Mastering Influencer Marketing ROI: Why Agencies Struggle and How to Succeed

Aug 8, 2024

20 mins

If you’ve ever tried to calculate the ROI of the influencer marketing campaigns you’re running for clients, you’ll know it’s rarely a straightforward process. Drawing a direct line from influencer marketing campaigns to bottom-line revenue is challenging and can have significant consequences.

Brands you want to work with will be less likely to invest if they can’t justify the spend with clear, decisive metrics. If a marketing director cannot explain a campaign’s ROI to their C-suite, they may be unwilling to take the risk of authorising the spend. No ROI = no trust.

Agencies looking to scale-up influencer marketing services may struggle to justify their offering. In a relatively new service area like influencer marketing, there can be higher-than-normal scepticism around ROI. If an agency cannot determine the ROI of their activity, it becomes difficult to either sell to new clients or retain existing ones. No ROI = no growth.
Influencers can struggle to justify their fees, or fail to prove that they’re the correct choice over other influencers. Clear ROI metrics help influencers stand out and secure more work. No ROI = no point of differentiation.

To begin to make any accurate ROI calculations, you need to go through a three-stage process. First, you must have a robust way of collecting performance data. Next, you’ll need to organise and process that data. And finally, you have to be able to report on that data with ease.

But in what is a relatively immature service area, none of this is simple.

Collecting data: even gathering basic information can be difficult

As a third party, you’ll only have limited access to influencer analytics. Paid tools are available to scrape performance data, but specialist influencer marketing platforms like Sway Me Good take things a step further by also offering discovery, management, and analytics in one place - preventing the need for costly outlays on three or four separate tools that are all siloed.

Typically, agencies who don’t want to invest in tools or platforms try to create their own workaround. However, that workaround – which normally focuses on asking influencers to provide screenshots of their account analytics – involves adding even more manual processes (adding to the reasons why scaling influencer marketing is a headache for agencies) to already strained systems.

As well as being a time-consuming, manual process, screenshots also leave you susceptible to receiving potentially fraudulent analytics which could present a different audience profile. There’s simply no way to guarantee the validity and authenticity of the screenshots you receive from your influencers. (Remember: you’re trying to build risk-free influencer partnerships.) For example, we’ve seen fashion influencers with a predominantly looking-not-buying male audience falsify their audience breakdown to try to suggest their audience was actually made up mainly of female consumers a certain fashion brand was chasing.

So more than anything, everyone involved in influencer marketing needs a reliable ROI methodology that brings together the right metrics in a way that makes sense for brands. In short, it’s about building a comprehensive measurement framework.

The only way to achieve that is to have a single point of truth that isn’t open to manipulation, which is where a purpose-built platform like Sway Me Good can come into its own. It links directly to your influencer’s social media accounts to collect and consolidate critical performance metrics, rather than having them siloed in each individual influencer’s social media account.

On a typical campaign, you might have worked with 20, 50, or 100 different influencers. Without an influencer marketing platform, you’d be faced with manually reaching out to each individual influencer, requesting a screenshot, and then inputting data from any received screenshots while simply crossing your fingers that the data was accurate.

Organising and processing data: an exhaustive process

As any influencer marketing campaign reaches its end, you’re then tasked with collating all the different data and pulling it together into something coherent.

Typically, you might look to organise that data in a way that enables them to see key metrics, such as which influencers performed best, at a granular level. But if you’re operating without a specialist platform, this involves manual data entry into an old fashioned spreadsheet followed by extensive data manipulation to put it into a format that’s easily understood.

There’s also a need to bring influencer marketing analytics in line with the expectations of other marketing channels. If you’re used to speaking to your clients about CPM when it comes to digital marketing, that client is going to have an expectation that you can provide CPM data about influencer marketing, too. It’s not unreasonable for them to ask how influencer marketing compares to their other channels on a pound-for-pound basis.

Sway Me Good enables you to screenshot all relevant data points in a format that’s easily understood and easy to present to clients.

Reporting data: the key to agency growth

Without detailed reporting, you’re relying on blind faith and good luck to convince your clients to continue to invest in influencer marketing.

The first challenge, after you’ve assembled all the data in the previous step, is to report it in such a way that makes sense to your client. If you’re reporting results to a brand’s senior management, you also need to be fluent in the business metrics the management will typically use.

For e–commerce clients, it’s relatively straightforward to access business metrics like sales, subscriptions, and revenue thanks to the use of affiliate links, which can make a major difference when it comes to attribution.

Affiliate links provide a direct line in the data, but there are limitations: affiliate marketing is more suited to well-known brands and brands who don’t require as much social proof. Attribution typically only tracks the last touch point, so it might not provide a fully accurate picture of which influencers sparked the interest and which influencers were seen purely as the final part of an overall consumer journey.

While it’s more difficult for in-store brands to make use of affiliate marketing, Sway Me Good’s product-by-product influencer marketing structure enables your clients to run campaigns on a select few products, and then measure the difference in in-store and online sales performance.

Leading influencer marketing platforms can provide a range of detailed performance insights.

For each individual influencer, they can reveal total likes and total comments for each piece of paid-for content, as well as likes per day, estimated post reach, estimated CPM, and a defined engagement rate. This is incredibly helpful if you’re trying to decide which influencers to use in future campaigns.

On a wider campaign level, they can bring together each individual influencer’s metrics to provide a collated, overall assessment of a campaign’s success. Details available include total comments, total likes, average cost per creator, CPM, total number of items shipped, job acceptance rate, and total reach.

This detail is hugely advantageous. If, for example, you’re arguing for more budget and can directly show that the CPM of influencer marketing is stronger than YouTube, or whatever other channel you’re comparing it against, then you’re much more likely to succeed.

If your agency hasn’t yet invested in an influencer marketing platform, you could try using the influencer marketing ROI calculator, monitoring brand sentiment, or subscribing to attribution tools that can measure multi-touch journeys.

Harness influencer marketing ROI to grow at speed

If you’re looking to scale influencer marketing in your agency, generating an accurate ROI is the only true way to justify client budgets and warrant further growth/spend.

Finding a reliable ROI methodology unlocks accelerated agency growth and provides you with a significant competitive advantage over other agencies who simply aren’t as sophisticated in their data collection and reporting.

Interested in learning more about how agencies use Sway Me Good to secure meaningful, accurate, and insightful ROI reporting? Get in touch today!