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What You Need to Know About Measuring  ROI

As an influencer, you may think your job is just to take pretty photos and post them on social media. While it’s part of your job, it’s not the only thing you should be doing. You need to be learning about ROI if you really want to succeed as an influencer.

The term “ROI” is often used by businesses and brands. It stands for “return on investment” and typically means the company spent money in an attempt to make even more money.

 

If a brand spends $100 on Facebook ads and earns $300 in revenue, then the ROI is $100. For every $1 they spent, they earned an additional $2. Companies use ROI to judge which strategies made money and which ones didn’t result in any profits.

 

Sometimes, ROI may not be about immediate profits. A company or brand could hire an influencer to increase the number of followers they have on a social media channel. The marketing team knows that building an audience will result in more long-term profits by giving the company a bigger reach.

 

It’s important that you understand a brand’s goal before working with them. This will help you and the company measure the ROI of your posts.

 

Before you talk with a brand, do some research on your own about influencer marketing and ROI. Pay attention to what results brands usually see in your niche.

 

An example is that for every $1 a brand spends in the beauty industry, they can expect about $10 in return. While you can’t promise a certain amount to your client, knowing this statistic can be helpful when you’re negotiating your rates.

 

When it comes to ROI, you should also study your conversion rate. This is the number of users who took action after you made a recommendation or promoted a product. If you have 100,000+ followers and 5,000 people made a purchase, then your conversion rate would be around 5%.

 

Now, imagine a popular brand offers you a deal—they will pay you $5,000 for a sponsored post or you can get an affiliate commission of 25% of every sale.

 

Then assume 5,000 followers buy through your link for a product priced at $10. This results in $12,500 in revenue for you. You’ve made $7,000+ than you normally would.

While you don’t have to take affiliate offers like this one, don’t be quick to dismiss them. Give yourself some time to think it over and consider your conversion rate before making an agreement.

 

Another thing you’ll want to think about when it comes to ROI is how many expenses you and the brand are investing in this campaign. If the campaign requires a photo shoot, makeup artist, hairstylist, or other professional, this amount will drop down the ROI.

 

To make it easy for you and the brand you’re working with, make sure to use trackable links. Often a company will provide you with a special link that is unique to your post. With this link, the business can easily monitor how many people clicked through to their website based on your post.

 

Another tactic that can be useful for tracking ROI is conversion pixels. Conversion pixels are invisible pixels (small dots) that are placed on the brand’s website.

 

From there, a company can monitor where their traffic is coming from. They’ll be able to tell that you sent traffic to their site from your social media post even if a follower didn’t click your link but instead, Googled it or typed in directly into their address bar.

 

To increase brand awareness and boost the results of your influencing campaign, you may want to work with the business to choose a branded hashtag. One of the most popular branded hashtags was #ShareACoke. The Coca Cola Company used it to increase brand awareness and boost product sales at the same time. 

 

Branded hashtags can be useful for promotions, events, takeovers, contests, product launches and more. Remember when suggesting a branded hashtag, make sure to stop and do some research first.

 

Check the hashtag. Find out if it is already in use. Is or was the hashtag ever associated with something offensive? Could make the company look insensitive?

4 Ways to Measure Social Media ROI

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