The ROI of Influence(r) Marketing - Part 1

By Delphine Reynaud, Partner at Inpulsus.

Defining Influence(r) Marketing ROI is the Modern Marketing challenge.  

A key question asked at some point in every engagement at Inpulsus is: “What is the ROI of an influencer program?” or some variation like, “can we compare the ROI of our Influence activity with other marketing expenditures?”

Despite the evolution of marketing technology platforms, social networks and the heightened need for solid analytics inside companies, answering the ROI question remains elusive. And since Influence(r) Marketing is a new discipline that leverages digital and beyond, and can impact many parts of your business, the demands for clear ROI are high. 

Working with marketing clients at teams, C-levels and sometimes boards, we are getting a unique view into the challenge of understanding Modern Marketing ROI. For this, we see good momentum into a new way of thinking that measures what truly matters. 

The game has changed - complexity is everywhere.

At the start, most companies viewed digital and social media as additional “push” channels, not understanding that marketing was evolving to become less about pushing branded content than it is about engaging target audiences. A majority of marketers turned to PPC, which certainly flourished, and consequently short-term transactional forms of Influencer Marketing also grew. That way, marketers could continue to use traditional awareness metrics emanating from PR and Advertising in the form of EMV (Earned Media Value), Reach and Impressions. 

On the other hand, some companies understood that, while it would be hard to measure initially, new forms of communication were emerging in marketing - enter Influence(r) Marketing. To remain relevant within the explosion of online conversations that every brand is a part of one way or another, engaging with influencers allows brands to quickly adapt. This reality was only heightened during the seismic event of the global pandemic.

"Almost all our brands now have influencer marketing as part of their consumer decision journeys and as part of the marketing mix… Strategic Influencer Marketing happens brand by brand but Influencer Marketing is an integral part of our overall marketing today.”
Asmita Dubey, Chief Digital Marketing Officer at L’Oreal 

Digital eating up the Customer Journey

Whether in B2C or B2B, even if less so for the latter, a huge part of the customer journey has moved online, and the pandemic has only accelerated this trend.

“The buyer journey your customers take has been increasingly moving online for a while now, and the past year simply accelerated the migration. Now that digital events are truly the norm and buyers are doing even more of their research online, your CX needs to be digital-first.”
Randy Frisch, Co-Founder, CMO & President of Uberflip

Influence(r) Marketing has emerged as a new and efficient path to impact the client journey at different stages. Whether you are looking to support the launch of a new product or campaign, to impact brand sentiment and manage your reputation, to increase awareness and activate advocacy, to generate leads or help you convert or even nurture your customers, attract new talent, improve R&D… Influence(r) Marketing can be turned towards all or any of the above.

Source: StarNGage

The positive impact of Influence can extend beyond marketing as it touches both Digital Transformation and Customer Experience efforts. There aren’t many marketing disciplines or techniques that can do all of this. It becomes easy to understand why assessing the ROI of Influence(r) Marketing can be tricky, but Marketing is the perfect place to start.  

“Branded content and influencer marketing gives brands more flexibility to engage consumers throughout the purchase funnel… These resurging strategies are proving useful for any campaign goal.”
Sarah Bolton, EVP at Advertiser Perceptions

Social ecommerce evolution now provides hard ROI metrics

Since 2015, social media platforms have made considerable efforts to enable ecommerce capabilities for B2C brands and paved the way for access to hard ROI metrics like Click Through Rate, conversion rate and even sales. Under pressure from users to see less ads and influencers to generate additional income streams, social platforms started to give more power to influencers and content creators of all kinds. Enabling social commerce capabilities for influencers means they can more easily monetize their audiences, work with different brands in different ways and ultimately further their own brand. 

Even in the B2B sector, independent-minded individuals have become trusted experts with new technologies and social tools enabling them to diversify their income sources for deeper access.

These moves from social platforms towards influencers have unlocked more direct conversion metrics to emerge for influencers and brands alike - although brands are the ones paying for reach.

Fast-moving IRM technologies are helping unpack ROI

A significant component of the Influence(r) Marketing boom, IRM [Influencer Relationship Management] technologies have multiplied over the last 10 years. This dynamic landscape of tools continues to evolve, supporting efforts to leverage and create structure around the discipline - and especially to help measure ROI. Today’s leading IRM technologies provide standardized data and insights from influencer discovery throughout the whole process and can automate and track performance of IM programs as they scale over time, over markets, etc. 

In addition to expanding their product features, IRM vendors have also developed partnerships with an ever-growing number of social platforms to ensure access to an exploding universe of data - from mentions and engagements to click-throughs and affiliates and everything in between. Not only do they aggregate metrics from different platforms but they are also required to assess their values comparatively as each platform has its own formula to define an engagement or a video view for example. It’s a big commitment, but they are welcoming the opportunity to also track direct sales through the platforms’ social commerce features so they can (finally) prove direct ROI - as can the whole profession.

However, limiting Influence to its social commerce measurement would be a big mistake and bring it back to the last click attribution problem that hinders Modern Marketing ROI. And what would it mean for B2B?

“We had a problem that we were focusing on the wrong metrics, the short-term, because we have fiduciary responsibility to shareholders.”
Simon Peel, Brand Global Media Director, Adidas

A tailored measurement model is required

Like many components of marketing, the ROI of Influence(r) Marketing is somewhat difficult to measure directly, which sometimes leads to customized formulas. The reality? There is no single metric that answers this question and most companies that run sophisticated Influence(r) Marketing programs use a variety of KPIs in their measurement models.

Performance models based on the objectives and goals of the programs take into account a mix of awareness, consideration and conversion KPIs - as the ANA’s recently formalized guidelines. Consideration metrics are very much tied to social engagement and sentiment with measurement methods from advertising such as brand-lift studies emerging. However, Influence(r) Marketing can not be considered and measured in silos and it is key to monitor the impact of the practice on overall brand social media KPIs like Brand Engagement Rate and Share of Voice. Share of Voice has become a strong indicator of the impact of IM, as brands strive to better understand and encompass the whole customer journey before, during and after transaction. 

While assessing the impact of Influence(r) Marketing on the overall social media performance is easy enough, attribution gets more complex. But then, has measuring marketing impact ever been easy? It is also notable that there is more demand on ROI on digital than was ever asked of traditional marketing like advertising or PR.

The reality is that with Influence(r) Marketing as for social media marketing overall, a whole new set of soft and hard metrics is emerging. Figuring out how to evaluate their impact and integrate these in the overall marketing KPIs remains a challenge for many brands and companies. 

“Marketing operations leaders need to use data to inform decision making, yet channel-based performance reporting is limited in scope and insight.”
Joseph Enever, Marketing Data and Analytics Senior Research Director, Gartner

Leveling up to the econometric model

Indeed there are more and more marketing analytics tools, IRM and social monitoring solutions that provide strong data, which can be correlated to other marketing KPIs and included into the larger econometric models. What we often find through our work though is that econometric models, when they exist, don’t necessarily truly know how to assess social media impact on the overall marketing performance or even at times which metrics to focus on.

Media mix models are still very much linked to Reach or Impressions coming from an advertising-led marketing approach to enable channel cost efficiency comparisons. Overall engagement and Share of Voice metrics provide a much better proxy to performance than those, but so many ROI models are inherited from earlier marketing regimes that may not have engaged in social media at all.

So while IRM and social media technologies provide performance data, there is still a need for data science to deliver insights that reveal the triggers and impact on customer journeys. With so many touchpoints to take into consideration and in constant evolution, measuring the impact of Modern Marketing is an ongoing and never-ending work but critical to avoid the focus on last click attribution.

While social commerce data proves the case for the discipline, let’s be careful not to take the easy way out and focus only on selling. Brand building and the resurgent “Brand Equity” concept are key in today and tomorrow’s world to be relevant to the next generations.

So what’s next? Let’s discuss some models.

We’ll publish the next installment in this series which will look at various ROI models across our B2C and B2B clients. What KPIs were both feasibly tracked, managed and provided solid directional trend lines into determining the ROI of an Influence(r) Marketing program.

#influencemarketing #influencermarketing #marketingROI #marketingtransformation