Marketing budget Calculator

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Marketing Budget Calculator

The real power of Influencer Marketing grows strong with each passing year. Influencer Marketing has become the vital life source that drives social media forward. This instrument is extremely important for brand awareness and social engagement rates. But the lack of market regulation of this creative niche doesnā€™t allow to plan a cost-effective promotional campaign. How much should you invest in a single sponsored post of an influencer? How to plan a budget for an Influencer Marketing campaign in 2019? The Likigram Marketing Budget Calculator has been developed to take care of planning an effective promotional campaign in the modern competitive world.

We understand the value of being able to calculate ROI and effectiveness from an Influencer Marketing Campaign. We would like to focus on the stats that go into the final results of the Marketing Budget Calculator.

How to Calculate Influencer Marketing Effectiveness

Before starting any type of promotional campaign you have to consider the following first:

The Social Engagement rate is the most critical metric that influences the end results of your campaign. Alway be sure to check the engagement rate of any influencer before partnering. Look closely to the number of likes, comments and views of every influencerā€™s post. Donā€™t forget to check the quality of followers, as some of them might turn out to be fake profiles. The engagement rate is a key factor that interprets the level of success and popularity of an influencer in social media. It shows the relation of the general audience to the content of the influencer and the level of interest or popularity it has. The higher the engagement rate is the more conversions you will get over time.

You must also remember that your product or service must be highly related to the influencer content niche in order to successfully target your required audience. The Influencer content niche should be analyzed thoroughly before planning any Influencer marketing campaign. To check the content niche you may perform a simple hashtag analysis and a quick look over of the influencerā€™s feed content. Do not forget to check the influencer pages on other social networks: Youtube, Instagram, Twitch, Twitter, Facebook. Your potential customers are in the followers list of hundreds of bloggers and influencers, but you need to make sure that these numbers are pretty much the same on every single social network.

Estimating the Influencer Marketing Budget

Calculate the Total Reach from an Influencer channel source It is paramount to calculate the total reach that you will get, basically how many people will see the sponsored content.

Calculate the number of unique visitors you will get from a sponsored post This number is not always consistent and depends on the niche, popularity of the blogger, the social engagement rate, etc. In general, a 5% CTR (click through rate) is considered to be a good metric and you can start moving from here.

Calculate the percentage of conversions from sponsored content The Conversion rate is a crucial stat that shows how many visitors are actually interested in your product or service and will eventually complete a purchase. Coincidentally this metric also relies on the engagement rates, the blogger audience size and quality of content. In total, these three metrics should be taken into account before investing funds in Social Influencer Marketing.

How to Calculate the number of Conversions and approximate Budget for Influencer Marketing

Letā€™s say you spotted an influencer with 100,000 Unique Monthly Views which seems adequate for your promotional purposes. If you are new to this, you have to keep in mind that just like other estimates, marketing is based on predictions and sometimes on trial and error. Letā€™s assume that 3% of the channelā€™s audience will see your advertising, whether its is short segment or a full sponsored video or post. We can therefore estimate that 3000 users will see your paid content during this month. We will now check how many conversions you will get from this paid content. By taking into account a realistic 3% Conversion rate, we can calculate the following:

3000 Reach * 3% CR = 90 Conversions. You will get approximately 90 Sales or Leads from this promotional campaign.

Calculate LTV, CAC and Budget for Influencer Marketing Lifetime Value and Customer Acquisition Cost are vital formulas for any influencer marketing planning.

LTV (Lifetime Value) is the amount of money an average customer will bring to your business during his or her lifespan. Customer Acquisition Cost is the amount of invested funds for this particular customer. There is a common marketing belief that CAC must be 3 times lower than the LTV. It is a good indicator of profitable business. Letā€™s calculate a business model as an example:

Letā€™s imagine a customer has a lifespan for 2 months. It means that you will earn $157,5 from every customer during his or her 2 months lifespan. By knowing this, you can allocate $52,5 per every customer/buyer. Letā€™s say you sell a service or a product for $450 each, with the previous calculations we can now that your margin equals 35% for each sale.

Influencer Marketing Budget Calculation

This is the final number that we are looking for. Now that you have a $52,5 budget for every customer, you can predict whether your Influencer Marketing campaign will be successful or not. All you have to do is to multiply your CAC by the total number of conversions you will receive. For example, $52,5*10 = $525 is your total investment. By assuming that your profit must be 3 times higher in comparison to your investment, which is $157, we can calculate the expected Total Profit from your Influencer Marketing campaign:

LTV_Total - CAC_Total = $1575 - $525 = $1050