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Influencer marketing has become a booming industry, with companies worldwide investing billions of dollars in partnerships with influencers. But the question remains: does this investment actually pay off? To answer this, a study analyzed over 5,800 influencer posts and identified seven key variables that determine the effectiveness of a campaign. These variables include the characteristics of the influencer and their individual posts. By optimizing these variables, the average brand can increase their return on investment (ROI) by 16.6%, suggesting that many companies are not maximizing the value of their influencer campaigns. By following these research-backed guidelines, brands can make informed decisions and ensure their marketing dollars are allocated to partnerships and content that yield the highest returns.
The Growing Influence of Influencer Marketing
In 2022, the influencer industry reached a staggering $16.4 billion. More than 75% of brands now have a dedicated budget for influencer marketing. Prominent brands like Coca Cola and Dior have successfully utilized influencer marketing campaigns to promote their products. Despite its popularity, many brands still question the effectiveness of influencer marketing and whether it is worth the investment.
To address these concerns, an international influencer marketing agency partnered with researchers to analyze over 5,800 influencer marketing posts on the Chinese social media platform Weibo. This platform was chosen due to China’s sophisticated influencer marketing industry, but the findings can be applied to many other global markets. The dataset included posts from 2,412 influencers representing 861 brands across 29 product categories. The cost of these influencer posts ranged from $200 to nearly $100,000 each. The study revealed that a 1% increase in influencer marketing spend resulted in a 0.46% increase in engagement, indicating a positive ROI.
However, the study also uncovered that many companies are not maximizing the potential value of their influencer campaigns. On average, brands could have achieved a 16.6% increase in engagement by optimizing their influencer marketing budgets. The study identified seven key variables that significantly impact influencer marketing ROI:
- Number of Followers
- Posting Frequency
- Follower-Brand Fit
- Influencer Originality
- Post Positivity
- Inclusion of Brand Links
- Announcement of New Products
Let’s delve into each of these variables and explore how brands can optimize their influencer campaigns to increase engagement and maximize ROI.
Optimizing the Seven Key Variables
1. Number of Followers
It comes as no surprise that the number of followers an influencer has directly impacts the success of a partnership. Influencers with larger followings not only have a broader reach but are also perceived as more popular and credible. As a result, their posts generate higher engagement rates compared to partnering with less popular influencers. The study found that posts from influencers with follower bases one standard deviation larger than average achieved a 9.2% increase in ROI. Therefore, brands should prioritize partnering with influencers who have a substantial number of followers to maximize the impact of their campaigns.
2. Posting Frequency
The frequency at which an influencer posts also plays a crucial role in campaign effectiveness. The study revealed a Goldilocks effect, indicating that both infrequent and excessive posting can negatively impact engagement. Infrequent posting may make influencers appear out-of-date and fail to build intimacy and trust with their followers. On the other hand, excessive posting can overwhelm followers and lead to disinterest or annoyance. The study found that the highest ROI was achieved by partnering with influencers who posted with a medium level of frequency, around five posts per week. Many brands in the study worked with influencers who posted too infrequently, suggesting that selecting influencers with the optimal posting frequency could increase ROI by 53.8%.
3. Follower-Brand Fit
The alignment between an influencer’s followers’ interests and a brand’s domain, known as follower-brand fit, is another critical variable in influencer marketing. High follower-brand fit occurs when an influencer’s followers have a strong interest in the sponsor brand’s domain. However, excessive fit can result in saturation and loss of interest among followers. The study found that partnering with influencers whose followers had some, but not excessive, brand fit led to the best results. The optimal level of follower-brand fit occurred when around 9% of an influencer’s followers had interests that matched the sponsor brand. Deviating from this optimal level decreased ROI by 7.9%. Most brands in the study already engaged in near-optimal partnerships, indicating an intuitive understanding of the benefits of medium follower-brand fit.
4. Influencer Originality
The originality of an influencer’s content significantly impacts engagement rates. Influencers who predominantly share their own original content stand out, attract more attention, and appear more knowledgeable and authentic to their followers. The study found that partnering with influencers who posted a higher proportion of original content led to higher engagement rates. Posts from influencers with originality rates one standard deviation higher than average achieved a 15.5% increase in ROI. Brands should prioritize influencers who create and share their own unique content to maximize engagement.
5. Post Positivity
Finding the right tone in influencer marketing campaigns is crucial. While positivity is desirable, excessive positivity can backfire and come across as disingenuous. Highly positive posts tend to generate more engagement as they convey a stronger endorsement. However, if the positivity seems exaggerated, consumers may react negatively. The study provided examples of posts that varied in tone, demonstrating the impact of positivity on engagement. Brands should aim for a medium-positive tone that resonates with their target audience. The study found that reducing the positivity of posts slightly could increase ROI by an average of 1.9%.
6. Inclusion of Brand Links
Posts that include links to a brand’s social media accounts or external webpages perform significantly better than those without links. These links provide additional information to consumers, increasing their likelihood of engagement. The study revealed that posts with links to a brand’s website or social media achieved an 11.4% higher ROI. Brands should encourage influencers to include relevant links in their posts to enhance the effectiveness of their campaigns.
7. Announcement of New Products
Contrary to common assumptions, the study found that influencer posts announcing new product launches had lower ROI compared to other types of posts. Consumers may perceive posts about new products as promotional and less authentic. Brands should consider this when planning influencer campaigns and avoid focusing solely on new product launches. The study found that influencer posts not related to new product launches achieved a 30.5% higher ROI. This suggests that brands should diversify their content and focus on promoting existing products or other aspects of their brand.
Conclusion
In summary, influencer marketing on social media can be highly effective when brands optimize key variables that drive engagement. By partnering with influencers who have a substantial number of followers, post with the optimal frequency, have a medium level of follower-brand fit, share original content, strike a medium-positive tone, include relevant links, and focus on more than just new product launches, brands can increase their ROI significantly. The study’s findings provide research-backed guidelines for brands to ensure their influencer marketing campaigns yield the highest possible returns on their investment. With these insights in mind, brands can make informed decisions and allocate their marketing dollars strategically in the ever-growing influencer marketing industry.
