Leung et al. (2022a), Does Influencer Marketing Really Pay Off?

Question 1

Influencer Marketing Industry:

Answer 1

• Valued at $16.4 billion in 2022, with 75% of brands allocating a dedicated budget.

Question 2

• Does influencer marketing yield positive ROI?

Answer 2

• Research shows a 1% increase in influencer spend correlates with a 0.46% increase in
  engagement.

Question 3

• Opportunity:

Answer 3

• Brands leave value untapped, with potential for a 16.6% engagement increase by
  optimizing strategies.

Question 4

Seven Variables Impacting ROI

Answer 4

1. Number of Followers
2. Posting Frequency
3. Follower-Brand Fit
4. Influencer Originality
5. Post Positivity
6. Including Links to the Brand
7. New Product Announcements

Question 5

1. Number of Followers:

Answer 5

• Influencers with larger followings yield higher ROI due to greater reach and perceived
  credibility.
• Posts from influencers with one standard deviation more followers achieved 9.2% greater
  ROI.

Question 6

2. Posting Frequency:

Answer 6

• Goldilocks Effect: Optimal posting frequency balances visibility and fatigue.
• Five posts per week is the sweet spot.
• ROI increased by 53.8% when firms partnered with influencers who posted at this
  frequency.

Question 7

3. Follower-Brand Fit:

Answer 7

• Alignment between followers’ interests and brand category boosts engagement.
• Optimal fit: 9% of followers have interests matching the brand.
• One standard deviation away from this reduces ROI by 7.9%.

Question 8

4. Influencer Originality:

Answer 8

• Influencers with more original content attract attention and appear authentic.
• ROI increased by 15.5% for influencers with higher originality scores.

Question 9

5. Post Positivity:

Answer 9

• Medium positivity works best:
• Overly positive posts may feel disingenuous and reduce engagement.
• Reducing excessive positivity improved ROI by 1.9%.

Question 10

6. Including Links to the Brand:

Answer 10

• Posts with links to the brand’s website or social media perform significantly better.
• ROI increased by 11.4% for posts with links.

Question 11

7. New Product Announcements:

Answer 11

• Posts promoting new product launches yield 30.5% lower ROI than regular product posts.
• Example: Dyson’s new product announcement underperformed compared to Kiehl’s
  promotion of existing products.

Question 12

• Partner Selection:

Answer 12

Choose influencers with: Large but well-targeted follower bases; Medium-level posting
activity; High originality.

Question 13

• Content Creation:

Answer 13

Develop posts with: Medium positivity; Links to brand resources; Focus on established
products rather than new launches.

Question 14

• Data-Driven Optimization:

Answer 14

• Leverage analytics to adjust influencer selection and content strategies in real-time.