Analysing the True Effectiveness of Influencer Marketing

Feb 16, 2024 by
Analysing the True Effectiveness of Influencer Marketing

While it might have begun life as something of a fringe concern in digital marketing, influencers have more power and hold more sway with the public now than ever before. At the end of 2023, the global influencer marketing market value stood at over £20 billion and it’s only going to expand as platforms like TikTok start to gain more traction with consumers.

Influencer marketing blurs the lines between traditional advertising and peer recommendations, finding that perfect middle ground that feels both authoritative and sincere. However, it’s also a style of marketing with its own quirks and it deserves to be analysed in a slightly different way to more traditional marketing models.

Today, we’ll be taking a deep dive into the metrics and return on investment (ROI) of influencer marketing and offering guidance on choosing the right influencers to represent your brand.

The Rise of Influencer Marketing

While it has evolved to mean many different things to many different people in recent years, at heart influencer marketing involves brands partnering with social media influencers to promote products or services. This strategy wields the trust and respect these influencers have built with their audience as a potentially powerful tool for brands.

Understanding Influencer Marketing ROI

ROI is generally calculated by comparing the revenue generated from influencer marketing campaigns to the cost of running them. It provides insights into the campaign’s financial impact and helps in making informed future marketing decisions.

Several metrics are crucial in assessing the effectiveness of influencer marketing campaigns:

Engagement Rate – This includes all social media statistics such as likes, comments, shares, and views. High engagement rates often indicate that the content is resonating with the audience and influencers with higher rates will typically reach more people.

Reach and Impressions – The number of people who have seen the content.

Conversion Rate – The percentage of the audience that takes the desired action, such as making a purchase or signing up for a newsletter. This is arguably even more important than engagement rate, particularly for brands that rely on volume of sales.

Cost Per Engagement (CPE) – The cost of each interaction with the content.

Brand Sentiment – How the audience perceives the brand after influencer promotion. Choosing the right influencer at the right time for the right product or service is the best way to ensure this is on the right track.

Choosing the Right Influencers

Selecting the appropriate influencers for the job is crucial for the success of a campaign. You wouldn’t, for example, hire a health and wellness influencer to promote a sugary energy drink and you wouldn’t hire a young videogame streamer to front a campaign for a luxury whisky brand.

Influencers should always align with your brand’s values, aesthetics, and, most importantly, your target audience. Look for those that have genuine, regular, interactions with their audience and one that’s prolific on platforms that are used by your consumer base.

Types of Influencer Collaboration

Of course, there are also different types of influencer collaboration to consider. The most obvious is sponsored content, which sees a brand paying the influencer directly to promote them through their own channels. Product reviews and giveaways, meanwhile, are more subtle ways to draw in an audience and are perceived as being more trustworthy, though there’s always the risk the influencer might not gel with your brand.

The deepest form of influencer collaboration is a brand ambassador program, which would see the influencer sign a long-term relationship with your brand and become a figurehead for it. When it comes to these kinds of influencers, it’s paramount that you ensure you’ve got the right person for the job as a mistake could prove very costly indeed.

The Future of Influencer Marketing

The influencer marketing landscape is continuously evolving with new trends and technologies and keeping up with these changes is vital for brands that wish to remain competitive and relevant. One thing will, however, always remain true, regardless of the tech behind it – influencer marketing is most effective when it feels authentic.

Transparency, especially regarding sponsored content, will always be key and you won’t find influencer marketing very effective without it. So, whether you’re using smaller, more engaged micro-influencers or are dipping your toes into the big leagues, always be open with your audience.