Will we embrace performance-based influencer marketing?

Businesses still on the fence about working with social media influencers all have the same concerns. How do we know if it will work? How do we know if they will do what we want them to? And more pertinently, how can I ensure a return on investment? All are valid questions, but as the market across the region matures, it’s time to understand influencer marketing as a solid investment and vital part of your ongoing marketing, public relations and digital strategies.

Globally, influencer marketing is estimated to be a $15 billion market in 2022, but if you work with influencers without a solid structure in place, like anything else in business, it can become messy and time consuming. Relationships have to be both built and controlled just as you would with any other supplier. Understanding influencer marketing as transactional, just like any other procurement, sounds rather cold on as it’s based on human connection and the underpinning idea of influence– but considering it this way will help you make solid decisions, have analytical data to measure success and create a win-win situation between both brand and influencer.

Marketers need to track metrics, check attributions, and ensure that their influencer marketing strategies are paying off. We can find influencer ROI by using real time data that gives us a freedom to utilise the model without the fear of wasting time or money.

Historically, we have seen an overarching trend of simply ‘gifting’ products and services to influencers. The business will ideally identify relevant influencers to invite or gift and send accordingly. If no agreement is in place, or money changing hands, then the best that we can hope for is some light social media coverage, a correct tag, and an Instagram story or two. There are no guarantees of this, and as a select group of influencers are targeted constantly, we are seeing content become more lacklustre.

We’ve begun paying influencers (who must be correctly licensed) who can provide case studies of coverage, ROI and engagement.

If a business is not doing adequate research, setting objectives and deliverables correctly, then the influencer relationship can be frustrating or a waste of time and money. Influencer marketing, when done well, works. It can be the most cost-effective way to see conversions in sales, and track consumer sentiment and follower engagement across all platforms.

We have yet to see true performance based influencer marketing, or where an influencer is paid only on completion of set deliverables and targets. Popular in other territories, brands, including Adidas, are working closer than ever with their selected influencers to ensure measurable data that meets the campaign objectives.

It’s not unusual for an influencer to be paid upon the conclusion of the campaign, but this is not necessarily dependent on performance. Now that we have easy access to better analytics and tracking options, we can measure performance effectively.

A business will have KPIs, and these tools will ascertain results and compensation. Results can be garnered through different key metrics such as clicks, and we can see a basic engagement rate. Sales and conversions are an obvious metric for campaign ROI and measure a completed activity. A purchase transaction is a macro-conversion and anything like a database sign-up or other type of lead is a micro-conversion.

You can measure the total site traffic generated via unique visitors and also any earned actions, which is what happens after a user has seen your advertisement.

The measure of success is a bit different, and it would be dependent on factors such as the overall budget, campaigns running alongside or overlapping, quality of visual assets, copy and size of audience.

Performance-based influencer marketing delivers better performance measurements than traditional advertising, with payments proportional to results, but work needs to be done to layout objectives and formulate agreements.

With this model, influencers will receive higher compensation with higher results, but it is in this accountability and the no guarantee quandary that would be a sticking point in seeing more of this model utilised in the region.

Brands and businesses already working with influencers are in the right frame to start a performance-based campaign. As an industry, it’s important to work together on furthering quality over quantity, and that requires objectives be determined at the outset.

Many influencers locally have a lack of exposure to these models, and it will take time and effort for brands and the marketing and PR industry to educate influencers. As bigger brands globally adopt and roll out a performance-based influencer marketing model, other brands will adapt and adopt. Influencers themselves will recognise the potential returns, collaboration opportunities and credibility and see the benefits of upskilling their own business game.

Natasha Hatherall-Shawe, founder and CEO of TishTash Marketing and Public Relations.