Secrets of KOL Influencer Marketing Revealed How to Easily Calculate Your ROI?

How to Calculate ROI for KOL Influencer Marketing?

Internet celebrity marketing has become a powerful tool for enterprises to establish brand awareness, expand influence and bring sales.

It is common to hear colleagues in various promotion groups asking about the ROI of internet celebrity marketing, and many people try to measure the success or failure of internet celebrity marketing through ROI. The last step of any influential marketing activity should be to measure the results, and return on investment (ROI) is a key indicator that enterprises should track. This can help you decide which influential people to continue to cooperate with and plan your marketing budget for future marketing activities.

Return on investment (ROI) can also help you prove to your boss that KOL marketing investment is reasonable and worthwhile, and help you secure more resources and budget for future activities.

Is ROI for new products reasonable?

If you are a brand new brand, a small number of internet celebrity partnerships in the early stage are unlikely to immediately bring about sales conversions (unless a particular influencer has particularly strong product-selling ability).

Just like in our daily lives, we are surrounded by too many advertisements – we don’t even notice many brands and products in the advertisements. So people rarely make purchasing decisions the first time they hear or see a new product/new brand.

In fact, research shows that consumers need an average of 3-5 touchpoints before making a purchase decision! As a new brand, you need to lay a good foundation: attention, interest, desire, and finally, purchase action.

Instead of thinking that internet celebrity marketing is not effective after cooperating with more than ten internet celebrities and not seeing any obvious results, and asking in promotion groups: “I have cooperated with more than ten internet celebrities, why haven’t I seen any movement on my independent website? Why hasn’t Amazon tracked any conversions?”

Therefore, in the early stage of doing internet celebrity marketing, you can use Brand Awareness, Reach, and Engagement as KPIs to assess your marketing activities, bringing new fans and website traffic to your social media, rather than assessing ROI with conversion as the ultimate goal.

How to optimize internet celebrity marketing strategy?

According to the Pareto principle, 20% of the effort brings 80% of the results. This also applies to KOL marketing activities. In other words, you can assume that 80% of the marketing activity results are created by the 20% of KOL influencers you cooperate with, so you can optimize your marketing activities in this way👇

▸ Choose 100-200 different influencers for each internet celebrity marketing activity. ▸ At the end of the activity, select the top 20-40 internet celebrities (20%) ▸ Convert these 20-40 internet celebrities into brand ambassadors or internet celebrities worthy of key attention, and convert the remaining 80% into ordinary internet celebrities (no need to focus on). ▸ Repeat this process throughout the year, just like optimizing any other digital marketing activity.

In this way, you will build a key army of KOL influencers, and continue to benefit your brand in subsequent marketing activities. These KOLs also need to be maintained on a daily basis. For tips on maintaining high-quality KOLs, please refer to my previous article: Black Friday Exceeded Expectations, Talking about This Explosive Channel for Promoting Conversion. The article provides some suggestions for maintaining high-quality internet celebrities, which you can read and save.

How to calculate internet celebrity marketing ROI?

In the final analysis, the ultimate goal of any marketing activity is to earn profits that allow your business to continue to operate. Therefore, it is necessary to understand which KOLs effectively promote in-store visits, adding to cart, and purchasing in marketing activities.

This mainly refers to ROI (Return on Investment) with the purpose of conversion. Other measuring indicators for marketing activities such as Brand Awareness, Reach, Engagement, etc. will be shared in detail in later articles.

ROI of Internet celebrity marketing investment = (Income – Internet celebrity marketing cost) / Internet celebrity marketing cost

What is a “good” ROI? Generally speaking, a ratio of 5:1 is considered perfect (golden ratio), meaning that for every $1 spent on the activity, $5 in return should be generated. For some products with difficult conversion, ratios of 2:1 or 3:1 are also good.

Some companies use ROAS as an effectiveness indicator, where ROAS = Total Revenue / Total Cost.

For the product I am currently promoting, the highest ROI for Internet celebrity marketing can reach 90 (rarely seen low-cost and high-quality Internet celebrities), while the ROI for other high-quality Internet celebrities is generally around 5-10.

However, as mentioned earlier, during the new product period, it is best not to set the ROI goal as conversion for Internet celebrity marketing, otherwise the result may make you question your life.

How to track the conversion effect of Internet celebrities?

1. Track through discount codes. One of the simplest methods is to create an exclusive discount code for each Internet celebrity. The greater the discount you provide (even if it is short-term), the more motivation the KOL (Key Opinion Leader) will have to share, as it is also a kind of fan benefit for them. This also increases the possibility of conversion.

On TikTok, the audience is generally younger and has less purchasing power compared to platforms such as YouTube and Instagram. Therefore, many brands and KOL influencers on TikTok prefer to use discount codes. Also, there are no clickable links directly in TikTok videos, so discount codes are a better way to track conversions.

2. Tracking through URL

For KOL influencers, create an exclusive link to track sales results. You can ask the influencer to add a purchase link in their bio and guide fans to purchase through the bio.

① Use UTM tags to track independent website sales URL: By adding certain keywords to the URL, you can accurately see which collaborations brought you the most traffic and the quality of that traffic on Google Analytics.

Below are some UTM parameter settings suggestions: ▸ Website URL – the address where you want the influencer to guide traffic, such as your brand/product’s online store or product page ▸ Campaign Source – collaboration channel, such as TikTok/Instagram/Youtube ▸ Campaign Medium – campaign placement, such as paid social media ▸ Campaign Name – campaign name, such as Product_launch or Social media Giveaway ▸ Campaign Content – you can use the influencer’s name here to distinguish different collaborations

With UTM, you can track the data of influencer marketing campaigns on Google Analytics: number of users, number of new users, average time spent on the page, number of page visits, purchase volume, and sales.

② Amazon Attribution Tag to track Amazon sales URL: If you want to know how much traffic and conversion an Amazon import has brought you through a certain channel or influencer.

Then you need to create an attribution campaign in advance on the Amazon backend to track marketing results. You can track click-through rate, add-to-cart rate, purchase rate, and sales volume.

3. Track conversions through affiliate platforms If the influencer is using an Amazon affiliate link, they can see order data through the Amazon affiliate backend.

In general, KOLs will use the product’s Amazon link to generate trackable Amazon affiliate links before the video goes live, and then place the link in the Bio section of the video when it goes live.

Fans who are interested in the product can then click on the link in the KOL’s Bio to purchase on the Amazon platform. If someone makes a purchase, the Amazon affiliate backend can track the order data. About two weeks after the promotional video goes live, you can ask the KOL for the order data tracked by Amazon affiliates.

If it is an independent affiliate platform, both the company and the influencer can see the affiliate data.

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