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Entrepreneurship Section | 2
5 Vital Influencer Marketing Metrics You Should Know
By Dmitri Khasanov | Entrepreneur Magazine | Feb 21, 2024
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Influencer marketing has been characterized as the fastest-growing form of the modern generation of advertising. The Statista report of last year showed that the influencer marketing industry was worth just $1.7 billion in 2016. It hit $16.4 billion in 2022 and is expected to increase by another $5 billion this year. This exponential growth demonstrates the health of the entire industry. However, when it comes to influencer marketing, there are a series of metrics that a business needs to take into account and track on a regular basis. These essential key performance indicators help brands and companies evaluate the effectiveness of digital campaigns so that they can optimize current working approaches and business processes. The following need to be considered when evaluateding influencer marketing effectiveness.
- Return on investment (known as ROI). Essentially, ROI is calculated by dividing the revenue or profit generated from an influencer campaign by its cost. Tracking this metric provides insights into which influencers deliver the highest value for your business. If an influencer’s fees surpass the returns, it’s prudent to reconsider collaboration with them.
- Influence engagement rate (IER). IER is determined by the ratio between the number of engagements and the number of followers that influencers had at the time they posted your campaign. A higher IER indicates that your message was more engaging for their specific audience. Leverage IER to identify influencers with similar high engagement rates.
- Cost per engagement (CPE). It calculates the cost associated with likes, comments, and shares, offering insights into the impact of your investment in terms of generating active audience participation. Beyond that, CPE is a valuable tool for evaluating the effectiveness of specific collaborations, content types, or platforms.
- Cost per reach (CPR). CPR is a metric that quantifies the financial cost of reaching a single unique user within your target audience. Unlike mere impressions, CPR takes into account the actual potential touchpoints with individual consumers. This metric provides a more refined perspective on the investment required to connect with specific members of your audience, offering valuable insights into the efficiency of your marketing spending in terms of reaching and engaging your desired demographic.
- Audience growth rate. Assuming the influencer’s brand aligns with the client’s, there is a likelihood of spikes in audience growth corresponding to the influencer’s post schedules. Tracking these growth rates provides insights into the impact of influencer collaborations on expanding the client’s audience and helps measure the effectiveness of these partnerships in driving brand awareness and attracting new followers.
3 key takeaways from the article
- Influencer marketing has been characterized as the fastest-growing form of the modern generation of advertising. The Statista report of last year showed that the influencer marketing industry was worth just $1.7 billion in 2016. It hit $16.4 billion in 2022 and is expected to increase by another $5 billion this year. This exponential growth demonstrates the health of the entire industry.
- However, when it comes to influencer marketing, there are a series of metrics that a business needs to take into account and track on a regular basis. These essential key performance indicators help brands and companies evaluate the effectiveness of digital campaigns so that they can optimize current working approaches and business processes.
- The following need to be considered when evaluateding influencer marketing effectiveness: return on investment (known as ROI), influence engagement rate (IER), cost per engagement (CPE), cost per reach (CPR), and audience growth rate.
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Topics: Marketing, Technology, Influential Marketing