Why brands waste money on influencer marketing and how they can fix it.

A hand holds burning banknotes, symbolising financial loss or reckless spending.

Most brands think they’re investing in growth with influencer marketing, but in reality, they’re leaking money. Studies show that over half of influencer marketing campaigns fail to generate measurable ROI. In this article, I will break down exactly how brands are wasting money, what they can do to avoid it, and how to see a measurable ROI.

WHERE THE MONEY GETS WASTED

Paying for reach instead of results

Brands love to focus on vanity metrics like follower and like count, thinking this automatically means that an influencer will convert. I’ve seen brands again and again pay influencers whose audiences look good, like makeup brands paying female creators who, on first inspection, have 1 million+ followers, but dig deeper and you’ll find the followers came from one-off viral trends or engagement pods (group chats where users agree to like and comment on each other’s posts to trick the platform into showing a good engagement rate). Hint: these campaigns will not convert, and the brands will pay through the roof because of the following.

This happens because brands lack proper vetting of creators before they pay. When I hear people say that engagement rate is the only thing you need to look at, I cringe, knowing that,

as important as it is, it’s not the be-all and end-all of influencer marketing vetting. This is why I say proper vetting, not just vetting.

Wrong influencer fit

Some brands will unknowingly pay influencers whose audiences do not align with what they are trying to sell. This can be tricky because, obviously, a brand selling DIY kits won’t contract an influencer whose niche is basketball (or so you would hope). However, sometimes it can be more complicated than this. A recent example I’ve seen is a huge UK department store marketing its furniture and interior design products through an influencer who, on the surface, seemed to have perfect audience alignment. In reality, this creator had switched niches from something unrelated a year before.

This meant that the brand was paying an influencer with a follower count of 400k when, in reality, the number of followers who had actually followed for interior design content was just above 80k. This would be fine if they were paying the rates of an influencer with 80k followers, but they weren’t.

I know about this because my company, InfluencerAudit, was actually contracted to find out what was going wrong, and within 24 hours, we turned around and told them the bad news. With only £100, they were able to find out their £10,000+ mistake almost instantly. That’s great value for money if you ask me!

Trusting influencer marketing agencies with their suggestions

Now, we all know that the majority of businesses are only in business because they make a profit. This is fine, of course. However, some influencer marketing agencies get greedy. Let me explain.

These agencies, 90% of the time, are paid off a revenue split. For example, if the revenue split is 20% to an agent and 80% to the creator, a £1,000 deal will end up netting the agent £200. However, some agencies will take on influencers knowing they have a bad engagement rate and a high number of bot followers, but they do this in return for a bigger revenue split, sometimes 40%+. What this means is that the agency will push this creator for more jobs even if they are not suitable for the brand, knowing that if they land the job with that same brand paying £1,000 for a post, they will make £400 instead of £200.

Sneaky, huh? The people you contract and trust to deliver influencers for your campaigns are stabbing you in the back to make more money. Who would have thought!

One-off campaigns with no strategy

Brands love to throw money at a single post or story, thinking that’s all they need to get conversions. Studies show that at least seven exposures are needed before a purchasing decision is made. This is called the ‘rule of 7’.

Keeping this in mind, having a strategy is super important when it comes to conversions, as brands may need a month of regular posting through an influencer before their audience trusts the product enough to make a purchasing decision.

Think of the last time you bought something from an advert of any kind. Was it the first time you saw the product ever, or had you seen it before and thought, “Maybe I want that, but I’m not convinced”?

Repetition is something that, in traditional advertising, is greatly optimised for; these are called retargeting ads. However, this is sorely missed in influencer marketing.

Poor tracking and attribution

Some brands will spend thousands on influencer posts but not set up proper tracking links or discount codes, meaning they have no analytics to measure the impact of their campaigns. The only thing they have to look at is the attention that the posts are getting.

This is an issue with single-post deals; however, it exponentially gets worse when brands re-contract the same influencer to post again without the proper analytics to prove they got a good ROI the first time. This essentially means the brand is flying blind.

Let me give you an example of how quickly this can turn into mayhem. A medium-sized clothing brand contracts ten influencers to post three times each. They post around the same time, and the brand sees a spike in sales. The campaign is working!

However, after the three posts, the ROI is negligible, so the brand turns around and blindly gets rid of the three influencers who got the least views. They run another campaign with the remaining seven influencers, but now see a negative ROI. How is that possible? They got rid of the ‘lowest-performing’ influencers.

So, they try again, this time contracting new influencers and getting rid of two more of the originals with the lowest views. They still lose money. The brand packs it up and thinks, “Influencer marketing isn’t for us.”

However, if they had implemented proper tracking, they would have seen that when they initially ran their campaign, the worst-converting influencer was actually the one they were paying the most for, and the best were the ones who got the least views. So when they got rid of those influencers, it was a downward spiral from there.

WHAT SMART BRANDS DO DIFFERENTLY

Smart brands work with influencers who align with their audience and values. This should be the first thing you look at before any further vetting takes place. Putting petrol in a diesel car, no matter the quality or quantity of petrol, won’t make it drive.

We’ve seen a trend over the last couple of years that shows micro and mid-tier influencers convert with the highest ROI because they get better engagement (as long as this engagement is legitimate, as I discussed above). So, I urge you to stop looking for that one home-run influencer with millions of followers and shop around for a group of influencers with fewer followers. I know influencer discovery or sourcing can be tricky, but it is truly worth the extra time and headache of finding multiple influencers over one ‘heavy hitter’.

Another thing smart brands do is build long-term partnerships with influencers, making use of the ‘rule of 7’ instead of working against it. A long-term partnership is invaluable, as after a time, audiences start associating a brand with a specific influencer, meaning that even without advertising spend, someone seeing the influencer will automatically think of the brand. This leads to a huge ROI, as every post, paid or not, that an influencer makes gets the brand conversions.

Finally, smart brands use proper vetting, data, and clear KPIs before and after spending. This means they know exactly what their ROI is likely to be and can adjust the right things post-campaign if the results aren’t as expected, thereby lessening any further negative impact if something goes wrong.

In conclusion, influencer marketing is not the problem; wasted strategy is. Smart brands that treat influencer marketing like any other investment, vetting, strategising, tracking, and testing, actually see a good ROI.

If you found this interesting or even a little bit useful and want to stop wasting money on influencer marketing spend and achieve a higher ROI in your marketing campaigns, an influencer audit by my company, InfluencerAudit.io, can show you where the leaks are. We can also find you the perfect influencers.