Influencer marketing has grown to be a 21.1 billion dollar industry. In an industry that has proven to drive sales and boost revenue, it is vital to measure one that has been proven to work time and time again. Knowing how a business can assess the return on investment (ROI) from influencer marketing is imperative whether measurements are quantitative or qualitative – or better yet, both! Knowing and understanding ROI measurements will help improve campaigns all around.
“Return on Investment” Definition
- Evaluate Key Performance Indicators
When it comes to how a business can assess the ROI from influencer marketing, it is vital to set specific goals and key performance indicators (KPIs). This allows marketing campaigns to be based on measurable objectives instead of intuition or blind trust in an influencer. However, tracking ROI when it comes to influencer marketing can present a large challenge for companies.
KPIs might include tracking brand sentiment, website traffic, subscriptions, and sales. Specific tools to measure KPIs include having the influencer use a hashtag or promo code for the duration of the campaign, as well as UTM codes and tracking pixels for blogs. This allows marketers to draw up a full report at the end of a campaign.
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2. Define and Analyze Clear Goals
By setting concrete goals for the marketing campaign, it becomes possible to effectively measure the ROI of a campaign and create measurable objectives to work from.
For example, to increase brand awareness, measurable objectives might include:
- Increase email subscribers by X amount each month
- Increase TikTok reach and impressions by X amount each month
- Increase click-through rate from influencer’s socials to the brand’s site by X amount for the duration of the campaign.
Determining whether your brand was able to reach these goals can help your business assess the ROI from influencer marketing. Perhaps, however, if the metrics end up more or less than the original goal, it can be clearer where to adjust expectations and the marketing plan as a whole.
3. Conversion is Key
If 2024 was the year of shoppable features, 2025 is about leveraging those conversion rates to assess ROI from influencer marketing. A conversation occurs when an influencer’s audience takes an actionable step, purchasing a product or downloading an app. This measure easily shows return, as opposed to simple likes and clicks.
TikTok shop is a prime example of direct audience conversion. In 2023, TikTok contributed $24.2 billion to U.S. GDP and $14.7 billion to the revenue of small-business owners. Additionally, an estimated $7 million of product is sold each day in the US thanks to TikTok Shop Marketplace. TikTok’s shoppable features are a powerhouse when it comes to driving sales and revenue and looking at how a business can assess the ROI from influencer marketing.
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4. Influencer-Generated Content
Influencer-generated content is a goldmine when it comes to conversion. Because the influencer has built trust with their audience, any paid ad created by the influencer who knows and understands their fanbase will likely bring an increased interest in the service or product.
The ultimate measurement of conversion should be in dollar sales growth. The amount of revenue generated from purchases is a key indicator of ROI.
@addisonre @YSL Beauty CANDY GLAZE IN SHADE 15 #YSLBEAUTYPARTNER 💕💕💕💕💕💕💕💕💕
A recent example of influencer-generated content is Addison Rae’s recent partnership with YSL Beauty to promote their new lipstick. Her audience trusts her brand – her image, fashion taste, and take on beauty trends – therefore making them more likely to interact with the post and buy the product.
5. Increasing and Optimizing Brand Awareness and Engagement
It is important to note that ROI can be measured qualitatively. In this case, an influencer marketing campaign may be looking to increase brand awareness. The metrics of this are less concrete than measuring revenue, but just as important. Reach, impressions, social media mentions, search volume, and traffic can give you an idea of how far your brand reaches.
Not to be confused with awareness, brand engagement is the number of people who engage with your band, whether by liking, commenting, or sharing. A cost-per-engagement model is a good way of measuring how a business can assess ROI from influencer marketing. Engaged audiences offer a higher likelihood of becoming loyal customers, thereby driving revenue.
Formulas to Note
When it comes to metrics, there are a few formulas to note:
Engagement by Reach
This is the most common metric when calculating how a business can measure the ROI of influencer marketing. It calculates the engagement efficiency of a post by taking the total engagement, or interactions of a post and dividing by reach (followers and other viewers).
- Divide total engagements per post by reach per post. The sum will be the total engagement by reach.
- Multiply by 100 to get a percentage.
Engagement by Impressions
Sometimes, a post reaches an audience multiple times. Calculating your engagement by impressions takes this factor into account.
- Divide total engagements per post by impressions per post. The sum will be the engagement by impressions.
- Multiply by 100.
Cost Per Engagement
This is most useful when working directly with an influencer, cost per engagement calculates your return on investment in exchange for the fee of running a paid campaign.
- Divide the total spent on a campaign by total engagements related to that campaign. The sum will be the cost per engagement.
- Multiply by 100.
Daily Engagement Rate
Daily engagement rate is useful when tracking how often an audience engages with a brand, or specific account daily. Here’s how to calculate engagement:
- Divide total engagements in a day by total followers.
- Multiply by 100.
Overall, there are many ways to measure ROI. Whether it is measuring interactions such as likes, comments, or shares of a post, or measuring conversions and click-through rates, marketers must define what metrics are most important when it comes to their campaign.
