How much ROI can a company get through influencer marketing?
The energy shot brand ran the influencer campaign before, during, and after country music singer Dierks Bentley’s 2018 Mountain High Tour. It recruited the artificial intelligence and marketing practice Influential, which used the AI technology IBM Watson to select the most appropriate influencers.
The AI tapped three influencers on Instagram, all with tens of thousands of followers—Kelsey Lowrance a Dallas Cowboy Cheerleader; Courtney Steeves a recent college graduate with a blog on travel and style; and Marza Wilks, a twenty-four-year-old Peruvian-born cellist studying at Juilliard.
IRI and Influential collaborated to analyze the results. They found that the campaign generated $1.2 million in sales with 22.9 million campaign views, and had a $6.11 ‘short-term; return on ad spend, which is six times the average social media food campaign.
How did they get to these numbers? “We used our POS (point of sales) data to measure the campaign with our Matched Market Methodology,” Mariana Torres-Lastra, a consultant at IRI’s Media Center of Excellence told us.
IRI analyzed sales at convenience and multi-outlet stores. “When we run the sales lift results, due to our weekly POS data, we can determine the amount of dollar sales the brand sold during the campaign period nationally. We remove the dollar sales coming from the 3 control markets sales since the campaign was not exposed on these ones,” Torres-Lastra added.
As for the six-fold return on investment compared to the average food brand campaign on social media, IRI calculated it by dividing the incremental dollar sales the campaign provided by the total cost of the campaign.
According to the company, the results proved “the power of using social media influencers in consumer packaged goods marketing.”
The rise of influencer marketing
Social media advertising budgets have increased dramatically overtime, although the latest results from the CMO Survey, which collects and disseminates the opinions of top marketers, found social media ad spending falling for the first time in the two previous surveys.
“One reason may be that despite massive financial investments, social media is rated as contributing only moderate value to company performance,” according to the latest report, which was published in February 2019.
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Despite this, social media spending is expected to continue to rise by 73% over five years.
Influencer marketing is a major part of social media marketing. Adweek estimated the segment to be worth $2 billion in 2017 and estimated it to hit $10 billion by 2020.
It’s not just about follower number anymore
Out of around 1 billion active Instagram users in 2018, 2.8% have 50,000 to 100,000 followers (these users are known as ‘micro-influencers, according to Mention.com, and these are the Instagram users that brands will tap to promote products and services).
IRI argued that its latest analysis of 5-hour Energy’s campaign suggests that companies can get a bigger return with a smarter selection process of influencers, beyond just looking at their follower count.
“You want to capture the correct attention of your existing and lapsed buyers as well as the competitors. The selection is not only about the number of followers anymore but the connection of the influencer with the brand,” Torres-Lastra said.