The marketing industry moves quickly, making it ripe for misguided fads. Influencer marketing, for instance, is all the rage now, with brands adopting the celebrity endorsement strategy for the age of social media by contracting online personalities to help extend their company’s reach.
But when reports show that 78 percent of brand marketers are worried about being able to accurately measure the return on their influencer marketing investments, you know something’s off.
The problem is, many marketers are doing influencer marketing wrong.
Most are paying their influencers up front, with no real insight into the results they’ve driven.
This is why a hybrid model of payment — what we at Acceleration Partners refer to as “Performance Plus” — is often a better option for brands who want to work with influencers but aren’t comfortable paying for something with uncertain returns.
In a Performance Plus compensation structure, an influencer might be paid a flat fee upon completion of an action plus a performance incentive (could also be a free product upfront and then a performance incentive at the end).
As with any channel, value should be measured by output, not input, and your influencer partners should be treated and compensated as you would any other performance-based partner.
Don’t Pay for Influence — Pay for Performance
Influencer marketing campaigns are great for boosting brand awareness — unless your influencers happen to lose appeal with their audience, suddenly turn on you, or have built a fake following and scammed you into believing they held a lot of sway.
How can you know for sure what kind of impact they’re having?
A new marketing strategy doesn’t mean the old rules should fly out the window. To know whether your influencer investments are truly generating ROI, you have to check their performance just as you do with campaigns in other channels.
However, many companies have flipped this process and pay influencers upfront instead of after they’ve delivered on a predetermined action such as generating a sale, a high-value lead or a new customer.
If an influencer has already developed an enormous online presence, or if you have been working with one for years and they are producing the results you want, then paying upfront is fine.
While celebrities were the original brand partners, social media has democratized the influencer space. Organic partnerships emerged through social platforms when brands started paying digital personalities for mentions in their specialized verticals.
This made sense: A beloved makeup vlogger holds more influence over her audience’s buying decisions than an actress they may not recognize.
Nonetheless, Mary Meeker’s 2017 Internet Trends report indicated that 61 percent of social media marketers find it difficult to measure ROI. Micro-influencers, in particular — those with about 10,000 to 100,000 (with some sites saying up to 250,000) followers — tend to generate reasonable returns, as they typically charge no more than $250 for an Instagram post and under $500 for a branded blog post.
Moreover, micro-influencers on Instagram see higher engagement rates, but you still need a way of measuring impact to determine their worth.
A return to a performance-based compensation structure is critical in the next phase of influencer partnerships as it allows you to identify relevant micro-influencers, track their performance, and compensate them fairly. Here are three ways to do this:
1. Get Everything And Everyone Under One Roof
Problems arise when the affiliate, influencer, partnership and PR teams are siloed from one another. Everyone working off the same information yields better data and a much clearer picture of which strategies are working.
Bringing all these teams under one umbrella also facilitates ongoing communication about each campaign’s progress.
Rolling the management and tracking of all projects with performance elements into one system also makes more sense. By incorporating traditional affiliate components, your PR, marketing, advocacy and influencer teams can access tools they need to run quality campaigns and generate substantial results.
A performance partnership framework unifies all of this.
2. Tap Into The Affiliate Model to Manage Micro-Influencers And Track Performance
Finding quality influencers can be tough. 68 percent of marketers interviewed in one study said they struggle to find relevant partners, 30 percent have trouble negotiating influencer contracts, and almost all find it incredibly difficult to track key performance indicators such as engagement, click-through rate and impressions.
Traditionally, influencer networks promoted their worth based on social media statistics. But impressions and reach don’t provide much context.
Increasingly, brands are wanting more detailed conversion metrics — even sales metrics, in some cases — from their influencer programs to see which micro-influencers are driving the most activity and which tactics are most effective.
While not yet widespread, some companies are accomplishing this by partnering with high-value micro-influencers and managing them via an affiliate-type model. For example, one of our clients partnered with stylish fitness micro-influencers who helped drive more than 27,000 engagements for the brand.
3. Know this: Last-Click Attribution Will Likely Disappoint
For the past 10 years, marketers measured performance according to where the last click before a conversion originated. That doesn’t work when you’re evaluating influencer performance because they are never the source of last clicks.
If you focus on last-click attribution, your influencers will likely be disappointed by the results — and you’ll be disappointed in their performance.
Take apparel brand Topshop, for example. The company approached sites in the fashion industry with an offer of “top up” payments in exchange for promotion. Payments were issued based on sales that could be traced back to the influencer sites’ content, even if there wasn’t a direct conversion link. Viewing the sites as vehicles for increased visibility, Topshop rewarded influencers for driving shoppers into its funnel.
The performance partnership model benefits both brands and micro-influencers by allowing room for more creative logistics but is still based on hard, measurable numbers.
When you see improved ROI and your influencers see no limit on what they can earn through the partnership, it creates virtuous cycles of success for both of you. What’s more, this method of partnering with and compensating micro-influencers can be revised, refined, and repeated in countless ways to meet your goals.
This article was originally published on cision.com