A lot of the ways to improve your influencer marketing ROI comes down to how well you manage your budget. You should always be asking yourself:
- Which influencers, content types and platforms performed best?
- And, which influencers, content types, and platforms had the best spend efficiency?
The good news? Asking the right questions can put you on the right path. Below, we’ll walk you through some of the metrics (spoiler: we’ll be talking about spend efficiency) and math that can help you properly budget for your influencer program and improve your influencer marketing ROI.
Alternatively, if you’re short on time you can simply copy and fill in this influencer program budget template!
Influencer Marketing ROI: Getting the Most Out of Your Influencer Program Budget
What is spend efficiency and how can it help?
Influencer program metrics like reach, impressions, engagements, and video views are undoubtedly what marketers should be tracking, but these metrics don’t clue you into your influencer marketing ROI.
So what’s the not-so-secret power tools for budgeting and improving ROI? Spend efficiency!
Spend efficiency provides a way for you to evaluate performance metrics that are relative to your budget. It can help you measure the overall effectiveness of your influencer marketing spend, distinguish weaknesses and strengths in areas of your influencer program, and indicate ways to optimize your influencer marketing ROI. Spend efficiency metrics include:
- Cost per Post (CPC) = total cost of contract / # of static posts
- Cost per Video Post (CPVID) = total cost of contract / # of video views
- Cost per Video View (CPV) = cost of video / # of video views
- Cost per Engagement (CPE) = cost of post / # of engagements
- Cost per Click (CPC) = cost of post / # of clicks
- Cost per VIT (CPVIT) = cost of post / # of VIT points
By tracking and analyzing spend efficiency you’ll understand the cost behind an impression, engagement, or video view and better allocate the appropriate budget and influencer compensation to ultimately drive greater influencer marketing ROI.
Tip: If you want to dig deeper, check out these spend efficiency metrics and techniques to evaluate your influencer marketing ROI.
The spend efficiency formula that will improve your budget and influencer marketing ROI
Not only does spend efficiency provide a way to audit past campaigns, but it can also be a driving factor when it comes to budgeting and planning for future campaigns in your influencer program. You can conduct a brief cost forecast using spend efficiency metrics and techniques with historical data on influencer fees (average costs per post for different influencer tiers, social platforms, and content type).
Use this formula to get an estimated cost of your campaign:
Your total cost per tier = Avg. Cost *Quantity* Deliverables + (rights usage, agency fees, etc.)
If you’re looking for a quick and easy way to get an estimated cost, plug all of your information into this template that’s equipped with pre-filled formulas.
Also, if your brand is boosting influencer content, don’t forget to factor that in! An influencer may seem like one of your strongest partners, but you could be missing a valuable piece of information – the cost of boosting their content. For example, an influencer partnership may cost $20K per post, but after boosting the total investment could double or triple. Always be sure to factor in CPV using total investment (initial CPV and boosted CPV). Having all the information about your investments is integral in getting accurate spend efficiency metrics and making fully informed decisions about influencer ROI marketing optimization.
To get the full skinny on spend efficiency and how it relates to influencer marketing ROI, check out our recent guide (which even includes some real life examples). If you don’t have time to read that now, here’s a quick checklist for optimizing spend efficiency and influencer marketing ROI:
- Match your KPIs toyour business/campaign objectives
- Audit your influencer program with spend efficiency benchmarks
- Optimize your influencer program with your best-performing, most efficient partners
- Track the progress of your influencer program to ensure improvement
- Set goals, but don’t be afraid to experiment and learn!