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Influencer marketing is the fastest growing category in advertising with interest in influencer marketing having increased 90x since January 2013 (based on Google Search data). Yet despite this growth, over half of all worldwide brands (53%) claim that measuring the performance of influencer marketing campaigns remains a significant challenge (eMarketer).
As brands adapt to influencer marketing, new models for paying influencers have started to pop up. Rather than just developing flat rate sponsorships, some companies are now looking at cost per engagement (CPE) as a way to measure and compensate influencers (Digiday). For brands experimenting with these new models, it’s important to look at whether CPE is actually the best method for evaluating the success of a brand’s marketing initiative.
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Cost per engagement can be a difficult metric to measure and compare from influencer to influencer or campaign to campaign, especially because there is no standard measure for CPE. Some brands may calculate CPE based on a specific consumer action, such as an email sign up or purchase, while others determine CPE based on clicks (though this can lead to click fraud and/or spammy content that does not align with the brand).
The lack of uniformity across the different social platforms (Facebook, Instagram, Snapchat, YouTube, blogs, etc.) also makes measuring CPE a challenge; what is considered “engagement” on one platform might not event exist on another. Choosing influencers or measuring campaigns based solely on engagement, therefore, can be problematic, if not impossible, for marketers.
Related Post: How To Measure Influencer Marketing Campaigns
For influencer marketing campaigns, success is typically based on meeting predetermined key performance indicators (KPIs) and not on specific metrics like engagement rates (or cost per engagement), impressions, sign-ups, sales, etc. (though each of these can be considered KPIs, if the brand so desires). Because every brand and campaign are different, using a cost per engagement metric is not always the best way to assess a particular social media star or influencer-based initiative (Digiday).
The success of a direct-response campaigns (which asks audiences to take a specific action), for example, is reliant on high levels of engagement; if the influencer cannot inspire engagement/action among his or her followers, the campaign will underperform. For other types of campaigns, like for branded initiatives, an influencer’s reach (measured by number of followers, impressions, etc.) is a better predictor of campaign success.
While CPE may be a useful metric for some influencer marketing campaigns, brands should be leery of any agency, platform, or social media influencer that claims cost per engagement is the most important factor in determining campaign success or that they can guarantee a specific CPE. Instead, companies are advised to find an influencer agency that will help establish measurable KPIs and choose the right influencer for each campaign based on goals, budget, audience, and other important factors.
Related Post: How To Choose The Right Influencer Marketing Agency