Executive Summary

This white paper provides an analysis of the correlation between influencer engagement rates (ER) and sales performance, measured in terms of Customer Acquisition Cost (CAC) and Conversion Rates. The study evaluates whether ER can serve as a reliable predictor of sales outcomes in influencer marketing campaigns. The findings suggest a lack of correlation, leading to the decision to exclude ER from the criteria for creator selection in future campaigns.

Introduction

Influencer Marketing has become a cornerstone strategy for many brands aiming to leverage the social media presence of individuals with high follower engagement.

The intuitive hypothesis is that a higher engagement rate among an influencer's followers would correlate positively with sales performance.

This study seeks to empirically test this hypothesis.

Methodology

The study analyzes data from a 3 year long influencer marketing Youtube program, focusing on two primary metrics:

• Engagement Rate (ER): The percentage of the influencer's audience that interacts with the content through likes, comments, shares, etc.

• Sales Performance: Measured by Customer Acquisition Cost (CAC), Conversion Rates (the percentage of audience members who make a purchase after interacting with the influencer's content), and Sales Volume (absolute sales).

Correlation analysis was employed to examine the relationship between ER and sales performance metrics.

Data Analysis

Correlation Analysis: ER & CAC

The scatter plot reveals the dispersion of data points, indicating the variability in CAC across different engagement rates.

Correlation Analysis: ER & Conversion Rates

A similar analysis was conducted for ER and Conversion Rates, represented by a scatter plot depicting the relationship between the two variables.

Findings

The correlation analyses conducted for both ER & CAC and ER & Conversion Rates show a lack of a significant relationship. Key observations include:

• There is no discernible pattern to suggest that influencers with higher ER yield lower CAC or higher Conversion Rates.

• Some channels exhibit high CAC and Conversion Rates but low ER, and the reverse is also true for other channels.

Conclusions

Given the lack of a meaningful correlation between ER and sales performance, the following conclusions are drawn:

• Engagement Rate (ER) is not a reliable predictor of sales performance in the context of this influencer marketing campaign.

• Creator selections for lower funnel campaigns should not consider ER as a significant factor.

Implications for Influencer Marketing Strategy

The study's findings suggest a need to re-evaluate the metrics used to assess influencer campaign effectiveness. Brands may need to consider a more nuanced set of criteria beyond ER when selecting influencers for marketing collaborations.

Recommendations

Based on the study, the following recommendations are proposed:

1. Expand the set of performance metrics to include other potential predictors of sales outcomes.

2. Conduct further research to identify which influencer characteristics correlate with successful sales performance.

3. Develop a multi-faceted approach to influencer selection that considers various performance indicators.

Next Steps

To refine influencer marketing strategies, further studies should explore additional variables that may affect sales performance. Such research could lead to the development of a predictive model that encompasses a broader range of influencer attributes and audience behaviors.