What is influencer marketing?

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Influencer marketing is a form of marketing that involves working with creators who have large followings on social media platforms like Instagram, YouTube, and TikTok. It is also a powerful strategy that allows brands to reach their target group through partnerships with these same creators. These people, known as “influencers,” have built a loyal and engaged audience that trusts their opinions and recommendations.

The goal of influencer marketing is, broadly speaking, to use the reach and influence of influencers to promote a brand’s products or services to its audience. This can be done through different types of content, including sponsored posts , product reviews, and recommendations.

Influencer marketing can be an extremely effective marketing strategy for brands for several reasons. First, unlike traditional display or cinema advertising, brands can reach a targeted and engaged audience . Influencers typically have a specific niche or demographic following, and partnering with the right influencers can help a brand reach its ideal target group.

Second, influencer marketing can help build trust and credibility for a brand . Since influencers have established a trust-based relationship with their audience, their endorsement of a product or service can carry great weight with their followers.

Finally, influencer marketing can increase revenue and brand awareness . When influencers promote a product or service, the likelihood that followers will become active and make a purchase is higher than with traditional advertising.

Overall, influencer marketing is the practice of using the reach and influence of social media personalities to promote a brand’s products or services and build trust and credibility with its audience. When done right, influencer marketing can be a powerful tool for brands looking to reach their target audience and increase their revenue (ROI).

What is the ROI of influencer marketing?
Speaking of revenue, measuring ROI from influencer marketing can be a challenge for brands. That’s why we break it down in a short ROI FAQ and explain step-by-step what ROI means in influencer marketing.

What is ROI?
ROI measures the financial return on an investment , taking into account the costs of the investment and the income generated by the investment. A positive ROI means that the investment generated more income than it cost, while a negative ROI means that the investment cost more than the income it generated.

How to measure the ROI of influencer marketing?
There are several metrics brands can use to measure the ROI of influencer marketing, including:

Cost per engagement (CPE): Cost per engagement measures the cost of generating a specific type of engagement , such as a like or comment, through an influencer's content. Brands can use CPE to compare the cost of engagement gen partners email database erated through influencer marketing to other forms of marketing, such as paid social media advertising. To calculate CPE, divide the total cost of the influencer campaign by the number of engagements generated.
Cost per Acquisition (CPA): Cost per acquisition measures the cost of acquiring a new customer as a result of an influencer marketing campaign. CPA takes into account the total cost of the influencer campaign and the number of conversions generated by the campaign. To calculate CPA, divide the total cost of the influencer campaign by the number of conversions generated.
Return on Ad Spend (ROAS): Return on ad spend measures the revenue generated by an influencer marketing campaign relative to the cost of the campaign . ROAS takes into account both the cost of the campaign and the revenue generated by the campaign. To calculate ROAS, divide the revenue generated by the campaign by the total cost of the campaign.
Lifetime Value (LTV): Lifetime value measures the total revenue a customer generates over their lifetime . Influencer marketing can help increase customer lifetime value by introducing new customers to a brand and encouraging repeat purchases. To calculate LTV, multiply the average purchase value by the average number of purchases per customer per year and the average lifetime of the customer.