According to Mediakix, in 2018, brands have already spent around $ 1.6 billion on Instagram influencer marketing alone. But is it worth it? How big of a budget do you need? What kind of ROI should you expect?
Let’s dig deeper to find out.
First, let’s discuss what kind of return you can expect.
First, the Revenue
Celebrity Intelligence found out that for every £1 ($1.26) spent on beauty influencers, brands and marketers are getting an ROI of £8.81 ($11.38). The ROI generated by influencer marketing is 11x times higher than that of banner ads.
It Gets You Brand Awareness
For Iceland Food, a frozen food retailer, influencer-created videos have reportedly got a 55% retention rate on Facebook and 59% on YouTube.
You Can Repurpose Influencer Content
Most influencer marketing contracts will get you the rights to reuse the influencer-generated content. Many brands are already repurposing it into social media posts, ads etc.
Now let’s see what you need to invest to get these lucrative returns.
Influencer Payments by Cash
Depending on the category and their reach, influencers, especially celebrities, will expect a monetary sum for promoting your product or services.
Influencer Payments by Kind
Some influencers will accept products or event tickets to promote your brand. You can also give them a budget and allow them to opt for products of their choice up to that amount.
Commission (Affiliate Model)
In case you have opted for an affiliate model, you will pay a commission amount per sale. This will require a special tracking link to keep track of who is selling what.
Agency or the Software Costs
For a successful influencer marketing project, it helps to have a dedicated team or a tool to manage it.
Now that you understand the ROI influencer marketing can get you, all you need is a system to run your campaigns successfully. For more information, check out the graphic below.