Why and how you should measure influencer marketing based on performance
Influence, noun
‘The capacity to have an effect on the character, development, or behaviour of someone or something, or the effect itself.’
By its very definition, influencer marketing is the art of cause and effect. In the case of advertising, it’s the leveraging of a creator that drives a trackable and measurable action from their audience.
That said, there are cases when creators can be used as a pure media channel in order to obtain large scale reach. By all accounts they do offer this for brands. But if this is your primary belief of how you should work with creators, then you’re missing out on some incredibly impactful business-driving ROI.
This has been a major issue with influencer marketing to date. For many, creators have offered a new brand building channel with success measured around vanity metrics. Performance marketing has sat, both literally and figuratively, in a different room. Influencer marketing is the middle ground. A channel by which one can create brand awareness, but more importantly drive effective business ROI.
So what is performance marketing?
Performance Marketing is a comprehensive term that refers to online marketing and advertising programs in which advertisers (a.k.a., “retailers” or “merchants”) pay marketing companies (a.k.a, “affiliates” or “publishers”) when a specific action is completed; such as a sale, lead or click.
If you were to combine this with influencer marketing it would mean two things;
- There is more focus on KPIs & ROI that prove actual influence and partnership success.
- It offers a chance for brands to have more control over their money, whilst giving creators an incentive to earn more money via a performance related revenue share.
The first of the two points is incredibly important. Those industries that already focus on performance marketing with influencers can afford to spend up to 4x that of others. Many of my clients who work in this way are consistently increasing their spend month on month. This is because they are tracking, analysing and optimising on tangible results where they can see everything from lead generation to revenue uplifts, both attributable and non-attributable.
Performance marketing also encourages you to dig deeper into the data you collect. This process does not only allow understanding of the immediate campaign, but can also uncovers insight around UX and audience behaviour. This all contributes towards a greater ROI.
As noted above, performance driven influencer marketing enables brands to clearly understand what they should be tracking at different points within their marketing funnel. The added bonus is the ability to focus on a single success metric and utilise additional guiding metrics to optimise accordingly.
This is by no means a new way of thinking. Applying this model across all of your campaign outputs gives you a structure that ensures there is equal comparison. When you have clarity in what your success KPI is and a way of measuring both attributed and non-attributed data for all channels, you can optimise your entire budget.
The second of the points made is that a performance marketing approach can be incredibly beneficial for your budget. As with traditional models of performance marketing, affiliates are paid based on the delivery of specific action. Translating this mindset to influencer marketing opens up new avenues of driving success.
A performance approach means you can pay your creators based on the actual ROI they drive.
For example:
- A creator could be offered either £5,000 as a flat fee; or
- A creator is offered £1,500 upfront and then 20% of all the sales they actually drive with no limits* to what they could earn. (*Alternatively you could cap their earnings but remember it has to feel like a better & achievable offer for them to take it).
The key thing here is that performance marketing not only provides you with clarity in what you have gained from your campaign, but also a new payment solution that benefits all involved.
A success fee model removes the frustration of ‘creator package deals’ that provide no indication with what you’ll gain from the partnership. What it does however, is motivate the creator to work harder given the ability to earn higher rewards.
A performance marketing based approach is quite simply the best way of executing and measuring influencer partnerships. It creates clarity in what is working and the ability to optimise on demand, whilst also incentivising creators to work harder.
Not sure where to start? For a free cheatsheet of the key performance marketing metrics you should be tracking, click here.
