By Mary Keane-Dawson, Group CEO of TAKUMI.
The meaning of ROI can vary depending on a brand’s campaign objectives, whether it’s driving brand awareness or generating sales and everything in between. But regardless of a brand’s ultimate goal, ensuring that the campaign provides good value for money is always crucial no matter what the activation is.
This has been brought into focus in the influencer marketing industry as the sector has continued to mature. Especially since the start of the pandemic as advertising budgets are being closely scrutinised. But despite the global lockdowns and subsequent hit to the economy, vast sums are still being invested into content creators with the industry’s predicted value set to rise to $15 billion by 2022 – almost double its value in 2019 ($8 billion). And this trend is only going to accelerate.
According to our recent whitepaper research, almost three quarters of all marketers (73%) from across a wide range of sectors are now allocating a greater proportion of their resources to influencer marketing than they were a year ago.
So, how can brands and agencies ensure they get the best return on their influencer marketing spend and how are measurement tools improving to support that?
How ROI measurement is advancing
Our research also found that almost two-thirds of marketers surveyed across the US, UK and Germany agree that influencers provide better ROI for brand marketing campaigns compared than traditional advertising channels. But while it is commonly understood that influencers hold incredible selling power, the industry has lacked a framework to demonstrate ROI and sales attribution for influencer content based on their audience’s actual spend.
Marketers have historically relied on engagement metrics at various points along the sales funnel such as reach, interactions, direct messages, saves and swipe-ups to demonstrate efficacy. However, platforms are developing new functions and third-party measurement tools are emerging to improve ROI measurement.
Instagram has recently made its ‘Shopping’ tab more prominent in its recent redesign, helping to evolve it into the leading social media channel for commerce.
Through the new tab users can connect directly to Instagram’s in-app shopping experiences, and we expect the app to integrate Facebook Pay which will allow users to make one-click purchases in the app. As a result, Instagram will not only begin to generate more revenue for brands but tracking ROI will be easier and more accurate.
Additionally, we’re is currently trialling a tool capable of leveraging proprietary financial transaction insights to demonstrate direct sales attribution from influencer activity online and potentially even in-store. This pioneering technology can provide powerful information for brands to gain unprecedented predictive insights.
And these insights may also help creators improve their content to serve different campaign objectives.
We already know that authentic and creative content results in the best performing campaigns, but understanding what types of content and brand endorsements drive the greatest sales uplift in real-time will help to optimise industry output even further.
With in-app commerce becoming an increasing focus of many influencer marketing channels including YouTube which also announced the launch of its Shopping ads just over a year ago, there is clearly a growing momentum towards better ROI and measurement within the industry.
We are rapidly reaching a future where social media data and consumer purchasing behaviour data can be integrated on influencer marketing campaigns and where brands and agencies will be able to measure their effectiveness at driving sales.