Budget
Reach
Visits
small size channel
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middle size channel
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big size channel
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Budget
Reach
Visits
small size channel
0
middle size channel
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big size channel
0
Budget
Reach
Visits
small size channel
0
middle size channel
0
big size channel
0
As of 2019, we all fully understand the real power and of Influencer Marketing. This is not just a trendy thing, but a must-have marketing instrument that drives outstanding results. Influencer Marketing can be good both for your brand awareness and your conversion rates. However, due to the lack of market regulation of this creative niche every advertiser or businessman is experiencing a difficulty in the evaluation and negotiation process. How much money to invest in a single sponsored post of an influencer? What budget do you need to plan for an Influencer Marketing campaign in 2019? We all need to start regulating, measuring and assessing our marketing efforts to predict the outcomes.
At IgFace we are 100% certain that it is possible to calculate ROI and effectiveness from an Influencer Marketing Campaign. And it is one of the many reasons we developed the Influencer Marketing Budget Calculator from IgFace. Let us review what kind of metrics, numbers and information influence over this estimations.
There is a list of important facts that you should consider before starting a campaign:
For instance, let’s imagine there is a midzise influencer with 100,000 Unique Monthly Views. Marketing itself is based on assumptions. So, there is a conservative assumption that 3% of this audience will see your advertising (whatever it is, a full video or integrated product placement). We can estimate that 3000 users will see your paid content this month. Now let us move further down the funnel and see how many conversions you will get from this activity. Relying on the same conservative assumption, we may suggest that you will gain a 3% Conversion rate, which means:
3000 Reach * 3% CR = 90 Conversions. You will get approximately 90 Sales or Leads from this investment.
Lifetime Value and Customer Acquisition Cost are the pivotal formulas for any influencer marketing estimation.
LTV (Lifetime Value) is the amount of money an average customer will bring to the business during his or her lifespan. While Customer Acquisition Cost means the amount of invested funds for this user. There is another marketing truism that CAC must be 3 times lower than the LTV. It is an obvious indicator of profitable business. Now let us simulate a business model.
customer has a lifespan for 2 months. It means that you get $157,5 from every customer during his or her 2 months lifespan. From this model we understand that you can allocate $52,5 per every customer/buyer.You sell some gadget for $450 each, while your margin equals 35% for each Sale and every
Since you have a $52,5 budget for every customer, you can predict the success of your Influencer Marketing campaign. Just multiply your CAC by the number of conversions you are going to obtain. For instance, $52,5*10 = $525. This is your investment. Now, we can assume that your profit must be as high as 3 times of your investment, which is $157,
Now, LTV_Total - CAC_Total = $1575 - $525 = $1050
