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Opinion

Influencer Marketing Has an ROI Problem… and it’s Holding Us Back

The big question every CMO asks when planning a new campaign is “what will my return on investment be?” This is a completely fair question. Whether you are at an agency or in-house, marketing is a commercial operation and we need to be clear on how our activity impacts the business’s performance and ultimately the bottom line.

So, why is it that we have such a problem reporting ROI when it comes to our influencer marketing activity?

For anyone who ever had any doubts, influencer marketing is here to stay. 71% of companies currently use influencer marketing, or have used it in the past. And, this number is only going to get bigger. A recent survey from Cure Media found that a majority of companies are planning to increase their spending on influencer marketing considerably over the next few years. 

The pandemic has highlighted just how effective influencers can be at creating authentic content in challenging, often prohibitive, circumstances. Audiences have responded to this in kind, with many finding the stripped back, low-fi style of content relatable during successive lockdowns. It is this ability to build trust with their audiences that makes influencers so valuable to brands. 

It’s time to address the challenges

However, there are significant challenges that we need to address in order to make influencer marketing as important to the marketing mix as the other channels we find ourselves competing against. This starts with how we assess the performance of influencer marketing on our businesses. 

Influencer marketing is the channel that most CMOs still struggle to generate meaningful insights from. Just 30% of marketers say they can accurately collect ROI data from their influencer campaigns. This is far behind websites (55%) and social media marketing (54%). Not being able to accurately state the value of our work is a big problem that continues to mean influencer marketing is seen as an activation as opposed to a strategy. 

A key part of the problem many CMOs face when trying to collect ROI data from their influencer activity is that the industry currently takes a very short term view – we’ve all seen those influencer campaigns that last as little as a couple of weeks. What’s more, this view is embedded and 55% of brands expect their influencer partnerships to last less than six months.

When running any form of marketing activity for less than three months, it can be incredibly hard to assess how this has impacted your business’s bottom line. As such, our fundamental approach to influencer marketing needs to change if we are going to be able to generate the results that CMOs expect to see.   

The strength of influencer marketing

As we’ve already touched on, the strength of influencer marketing is the ability to create brand ambassadors out of people that your target audience relates to, relies on, and ultimately trusts. This relationship forms the foundation upon which we can articulate our brand message and stand out from the crowd. Like any other relationship in life, building this type of trust takes time, and therefore you need to work with influencers over the long term, not only a few weeks or months. A short relationship will mean that any effect from the activity will be very short-term as well.

As well as just taking time to generate actionable insights, it is also extremely important to take the time to find the best influencer marketing recipe for your brand. This is in terms of which influencers you should collaborate with, which channels you should be at and which content types and messaging you should focus on. 

To find what’s working for you, you need to test, evaluate and optimise month by month until you find what’s working the best. Again, this is just like any other marketing channel – paid social media campaigns rarely only run for one month and then stop. Instead, we should experiment with ad copy, content, bidding strategies etc. until we establish what works. This approach needs to also be applied to influencer marketing, which is currently not not usually the case.

Influencer marketing is facing a period of intense growth. But, to finally be considered a strategy worthy of boardroom conversation, we need to be speaking the language of CMOs – namely data and insights. With all of the tools available to us, this is something that brands big or small can achieve. The answer is just treating our influencer marketing like we do our other channels, with a long term approach.

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