PPC – Users associate ads with some promoter bias. The brand itself is communicating.
While PPC enables bigger reach, influencers better nurture customer relationships and connections with a brand.
Performance Tracking and Optimization
Sophisticated analytics inform budget allocation between the two:
- Track engagement, clicks, and conversions per post
- Measure ROI for each influencer partnership
- Refine creator mix based on performance data
- Develop tiers and packages to maximize returns across segments
- Track clicks, CPC, conversions, optimizations over time
- Adjust bids and targets based on campaign data
- A/B test different creatives and landing pages
- Build out a negative keywords list for efficiency
Leverage analytics to continuously improve the performance of both channels.
When Influencer Marketing Works Best
Look to influencer marketing for these use cases:
- Brand building – Building awareness and affinity through content
- Launches – Generating buzz for new products
- Micro-influencers – Cost-efficient channel for hyper-targeted reach
- User-generated content – Creative assets at scale
- Conversations – Two-way engagement with followers
- Reviews – Credible opinions about experiences
Influencers blend seamlessly into customer journeys if brands align values and work collaboratively.
When PPC Ads Excel
PPC ads deliver results across these scenarios:
- Traffic driving – Instant influx of site visitors at scale
- Top-funnel awareness – Casting a wide net through universal targeting
- Middle-funnel consideration – People searching for solutions can be guided to your brand as an option
- Hyper-targeted – Zeroing in on precise demographics and interests
- Flexibility – Launch, pause, and iterate campaigns quickly based on data
For commoditized products especially, PPC provides an always-on sales engine.
Pros and Cons Comparison
- Drives authentic brand connection
- Leverages creators’ audiences
- Highly creative branded content
- Consumer trust in recommendations
- Time intensive workflow
- Content production costs
- Niche audiences in some cases
- Metrics not as easily tracked
- Measurable real-time data
- Complete control and flexibility
- Ability to launch quickly
- Adjust bids and targets anytime
- High cost at scale
- Low conversion rates for untargeted audiences
- Ad blindness and banner blindness
- Impacts brand experience on-site
Balance is ideal harnessing the upsides of each and mitigating the downsides.
Best Practices for Maximizing Returns
Follow these tips to optimize budget allocation between influencers and PPC:
Conduct Audience Research
Analyze historical marketing data and surveying to map your key buyer personas in detail. Identify frequented social platforms, media consumption habits, psychographics, etc. This informs channel selection and targeting.
Set Clear Goals and Benchmarks
Define quantitative outcomes sought like sales, traffic, or awareness lift for each initiative. Historical performance data enables fair goal-setting. Track rigorously against goals.
Make sure influencer contracts and agency statements of work document deliverables, schedules, approvals protocol, reporting requirements, and success metrics thoroughly.
Take an Omnichannel Approach
Use multiple marketing levers like SEO, email marketing, and social along with influencers and PPC for 3600 customer engagement.
Learn from Top Performers
Analyze your highest ROI campaigns across both channels. Isolate what made them successful whether target segment, creative, messaging, etc., and optimize accordingly.
Regularly Audit and Adjust
Audit your marketing technology stack, media mix, and partner roster every 6 months. Cut underperformers and inefficient spending. Fund initiatives are generating real traction.
With strategic planning and execution, brands can benefit from influencers’ authenticity and PPC’s precision targeting. Measure carefully and allocate a budget to balance awareness and consideration.
In closing, a hybrid paid media approach utilizing both influencer marketing and PPC can attract, nurture, and convert customers across the purchase funnel. Brands will reap greater traction blending influencers’ credibility and creative content with the wide reach and measurability of PPC. Rigorous tracking, optimization, and realigning spending toward high ROI allow for maximizing the strengths of both. Rather than an either/or decision, find the right synergy between influencers and PPC.