With all things digital, we expect results, fast. You can plug in a banner ad and credit card, and boom. Visitors start flowing in. You purchase just about any software product and within 15 minutes, you’re up and running. So in this environment of instant digital gratification you may be asking, where they heck is my ROI from influencer marketing?
Today we’ll help you calculate it! And there’s two things to know about doing that. The first, is that to find the ROI you’re looking for, you have to start off with goals in mind. And the second, is that really profitable relationships take real time. While other digital marketing channels can but much faster to the table, so too is fast food, and we both know what that does to you. If you’re willing to invest in cooking a proper meal, you’ll get far better results in the long run.
What are the positive, healthy side effects of influencer marketing? They are legion. It delivers $6.50 on every $1 invested, increases long-term reach, boosts followers, enhances customer quality, produces marketing content, and the list goes on.
So today, we invite you to eat a healthy meal and let’s explore the ROI behind it!
The first step for calculating influencer marketing ROI is to set out your goals clearly.
Begin with asking yourself the question, “what do I want from my influencer marketing program?” Some brands are trying to be seen, some are hoping to forge partner relationships, and others are just plain looking to drive revenue (and most are a combination of the three). In setting out those goals, measure where you’re starting out at today so that you have a benchmark.
Here are a few sample goals:
I want to ….
Drive an additional $2,500 in sales each month
Expose more than 500,000 consumers to my products
Increase my following on X social platform by 200%
Increase my users by X
Once the results are back in, we can calculate and compare.
Here are 7 ways for brands to calculate their influencer marketing ROI:
1. Dollars and cents: This is your good old fashioned bottom-line revenue, the life-blood of any business. You can think of it in terms either of net-new revenue generated or in terms of money saved generating the same revenue as before. Let’s explore a real life example.
The equation: (revenue earned from campaign – money spent on campaign) / money spent on campaign = ROI
GlossyBox offers deluxe beauty products in a subscription box. Because those are sold on a monthly subscription basis, their sales from influencer marketing became the gift box that kept on giving. They generated over $3k in monthly recurring revenue that continued for long after the campaign, meaning that the initially calculated $3 return on every $1 spent on the campaign will continue to double every month into the foreseeable future (minus their churn rate, of course). This is return is $3 right now, but will be $5.80, $11.17, and so on up.
For comparison’s sake, email marketing campaigns return $1.19 – $1.27 according to Marketing Sherpa.
2. Audience Reach: This has always been the common denominator for advertising, and will continue to be until the day when we’re all chipped and tracked by big brother, which hopefully is not soon. This is about getting the largest number of eyeballs on your ads so that familiarity will eventually lead to positive feelings and then a sale, while simultaneously admitting that we can’t fully track that entire journey because, well, life’s complicated. Traditionally it’s been difficult to wrangle a dollar-value ROI metric out of these exposure campaigns, but some influencer marketing platforms have used data science to calculate the dollar-value of impressions to give brands a useful benchmark.
Derma e for example uses this method. They felt confident that video was the best way to both reach their audiences and to explain the value of their products. They ran a campaign and connected with 55 beauty influencers on YouTube who helped them reach 5 million people (the total views) which led to 150k new engagements from potential customers. For a fairly inexpensive campaign, the ROI based on _____ is _______.
3. Growth in followers: This calculation goes one layer deeper than audience reach in that your goal is to amplify your voice and power future campaigns. That is, when people follow you, they’re bound to hear everything you say in the future. Every post you make to your followers is like a free CPM campaign to an already engaged audience. Thus, you can either calculate the cost that you might have spent on advertising to reach that number of people, or you can think of it in terms of the lifetime value of a follower.
For example, Fashion Nova is an affordable fashion-forward LA brand who knew that visual impressions would be everything in appealing to their target demographic. They thus focused on Instagram and grew their followers from a respectable 700k to an impressive 2.3M through a series of campaigns. On an initial goal of 1M followers, they saw a ____% return on their money invested.
4. Grow in users: For those companies that operate on a subscription model and are focused on an ongoing relationship rather than a one-off sale, user growth is extremely important. Users compound the activity and buzz around your business. They interact, provide free product testing, create their own content, and if happy, evangelize you and help you achieve a viral growth factor.
Caldwell is a great example of a men’s style brand that tailors your look to generate the perfect wardrobe, taking the hassle out of looking great. They set out with a goal of acquiring 3,000 new users and through a series of campaigns, gathered 5,600. Because they had expected to generate new users at about $1 each, and for the same spend they generated them at $0.56, they saw an ROI of ______.
There we have it! Four methods for calculating your ROI! But we aren’t even half finished, because we’re on to a rapid-fire list of the intangible benefits that to many clients, outweigh the monetary ones.
How much are these benefits worth to you as a marketer?
5. Higher quality customers: Research shows that customers brought in through influencer marketing campaigns are ___ more loyal, typically because they were better educated upon arrival because of the influencer.
6. A content creation machine: Influencers create photos, narratives, and quotes that you can repurpose in other campaigns. Fashion Nova acquired 280 pieces of content this way, and Love with Food acquired 75 videos.
7. Residual marketing effects: Influencer’ activity continues to ripple across social media long after their campaigns are done. The content they create persists on their profiles and across all of the channels that it’s shared upon, generating additional traffic, views, and clicks for years to come (albeit at a diminishing rate).
Whew, we’re all done! We hope you’re feeling far more confident about calculating your influencer marketing ROI. If you’re like us when we first started many years ago, your eyes are wide like dinner plates in contemplating the multitude of benefits to influencer marketing, both tangible and intangible. The bottom line is that it generates sales, reach, followers, marketing content, and user growth, and that seems like a pretty good return from just one of your marketing channels.
Social influencers are one of the most effective marketing tools a brand can leverage to promote awareness and customer loyalty. In fact, the majority (92%) of consumers trust an influencer more than a traditional advertisement.
While it’s easy to see how this modernized word-of-mouth marketing tactic can increase the number of people you reach, what’s not always clear is the return on investment. Because influencer marketing doesn’t always result in direct sales conversions, you might need to try other tactics to measure your ROI. Here’s how seven Forbes Agency Council members recommend addressing this challenge.
Members of the Forbes Agency Council weigh in.IMAGES COURTESY OF FAC MEMBERS.
1. Use Tracked Links
It’s imperative when working with influencers to have a strong tracking mechanism. Ask influencers to use trackable links so you can measure traffic, engagement and, ideally, conversions on your site if possible. If influencers are wary of using tracking links, it may be an indication that they are not the best fit for your needs. – Kelly Rusk, Banfield Agency
2. Create A Branded Landing Page
You must tie your influencer campaign into a branded landing page in order to measure the ROI of that influencer. The influencers can have as much free reign as you’ll permit, as long as they drive their audience where you want them to go. Once on the landing page, you, as the brand, can incentivize the users and capture their lead info for measurement data and future communication. – Kenny Eicher, The CSI Group
3. Tie Influencer Activities To Performance Channels
Influencer activations should deliver value to performance channels like SEO, generating traffic and quality links to valuable sections of your site. Map out in advance some keyword targets that you expect to improve visibility as a result of the partnership. SEO tends to be the most efficient acquisition channel, so make sure your influencer marketing efforts are benefiting it. – Jamey Bainer, PACIFIC Digital Group, Inc.
4. Understand Your Engagement Metrics
Measuring campaign engagement goals of your influencer marketing initiatives is a good indication of your brand’s awareness, loyalty, audience activities and ROI numbers. Engagement metrics such as views, clicks, likes, shares and mentions can be measured, which is ultimately solving the metric CPE, or cost per engagement. – Solomon Thimothy, OneIMS
5. Look At Your Social Media Analytics And Referrals
One of the easiest metrics to track when using an influencer is social engagement. Track your social accounts for changes in total followers as well as new unfollows. Monitor your website traffic for an increase or decline in website visits from the social network. Are there spikes that align with the influencer’s activity? Do you see an increase in sales (or inquiries) directly following their activity? – Korena Keys, KeyMedia Solutions
6. Consider The Overall Earned Media Value
We partner with influencers organically, where we mutually benefit from our collective social media engagement. Where possible, we add press tactics into the campaign for editorial uplift. We consider a mix of engagement, website traffic, campaign hashtags, influencer-linked URLs and editorial coverage metrics to come up with an earned media value. Fan comments provide anecdotal insights, too. – Gina Michnowicz, Union+Webster
7. Use Influencers To Reach Niche Audience Groups
The true value of influencer marketing lies in its ability to deliver a more meaningful message to niche groups within your target audience. Crafting very pointed messages for each of those groups and a clear role for the brand in their lifestyle can go an incredibly long way. This can help to build brand affinity among micro-audiences that may have previously brushed off your mass-market messaging. – Jess Cook, TMV Group
Like many social media infuencers, “Lil Miquela” posts photos of herself wearing high-end designer clothing with cleverly crafted captions.
She wears clothes from companies like Proenza Schouler, Coach and Balenciaga, and recommends hair products from OUAI for “keeping my strands silky smooth.” She has more than 1 million followers — most of whom are Millennials and Gen Zers.
Miquela also voices support for social causes like Black Lives Matter and has partnered with Prada on a campaign for Milan Fashion Week. She’s even released a few songs on Spotify(SPOT).
Since launching her Instagram account in 2016, the 19-year-old model from Downey, California, has become increasingly recognizable on social media. Her dark brown hair is often styled in double buns. She has freckles, brown eyes, bangs cut straight across her forehead, and goes to popular events like the music festival Coachella.
But in April, she made a confession.
“I am not a human being,” she wrote in an Instagram post. “I’m a robot.”
Miquela is a CGI — or computer generated image — created by a Los Angeles-based startup called Brud. The company specializes in artificial inteligence and robotics. According to TechCrunch, Brud is backed by venture capital firms like Sequoia Capital, BoxGroup and SV Angel. Sequoia Capital declined to comment on whether they’re connected to Brud. BoxGroup and SV Angel did not respond to a request for comment.
Miquela is a part of an emerging group of “fake” virtual influencers, including Bermuda, Blawkoand Shudu, who’s known as the world’s first “digital” supermodel. Like Miquela, Blawko is a creation of Brud. (The company is reportedly behind Bermuda, too). A fashion photographer named Cameron-James Wilson is behind Shudu, who has over 120,000 followers.
Like human social influencers, these CGI accounts often promote brands and products. But it’s unclear if any posts have been paid for by sponsors. Brud declined multiple requests for comment on this story.
In at least one case, Brud is profiting. Lifestyle news site Highsnobiety collaborated with Miquela on an $80 patterned shirt. According to a spokesperson for the brand, Miquela’s team receives a cut of the profits if the item is purchased from her online store, but not on the Highsnobiety site.
The concept of advertising via CGI influencers raises questions: How can they promote products they can’t try? Should companies and brands be transparent about creating or using virtual influencers?
“There’s room for consumers to be confused — and this should be [remedied],” said Olivier Toubia, a marketing professor at Columbia Business School.
Toubia says CGI influencers should have a “transparent relationship” with their followers about sponsorship deals, and it should be clear “who is real and who is not real.”
Jennifer Grygiel, a social media professor at Syracuse University’s Newhouse School, agrees.
“It’s not obvious [she’s a CGI], and it’s not obvious on the post level,” said Grygiel, calling this concept “deeply problematic.”
“When I was growing up, at least we knew Barbie was a doll,” she said. “For over two years now, there could be people, teenagers especially, who thought [Miquela] maybe was a person,” she said. “We need the brands to disclose. We also need these companies to help so they’re not facilitating and participating in this mass deception.”
But some advocates argue that being completely transparent about a CGI influencer’s identity isn’t necessary, that it’s obvious these aren’t real people and that actual humans edit themselves with Photoshop, too.
“How much do you see on Instagram that is authentic?” said Yoon Ahn, co-designer of the Ambush brand, which has worked with Miquela on an unpaid post. “How many Instagram models got surgically enhanced [and] are selling things? It’s the same thing, isn’t it? It’s not real.”
“Those products didn’t make that kind of hair. Those products didn’t make those kind of lips,” she added.
Ryan Detert, CEO of Influential, an AI-enabled influencer marketing platform, views it as an authenticity issue, rather than an ethics one.
“Mannequins have been around for the last 100 years, and those are things in the store to sell beauty and to sell an ideal. So I think it’s not much different than that,” he said.
Why CGIs are attractive to brands
So what’s in it for brands? Virtual influencers can be particularly appealing to companies, according to Influential’s Detert. It can be less risky than partnering with a person because there is more control over the image.
“Assuming the design team can design quickly enough, they will always be able to post the right thing at the right time with the right angle that the brand wants,” he said.
There won’t be issues in a CGI’s past that could get the brand in trouble, such as criminal history or use of profanity, Detert added. It’s also a way for companies to show they’re creative and on the cutting edge of technology.
Tyler Haney, CEO of Outdoor Voices, said her company likes to be “experimental” when speaking to an audience about the brand. Miquela posted photos of herself wearing an athletic dress by Outdoor Voices as part of a recent campaign.
Haney began following Miquela on Instagram and originally didn’t know she was a CGI. She was later connected to Brud through an investor. Haney wanted to partner with her even though she learned she wasn’t human.
“We’re constantly thinking about ways we can use tech to create a more interesting, engaged customer experience,” Haney said. “I enjoy finding cool and interesting ways to bring product to life.”
Other brands, such as Barneys, don’t seem to mind Miquela isn’t real, either. Marissa Rosenblum, VP of content at Barneys New York, told CNNMoney the company was interested in reaching Miquela’s audience of Gen Zers and didn’t partner with her solely because she’s a CGI.
Experts believe we’ll see more of these CGIs in the future.
“More and more, people might start blurring the line between AI and human,” Detert said.
Brand interest and guidelines
Through social media stars, brands can reach specific, niche audiences in a more authentic way compared to traditional advertising.
“One of the big benefits is trust,” Columbia’s Toubia said. “People tend to trust recommendations from people more than they trust brands or advertising or commercials.”
The Federal Trade Commission has guidelines for human social influencers endorsing products. But these rules should apply to CGIs too, the agency told CNNMoney.
“The FTC doesn’t have specific guidance on CGI influencers, but advertisers using CGI influencer posts should ensure that the posts are clearly identifiable as advertising,” said an FTC spokesperson.
This means social media posts should have a disclosure, such as “#ad” or “#sponsored” if the company is paying you to promote something. The FTC also advises influencers to make disclosures if they receive items for free.
Brands can be subject to fines if guidelines aren’t followed.
Issues of transparency
For early creators, such as photographer Cameron-James Wilson, not being upfront about the CGI influencer’s true identity was part of the mystery, and contributed to the hype and intrigue.
His creation Shudu appeared so lifelike that Semhal Nasreddin — the creator of clothing line SOULSKY — thought Shudu was a promising up-and-coming model from Africa. Last year, Nasreddin reached out to Shudu and sent her a free shirt to promote.
It wasn’t until a few months ago that Wilson admitted to Nasreddin that Shudu wasn’t real.
“I thought she was a real emerging person with incredible potential,” Nasreddin said. “As you can imagine, it was a surprise to me [when I found out]. She just looked so real, which is a credit to how good his artwork is … and a tribute to how far the technology has come.”
But Nasreddin, whose background is Ethiopian and Eritrean, said she didn’t feel deceived by Wilson.
“I feel like he represented her image in a dignified way,” she said. “There was nothing exploitative about it, or demeaning, or anything negative behind it.”
Wilson told CNNMoney he has not yet participated in any paid deals with Shudu. He didn’t immediately disclose she wasn’t real because he wanted to see if people would think she’s human. Now, Shudu’s Instagram profile page says “Shudu Gram World’s First Digital Supermodel.”
“When you’re doing 3D, for people to be convinced that what you’re doing is real, is a major thing,” said Wilson, calling her a form of art.
But when asked whether or not Wilson would hide a CGI’s identity from followers again, he said: “Absolutely not.”
— CNNMoney’s Lisa Fischer contributed reporting.
Originally Reported at : https://money.cnn.com/2018/06/25/technology/lil-miquela-social-media-influencer-cgi/index.html?iid=EL
All brands are shifting over to Audience Insight’s main platform
Facebook’s Audience Insight scrubs everything from demographics to income data.
Facebook has long held a tight grip on what data advertisers can and cannot access. Now, it’s pulling some of the reins away from social media vendors as it shutters its Audience Insight API.
This week, Facebook quietly shut down its research tool, which allowed social vendors including Spredfast to build billion-dollar businesses by tapping into the social network’s firehose of data and crunch vast amounts of user information for marketers.
Audience Insights digs up aggregated demographic, interest and lifestyle data, including age, education levels, job titles, hobbies, family size, income and location. Importantly, Audience Insights is not part of Facebook’s significantly bigger Marketing API that hundreds of ad-tech companies like Adobe and Hootsuite use to manage budgets, create audience profiles and run campaigns. Now that the API is closing, the social vendors—and all companies—are being transferred over to another version of the Audience Insights program, where Facebook supplies its data directly to marketers instead of going through a middleman.
In a statement, Facebook said: “We have decided to focus marketers on our more broadly available Audience Insights tool, so we are winding down the Audience Insights API by end of year. We’ll continue testing different ways to provide valuable insights to advertisers and agencies through the tool and across other destinations on Facebook.”
Can marketers trust Facebook?
However, removing middlemen from Audience Insights is causing some marketers to question the validity in unvetted metrics from Facebook; the platform is simultaneously embroiled with Congress over Russia-backed adspurchased during the 2016 presidential election, leaving marketers feeling even more uneasy about the social giant.
“Most advertisers do see value in the data that Facebook provides, but with all the recent news, it’s been a little bit more challenging to trust it as much as we used to,” said Courtney Blount, associate director at The Media Kitchen. “It goes against what they’re trying to [convey], which is [that] they are transparent and willing to share their data. I do wonder if they will go through with this knowing how much PR they’re trying to do.”
Blount also questioned Facebook’s interest in getting into areas beyond advertising, noting that it is historically “not heavy on client services—I would be interested to see if they were providing these insights on a more ongoing basis directly to agencies and brands.”
Kirk Drummond, CEO of Drumroll, said that shutting the door on Facebook’s data could be a good thing in light of its current controversies. “There’s definitely something to be said about limiting who has access to the data, because you also limit how many people have to defend somebody trying to come after that data,” he said.
Over the past 18 months or so, advertisers have increasingly demanded transparency from Facebook’s data following a string of measurement problem discoveries. According to Carolyn Everson, vp of global marketing solutions,Facebook has 24 partnerships with third-party measurement companies to vet the platform’s stats.
Facebook launched the Audience Insight API at Cannes Lions International Festival of Creativity in 2016; Mondelez and Anheuser-Busch were the first brands to test it. Since then, the API has remained in beta, and a handful of social aggregators that pull data from multiple social platforms are plugged into the API.
Agency execs said Facebook doesn’t charge for Audience Insights—yet.
During recent earnings calls, Facebook CEO Mark Zuckerberg has communicated to investors that Facebook is close to hitting a tipping point with ad load, and that it soon won’t be able to pack more ads into newsfeeds. As a result, it’s eyeing new forms of revenue through its messaging app Messenger and could turn Insight Audiences into a paid product that scrubs Facebook’s users for deep troves of data.
“My hunch is that it reflects ongoing efforts to figure out how to monetize,” said Drummond.
The Media Kitchen’s Blount added that a new revenue stream could also help Facebook make further inroads directly with brands and marketers by cutting out an agency or social vendor.
“It could be potentially turning into a new revenue stream for them to provide additional access to clients and brands,” she said.