I hear this so often on calls with prospects. And I admire marketers who want to drive real business results with influencer marketing or any other tactic. After all, why would we invest in marketing but for a larger return than what we put in.
Frequently, however, that statement is followed by, "My budget is $20,000."
Setting Expectations for Your Influencer Marketing Results
$20,000 Out of $240 Billion
When it comes to most marketing, it's difficult to create a campaign, complete with creative time, strategic time, art direction and media buying that gets noticed on a $20,000 budget. Can you buy AdWords on Google? For sure. Can you run ads on Facebook? Of course.
But both Google and Facebook advertising are getting more complicated (therefore more staff time and a higher learning curve) and more competitive (therefore a higher cost per click and lower conversion rate).
The other challenge with a budget that size is that $20,000 feels like a lot of money to you, but it's an infinitesimally small percentage of the $240 BILLION spent in 2019 on advertising in the United States alone. You're whispering in a monsoon.
Specific Influencer Challenges on $20,000
Now consider the fact that there are three cost components to an excellent influencer marketing program.
1) The cost of the influencers themselves. This increased over 40% in 2018 and another 52% in 2019;
2) The cost of the media to boost high performing content. With influencer organic reach down to 9%, a budget to get the best content in front of the best prospects is critical.
3) Agency fees. An agency like Carusele can save you from overpaying influencers because of inexperience. And get you the most effective strategy, but it's one component of the cost.
With $20,000 the spend gets spread thin quickly. On a budget of $200,000, the percentage of the budget going to agency fees would drop significantly, as our effort doesn't increase in direct correlation with the budget. As a result, the brand's "cost per" declines dramatically, thereby increasing the odds of a positive ROI. In other words, efficiency increases as budgets increase.
How to Consider Return On a $20,000 Budget
Before running any influencer program, get an estimate of the "cost per" at your initial testing budget as well as an estimate of what the "cost per" drops to at larger budgets.
At that point, the question for a test campaign isn't, "Did this campaign drive a positive ROI," but instead, "Would this campaign drive a positive ROI if my 'cost per' dropped to those lower levels?"
While a full discussion on ROI from influencer marketing is well beyond the scope of this blog post, this is a good way to consider the impact of a test influencer program. If you'd like to learn more about measuring influencer marketing from influencer programs, download this free guide, 25 Ways to Measure ROI from Influencer Marketing.
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