What is ROI?
ROI (Return on Investment) measures how much a sponsor or brand will return from investing in you for a campaign.
A good ROI means a brand is earning more than they spent on the partnership or sponsorship.
Why is it important?
Brands want to ensure that their partnership is beneficial and that they are achieving enough sales, conversions, and awareness for their sponsorship.
How is ROI calculated?
ROI is usually given as a percentage. The formula for calculating ROI is:
What factors determine ROI?
- Reach: impressions, viewership, engagements
- Response: click-through rate or ad interactions
- Conversions: sales, downloads, sign-ups, etc.
Be sure to track your ROI for future campaigns
Next time you partner with a brand, you’ll have data to leverage pay.
To track your ROI, ask the brand you’re partnering with for a UTM link or a custom code, to view every sale, engagement, or sign-up that came from you. You can also use a bit.ly or link tracker to track the click-through rate and ad interactions.
Tailor your next sponsored post to optimize for ROI and the brand will want to work with you over and over again!