Does Influencer Marketing Really Pay?

In 2022, the influencer industry reached $16.4 billion. More than 75% of brands have a dedicated influencer marketing budget, from Coca Cola’s #ThisOnesFor campaign in partnership with fashion and travel influencers, to Dior’s award-winning 67 Shades campaign in which the brand partnered with different influencers to promote its Forever Foundation product line. But does investing in influencers really pay?

To explore this question, we teamed up with an international influencer marketing agency to analyze more than 5,800 influencer marketing posts on China’s popular social media platform Weibo. (We focused our analysis on the Chinese market because it hosts one of the most sophisticated influencer marketing industries in the world, but our findings can likely be applied across many other global markets as well.) The posts in our dataset were written by 2,412 influencers for 861 brands across 29 product categories, at costs ranging from $200 to nearly $100,000 per item. And indeed, we found that, on average, a 1% increase in influencer marketing spend led to a 0.46% increase in engagement, suggesting that the strategy can actually yield positive ROI.

However, we also found that most companies leave considerable value on the table: The average company in our dataset could have achieved a 16.6% increase in engagement simply by optimizing how they allocated their budgets. influencer marketing. Specifically, we documented the effects of seven key variables on influencer marketing ROI:

Below, we go into more detail on how companies can optimize each of these seven elements of their influencer campaigns and achieve that potential average engagement increase of over 16%.

1.Number of followers

Unsurprisingly, we’ve found that the more followers an influencer has, the greater the impact of a partnership. An influencer with a large following not only has a greater reach, but is also seen as more popular and credible, thus generating higher engagement rates than brands would get by spending the same budget to partner with a less popular influencer. In our dataset, posts from influencers whose follower bases were one standard deviation greater than the mean had a 9.2% greater ROI.

2. Frequency of publication

When it comes to how often an influencer posts, our analysis identified a Goldilocks effect: Influencers who post infrequently aren’t seen as up-to-date sources of information. They also don’t have enough presence on follower feeds to build intimacy and trust. However, posting too frequently can clutter up follower feeds and create fatigue. Followers can become disinterested in influencers’ posts, selectively filter them, or even feel annoyed by them. As a result, the brands that achieved the highest ROI partnered with influencers who had an average level of posting activity, which is around five posts per week.

Our analysis also suggests that many marketers may not realize the importance of this effect. Many of the companies in our dataset worked with influencers who posted too infrequently, and as a result, we found that, on average, they could have increased the ROI of their influencer marketing efforts by 53.8% simply by selecting influencers who are engaged in the optimal level or publishing activity.

3. Follower brand fit

We saw a similar Goldilocks effect when it came to follower brand fit, or alignment between the interests of an influencer’s followers and a brand’s dominance. For example, follower brand fit would be high if a skincare brand worked with an influencer whose followers were interested in beauty, but low if it worked with someone whose followers were interested in cars. When an influencer’s followers are highly interested in topics related to the sponsor’s brand, their posts tend to be more aligned with their followers’ interests, thus making the posts more likely to seem personally relevant. However, this also means that these posts will be competing for followers’ attention with a lot of similar content, and followers may lose interest in the topic as a result. Thus, we found that partnering with influencers whose followers had some (but not too much) brand fit resulted in the best results.

From our analysis, the optimal level of follower-brand fit occurs when approximately 9% of an influencer’s followers have interests that match the sponsor’s brand, with a standard deviation difference from this optimal level reducing ROI by 7. 9%. Interestingly, in this regard, most of the brands in our dataset were already engaging in near-optimal partnerships, suggesting that marketers may have some insight into the benefits of the follower brand’s average fit.

4. Originality of the influencer

The last influencer trait we looked at was originality. While some influencers share a lot of content created by other people or brands, others largely post their own original content. Influencers who post a higher percentage of original content tend to stand out more, attract more attention, and appear more knowledgeable and authentic. As a result, we found that brands that partnered with these influencers typically achieved higher engagement rates for a given marketing spend. Specifically, we measured the percentage of an influencer’s previous posts that were original content, and found that posts from influencers whose originality rates were one standard deviation above the average had a 15.5% higher ROI.

5.Post positivity

One of the trickiest elements of any marketing campaign is tone. Marketers want to get a positive message across, but too much positivity can backfire, and that goes for both influencer marketing and more traditional channels. Consumers are more likely to engage with highly positive posts, because they suggest stronger endorsement. But if a post is so positive it seems fake, consumers may not react as well. For example, the following post from an Audi influencer uses a very positive tone:

The #NewAudiQ2L is priced between RMB 217,700 and RMB 279,000. It fully satisfies your travel needs with its outstanding appearance, high technology and high-efficiency power, and brings a whole new experience to young and free-spirited consumers. Click on the link to participate in the event and you could win the chance to drive an Audi Q2L for a year!

This post demonstrates the danger of excessive positivity: It cost the brand more than $4,000, yet it hasn’t been reposted a single time! Conversely, the following post from a Clinique influencer exemplifies a more effective medium-positivity tone, which had a lower price tag and yet garnered substantial engagement:

Yesterday a friend asked me what happened to my face these past two days? I was so bad! I couldn’t fight the smog of the change of season and didn’t do a good job of skin maintenance, so dullness and fine lines appeared. I have to do something to nourish my skin! This year’s new purple essence of vitamin A “micro-needle tubes” works really well. Contains pure vitamin A retinol, which can promote skin metabolism and collagen generation to fill in fine lines.

We also found that this was an area where many companies had at least some room for improvement – ​​posts in our dataset tended to be slightly more positive than optimal, to the point that reducing positivity could have helped these brands increase ROI on average or 1.9%.

6. Whether the post includes links to the brand

Consistent with previous content marketing research, we found that posts that included links to a brand’s social media account or external web pages performed significantly better. This is because these links offer consumers important additional information about the content, thus making them more likely to engage. In our dataset, posts that included links to a brand’s website or social media had an 11.4% higher ROI.

7. If the post announces a new product

It might be tempting to target influencers when promoting a new product launch, but our research suggests this can be a counterproductive approach: we found that the ROI for influencer posts announcing new products was 30.5% lower compared to equivalent posts that weren’t about new product launches. For example, this product launch post from a Dyson influencer didn’t do very well:

Congratulations Dyson! Released a number of new smart home products. Desk lamps, air purifying heaters, robot vacuum cleaners! Technology brings more convenience and better health into our lives!

whereas this post from a Kiehl’s influencer — which wasn’t about a new product launch and cost the brand less than a tenth of what Dyson paid for his post — got more engagement:

Kiehl’s Ultra Moisturizing Cream should be a lifelong recommended product. It’s the legendary best-selling moisturizer, ranked #1 for 40 years!

Of course, all of these recommendations are based on averages from our data set, and results may vary between companies. Also, our primary metric for ROI was reposts or shares. We chose this metric because reposts indicate higher engagement than more passive forms of online interaction, such as simply “liking” a post, but they’re by no means the only way to measure the success of a campaign. Notably, while short-term ROI can guide short-term decisions, brands should also consider the potential long-term effects of associating with a particular influencer. These effects (positive or negative) can take some time to materialize, but can have a substantial impact on a brand’s identity.

That said, when it comes to optimizing short-term engagement, our analysis provides several tactical recommendations: When selecting an influencer, brands should look for partners with large follower bases, who post frequently (but not too much), who publish a lot of original content and whose followers’ interests have some (but not too much) overlap with the brand’s domain. And when developing posts, brands should strike a positive medium tone, include links whenever possible, and avoid focusing on new product launches. With these research-backed guidelines in mind, brands can pass anecdotal evidence to ensure their marketing dollars go toward the partnerships and content most likely to deliver returns.

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