Influencers 'deliver in the long term' says first ROI study

Influencer marketing may have its critics but new data from the IPA reveals why so many brands are signing up to the creator economy, with the discipline delivering strong returns, particularly over the long term.

The findings are drawn from the sector’s first-ever cross-industry Influencer Database, spanning 220 campaigns from 144 brands across 36 sectors and 28 markets, and capturing over £133m in influencer spend.

The initiative was led by IPA Effectiveness Leadership Group member Jane Christian, who is EVP of analytics at WPP Media, and is claimed to provide the most comprehensive view to date of influencer marketing’s commercial impact.

Key analysis of the influencer marketing data reveals that the short-term ROI of influencer marketing is comparable with all channel averages (based on 59 UK campaigns unless otherwise stated).

It delivers a short-term ROI index of 99, closely aligned with the all-channel average of 100, with 4.5% of short-term sales from influencers.

And, while the short-term sales percentage of influencer marketing (4.5%) is considerably lower than that of linear TV (32%) the ROI Index is comparable between them (influencer 99, TV 97).

In fact, the ROI index of influencer marketing (99) exceeds that of standard paid social (86), although the percentage of sales contribution of paid social (13%) is considerably higher than influencers (4.5%)

Globally, short-term ROI performance remains consistent with the overall channel average of 100.

Influencer marketing also has lasting impact, with long-term multipliers of influencers the strongest of any channel (UK results only, based on 18 campaigns).

The longer-term effect of influencer marketing is substantial, with an ROI Index of 151, while the percentage of sales contribution of the discipline over the longer-term is 6.2%.

There is a significant difference emerging between the ROI index of influencers and paid social (151 vs 77 respectively).

Influencer marketing also boasts the highest long-term multiplier across all media channels at 3.35. Linear TV follows closely behind at 3.27.

Even so, the Databank reveals wide variability in influencer ROI, with many outliers and extremes.

Unlike traditional media channels, influencer marketing ROI outcomes do not strongly correlate with media optimisation factors such as spend levels.

The data suggests effective influencer marketing hinges on the fit between brand and influencer and the quality of creative content.

Wavemaker managing director of audience intelligence and marketing science Dominic Charles said: “Influencer marketing has seen exponential growth over the past couple of years but we’ve been lacking a robust view of how they perform and how they stack up against the other media channels.

“This study, for the first time, gives us a really clear view that influencers can hold their own relative to other channels and, particularly in the longer term, are a highly effective source of growth for brands particularly when brands are able to maximise the synergistic relationship between brand, creator and their audience.

“It’s also a really powerful example of what happens when we come together as an industry to drive better outcomes for clients as something like this is only possible thanks to the collaboration of the agencies involved.”

IPA director of effectiveness Laurence Green added: “This is a landmark moment for influencer marketing. For the first time, we have comprehensive, cross-industry evidence that shows influencer campaigns can deliver real commercial impact, not just in the short term, but over the long haul.

“The standout finding from this first dataset is the strength of long-term ROI and the obvious creative opportunity. With the right influencer-brand fit and powerful ideas, influencer marketing has the potential to punch well above its weight.

“While it’s still early days, and we need to build further evidence, this data gives marketers a far firmer footing for investment and creative ambition alike.”