Today, brands are keenly capitalising on influencer marketing, which has become a game changer in acquiring customers by tapping into the relationship shared between influencers and their set of loyal followers. The ability of influencers to convince people and develop trust for products or services is a major reason behind its popularity.
Influencer marketing, as an industry, is growing significantly and brands have been using influencers as the main component of their marketing strategy, experiencing continuous growth over the past few years. However, calibrating the performance of a campaign before getting into a deal is not as simple as it looks. At times, it becomes tricky to decode the success of this emerging marketing strategy.
There are various challenges in measuring the effectiveness of an influencer marketing campaign. Brands find themselves in the middle of a never-ending tussle of estimating the campaign cost, owing to the variable payment rates of each individual influencer. Adding to the problem is the task of deciphering the cost effectiveness of a campaign on different social media channels. To find out the definite output, brands resort to return on investment calculation.
The right set of influencers for a campaign can be identified with the aid of three parameters—index score, brand impact and business impact.
The calculation of index score is based on the current follower base and monthly engagement where 40% weightage is given to the follower base against the category reach and 60% importance is given to weighted engagement on category engagement which is the total of engagement rate. The index score is essential to know the actual worth of the influencer.
There are instances where an influencer enjoying a follower base of 4,00,000 or 5,00,000 is not able to secure a single collaboration in a month. On the other hand, influencers with 17,000 to 25,000 followers successfully sign a generous number of collaborations a month. This is because even though influencers’ follower base projects a promising number, there is no monthly engagement on their account. To evade this confusion, index score takes into account three factors—the total number of followers till date, frequency of activity and engagement that pays attention to the presence of influencers on social media.
In terms of brand impact, it is discerned with the help of qualitative and quantitative factors. While the qualitative factors consider whether the language, tonality and personality of the influencer match the requirement of the brand, the quantitative factors depend on the cost per engagement (CPE) and cost per view (CPV) on the posts of the influencer.
Calibrating CPV is the easiest, and the most likely, factor to be considered by brands. They evaluate the set of followers of influencers and analyse whether the video to be made will be able to generate that many views. CPE is another factor where high engagement sets the stage for collaboration with an influencer. It depends on the influencer’s regular interaction with the audience and considers how the audience is engaging with the stories of the influencer. Those with high CPV and CPE are likely to give the brand a good return on money.
Under business impact, the brand estimates whether the endorsement will be able to drive sales. If sales are not generated but the influencer can increase the follower base of a brand, they are considered for a collaboration.
Apart from these methods, companies employ various tools like Qoruz, HypeAuditor, Phlanx, One Impression, etc. as well to simplify the task of calculating the engagement rate of the influencer.
The author is co-founder and CEO of Grapes