According to a study by Mediakix, brands have spent around $1.6 billion on Instagram influencer marketing so far in 2018. In fact, the global spend on influencer marketing is likely to reach $10 billion annually by 2020.
This begs the questions: What kind of results can influencer marketing deliver? And are such investments even worth it?
What Kind of ROI Can You Expect From Influencer Marketing?
Let’s take a look at what kind of results you might expect from influencer marketing.
Brand Awareness
Apart from helping you increase your revenue, influencer marketing can help to increase your brand awareness. When influencers endorse your brand, you’ll gain greater visibility which can translate into more followers and engagement.
Sentiment
Influencer marketing can help you build credibility and win the trust of your target audience. Content from popular influencers that showcase your brand in a positive light can improve brand sentiment too.
Iceland, a frozen food brand, saw an increase in their approval ratings, which went up from 10% to 80% when they leveraged vlogger-generated content.
Sales
Of course, your ultimate objective from any marketing campaign is to generate more sales. And influencer marketing can help you achieve just that.
The added benefit you get with influencer marketing is that your messages are seen by the people who are more likely to buy from you. So, any leads generated are more relevant which can result in greater conversions.
What Kind of Investments Do You Need For Influencer Marketing Success?
Now, let’s take a look at what it takes to generate such returns from influencer marketing.
Compensation for Influencers
Most influencers work for monetary compensation. The exact amount depends on their reach and the number of posts they need to deliver.
However, some of them might agree to work with you in exchange for free products or services as well. The compensation would depend on how well you are able to negotiate with them. But make sure that you offer something that your influencers value.
Commission for Affiliate Sales
Many brands choose to work with influencers as affiliates too. They share a unique link or coupon code with their influencers and ask them to share it along with their content.
If anyone makes a purchase using their link, brands give them a percentage of the sale value as commission. This also helps to keep track of how well their content performs.
Your Time
Influencer marketing requires you to invest quite a bit of your time. You need to spend time to research influencers and shortlist the ones you find worthwhile, reach out to them, negotiate their compensation, share your objectives, and track campaign progress.
You also need to work hard to build long-term relationships with them. So, be prepared to invest a considerable amount of time on influencer marketing.
Platform or Agency Cost
If you want to reduce the manual work and save your time, you can leverage influencer marketing platforms or hire the services of an agency.
Influencer marketing platforms like Grin can help you run and manage influencer marketing campaigns at scale. It can help you find the right influencers to work with, contact them, send them products or payment, track campaign progress, and calculate your ROI.
You’ll also like to read: Beginner’s Guide to Influencer Marketing Strategies
Author Bio: Brandon Brown is the CEO of Grin, an influencer marketing software solution for brands.
Grin’s software helps customers identify, recruit & activate the world’s most engaging influencers. Prior to Grin, he led marketing for the #1 energy drink market in the world, Los Angeles & Orange County, at Red Bull North America.
Twitter: https://x.com/GrowWithGrin