Influencer strategy - how to track the ROI from your influencer campaign with unique coupons; which influencers to work with - nano or micro influencers?
“Influencer - someone who affects or changes the way that other people behave, for example through their use of social media.” (Cambridge)
Brands started working with influencers, paying increasingly higher salaries for product placements, without being able to measure the quantifiable gains from such collaboration, and the influencer bubble grew and grew until brands started measuring how much the influencers actually brought them for the money they paid them. ROI did not match.
The reasons behind the “fail” of investing in placement on macroinfluencers’ (over 100K followers) accounts were, amongst others:
- As more and more people were doing sponsored posts/videos, the customers started shifting their behavior and not being influenced by sponsored posts as much as previously (they started treating those just like TV ads, with low interest);
- As the “paid” influencers were getting more and more jobs, their posts ratio between “normal” and “sponsored” content shifted, making their accounts look non-genuine and spammy, lowering the interest of the customers;
- Many influencers started promoting products that did not match their accounts (fashion bloggers promoting food, tech bloggers promoting clothes) - losing their influence further;
- The rise of competitiveness, the “salary” based on the number of followers caused a trend for social media tools that enabled influencers to superficially grow their channels (buying followers, buying engagement, buying comments, having comment bots, like bots, follow bots, massive following, massive unfollowing). This resulted in influencers with a huge following but little to no ROI for the companies;
- In case the goal of influencer campaigns was not focused on direct sales increase but rather on brand awareness or brand loyalty, the performance of the campaigns was highly questionable due to fake followers.
What happened after? In 2017/2018, brands moved from collaborating with macroinfluencers to collaborating with microinfluencers (under 100K followers) in hope those would bring them more benefits, as their influence was more genuine. The investment seemed to make more sense as those were still having a real following (not a paid one) and as they had not worked too often with sponsored content before, they were still “trusted” by their audience.
The issue started coming back at the end of 2018, when it turned out that the microinfluencers’ sponsored posts were also viewed as ads in the eyes of customers. Smaller following, same problems. Lack of trust, lack of real influence (fake following became popular also among microinfluencers who wanted to get higher rates), the main benefit are the higher engagement rates and lower compensation rate.
On the bandwagon of going small, the influencer marketing has discovered a new potential, “nanoinfluencer”. A nanoinfluencer is someone with less than 10K followers, genuine engagement and trust from their audience, who can really convince their audience about something, who can, according to the Cambridge definition, “affect or change the way that other people behave“ without having to buy followers, do paid post promotion, or pay for engagement. Actually, just going back to where all the big accounts started.
Nanoinfluencers do paid sponsorships or affiliate links, very often being paid just with the products they receive. They blog/vlog/instagram just because they like it, they have the time to do it, they enjoy it. Having partnerships is not a source of income for them, rather a secondary gig. People who become nanoinfluencers are often college students, stay-at-home mums, photographers, people genuinely involved in one specific hobby/topic, involved in their community, influencing their community offline as well. Truly convincing and influencing their small audience.
Sounds like a dream for the companies: real influence, low cost of investment, genuine interest in the product.
Is the nanoinfluencer market the go-to, out-of-the box strategy for 2019?
Will it solve the issues that occured with the “big” influencers?
Unlikely. With time, the same issues are likely to occur. Macroinfluencers started out as nanoinfluencers and see how it ended.
Why are nanoinfluencers not the answer to all the problems with influencer marketing?
1. They have much smaller reach than bigger accounts. Cost-wise, when we calculate how much we have to invest in nanoinfluencers marketing to get the same reach as with micro/macroinfluencers, we are at a similar cost level.
2. The issue with customers getting immune to sponsored posts is becoming independent of the size of the influence.
3. The social media “tools” to superficially increase your followers’ count or the engagement rate exist and even people with less than 500 followers use them. Beware.
4. It is still very difficult to clearly define ROI in financial terms or in engagement/brand awareness/loyalty gained thanks to sponsored posts.
If all kinds of influencers have the same pitfalls, does it still make sense to invest in influencer marketing?
Like with every investment, it depends on how you do it and it depends on whether it’s right for your business.
Tips to set up an efficient (and measurable) influencer marketing strategy:
1. Define your goal for the campaign (is it the engagement with your brand, is it the sales increase, is it brand awareness, is it brand loyalty?) and the KPIs you want to reach, in quantifiable terms.
2. Define the possible ways of reaching your campaign goals, other than influencers, and calculate how much reaching the goal 1) would cost with alternative options for investment (reverse ROI).
3. Define your budget.
4. Double-check your brand book: your style guide, your tone of voice, your message, your vision.
5. Research influencers that:
- Match your brand book,
- Have your target audience within their audience,
- Have a high engagement ratio (check if their comments are not just automatic bot comments),
- Have big enough reach to even invest in them at all (a small follower count is fine as long as it is still possible to achieve your goals with that reach and with the related costs),
- Do not buy fake followers or use bots (there are tools that can measure how genuine the audience and engagement of your influencers are) or at least do this within reasonable limits,
- Do not have a 9/1 ratio of sponsored to normal posts, a 1/1 ratio is perfectly healthy,
- The size of their following is the last thing to look at - as long as your ROI calculation seems fine, and all depends on your product and your brand, this might be the right size of influence for your brand.
6. Plan your collaboration (what your expectations are, what you can offer), fit it to the account of the influencer (expecting a pink picture background on an influencer’s profile who has only black and white photos is not beneficial, neither for your product placement nor for their influence). Every piece of content influencers create for their sponsorships needs to look natural and genuine. If you cannot find balance - maybe their style does not fit your brand.
7. Measure, measure, measure. Plan how you are going to measure your gains (sales, engagement, awareness, other), preferably with your own tracking (not provided by the influencer) and implement that into the campaign from the very beginning.
8. Compare the results to the results of alternative channels, if you gain less from influencer marketing than from alternative channels, then maybe this is not for you. Go through the points for consideration looking for possible problematic areas and optimize. If that still brings back a low ROI, probably influencer marketing does not work for you.
It all comes to planning out your strategy, knowing your alternative costs, and measuring the outcomes of your campaign. Influencer marketing issues usually arise if one of those points is missing.
Measuring your campaign’s effects might be tricky.
We have a couple of tips on how to implement reporting and measurement to your influencer marketing strategy:
- Affiliate links - Generating a unique affiliate link for an influencer allows you to track online sales made through their social channels and blog posts. Influencers typically receive commission from these sales. These links will also provide data around the number of clicks to the brand’s website, the number of sales, and the average order value for those sales. The issue with affiliate sales might be the following: the duration of the cookie of the link might be only 15-30 days (which is sometimes not enough, customers do not necessarily buy the product right after seeing the content of the influencer) and some customers do not “trust” clicking on affiliate links (they think they might be charged more).
- Unique discount codes - can be distributed amongst the influencers to be implemented in their stories/vlogs/posts/Instagram posts. Many platforms (like Instagram for example) do not support adding links to the posts. By adding personalized discount codes, you make sure you track how many transactions the influencer brought to your company. It can be used to base your “salary” for the influencer on (there are companies who simply pay a percentage of sales as affiliate sales for the influencer) or to base your fixed rate for sponsored content on for further collaboration (it gives you an idea of what this collaboration is worth to you), in case you do not want to pay the percentage of sales. In any way you use it, it gives you a good measure of what the influencer is bringing to your company in terms of sales.
For more inspiration, check out our Ultimate coupon marketing strategy guide.
- Personalized vouchers - for those influencers you do not want to send a free product to (especially for nanoinfluencers), you might want to give an incentive to work with your brand, like a discount on the existing portfolio (this way, they can actually choose a product of their preference, which ensures the product they review will have more chances to be liked and to be positively and genuinely reviewed). By giving them a personalized voucher, you can easily track which vouchers were validated and follow up with those who have bought your product, on the further collaboration. It is especially useful if you want to address a big group of influencers at the beginning, you can automatize the first communication with them and save time on approaching them one by one. Later on, in case first collaboration worked out, you can still approach them personally.
If you do not know how to use personalized vouchers and unique discount codes for your brand, contact us. Voucherify’s team is happy to help!
- Engagement with your own channel/your brand - in case the campaign is focusing on the engagement with your brand, request the influencer to direct the customers to your website (then you can easily see the traffic coming from a social media reference) or to your channel (in case of placements where a link cannot be used) - you can measure then your own follower/engagement rates change. A good practice is creating your own hashtag that the influencer would use and see how popular it gets - this also works well paired with some contest on your brand’s side (remember to always keep your goal and your brand book in mind in case of any contests and any campaigns in general). With the amount of participants in the contest, you can measure the gained engagement with your brand. You can also see how much of this engagement fades away with time (let’s say after 1 month from the initiative) and see what real gains are.
- Brand awareness - you can measure the amount of times the post has been seen but here we have again the issue of “fake following” which can distort the data. You can measure the traffic coming from the social media of your influencers (with any tracking software) or, in the case of channels where they cannot share links, you can try to isolate your marketing activities to define how much this one brings in. You can measure the influencer campaign’s impact as: traffic - predicted traffic without campaigns - traffic from other campaigns that you measure. The same goes for sales increases or share of voice, if you can calculate all other activities, this one is the remainder.
- Share of voice, mentions - with social tracking tools such as Brandwatch or Social Mention you can measure what (and where) people are talking about your brand as well as about competitors’ brands. The results are more qualitative than quantitative but if you want to position yourself as a brand, this data is relevant. Influencers can influence what the others say about your products/brand and how often they mention you. This is a very valuable source of data for measuring influencer campaign.
- Consider using your influencers’ posts for sponsored ads. It is a controversial technique (why would you pay additionally for sponsoring their posts if you are already spending on them?) but it might work in some cases (sponsored content gets more reach and if the content is good and resonates more with your customer than the one your brand creates, then it might be a win). You can also measure your campaign’s impact directly.
- Costs of content creation saved
- - influencers provide you with free content you can use across your channels. You save the costs on models, camera person, make-up artists, travels, rental of the studio… your ROI can be the costs you’ve saved on making that content yourself and just use it on your channel.
Influencer marketing has great potential for most brands. Like any marketing strategy, it needs first the analysis and understanding of your goals and your brand, to find a perfect fit. You can experiment and learn from it, if you have planned ahead your KPIs and tracking measures.
Voucherify will happily support you with implementation and tracking of the personalized influencer vouchers and unique discount codes, to start-off your very first measurable influencer campaign.