6. Create a budget for your influencer campaign
1. Choose 10 influencers for your campaign or use a SaaS tool to identify influencers and add them to a spreadsheet with columns for their Name, URL, and # of Followers.
Alternatively, you can search within your chosen social media platform itself. For example, you can browse Instagram’s Explore tab to find new influencers.
2. Sum up the column # of Followers and multiply the result by 0.1 to calculate your Estimated Impressions in a new column.
Since there are no reliable stats on the organic reach for most social media platforms, multiplying the # of Followers by 0.1 assumes that at least 10% of the influencers’ followers see their content. The stats published may vary depending on which 3rd party you ask. For example, Instagram itself has said that around 90% of what users now see on their feed is from friends and family. So you can assume that influencers do not fall into that category. For example, if an influencer’s # of Followers is 10 million, multiplying it by 0.1 will give you 1M Estimated Impressions.
3. If you work with a Brand objective, go to Facebook Ads Manager to build out your audience, generate the Potential Reach, and copy the number into a new column named Audience.
In Facebook Ads Manager, click Create > select a Goal > Create New Ad Set > Create New Audience. Choose either a Custom Audience or specify the location, age, and other demographics. Copy-paste the Potential Reach number on the right side into your spreadsheet into the Audience column. If you don’t have access to Facebook Ads Manager, then consider creating an account. It is free for anyone. Alternatively, estimate your potential audience size using your local market census data, such as census.gov in the US, or simply Google search census data for your area. Census data is typically hosted on government-run statistical bureau websites.
4. If you work with a Direct Response objective, calculate your required audience size using your revenue target and website conversion rate and add it to a new column named Audience.
Divide your Revenue Target by the Avg Price of your product or service to get your Required # of Customers. Divide the Required # of Customers by (Conversion Rate / 100) to get an estimate of Required Website Visitors. Divide this by (Avg ad Click Through Rate / 100) and add the result to the Audience cell. For example, for a $1,000,000 USD Revenue target / $299 Avg price, you would need 3,344 customers. Then 3,344 customers divided by ( a 1% website conversion rate / 100) would mean you need 334,400 website visitors. 334,400 website visitors divided by ( 2% ad CTR / 100) would mean you need an audience of 16.7M. This process assumes your objective is revenue and a sale is made through your website or landing page. The steps involved for other objectives, such as leads or event signups, would be similar.
5. Multiply your Audience by 2 and add your result to a new column named Required Impressions.
Facebook and Instagram follow the MRC standard, which guarantees an ad viewability of at least 50%. Therefore, following the example above, 16.7M x 2 = 33.4M estimated Required Impressions assuming an ad frequency of 1.
6. Subtract your Estimated Impressions from Required Impressions and add the result to a new column named Impressions to Buy, multiply this by your average CPM/1000, and add the result to a new column named Working Media Budget.
Depending on the market, audience and other criteria, CPM (Cost per 1,000 impressions) can be anywhere from US$2-8. Going back to the last example, to make $1M revenue, you would likely need to purchase $100K worth of working media – a budget that is only used for message distribution and includes some buffer. Probably more if you are an inexperienced media buyer or competing with other advertisers during a seasonal event like Christmas or Ramadan. Remember, for all of this to actually work you need to carefully choose which influencers you work with and the final creative needs to be “thumb-stopping”.
7. Add other costs like Creative Production, Influencer Reimbursement, Measurement SaaS tools into new columns, along with any Other costs you might have and add everything up to get a Total Budget estimate.
For example: Working Media: 100,000 USD – 82% of total, this is a good ratio. Aim to never go below 60%. Creative Production: 15,000 USD. Influencer Reimbursement (gifts, travel): 5,000 USD. SaaS Measurement Tool: 600 USD. TOTAL BUDGET: 120,600 USD – 12% of a $1M revenue. Theoretically reasonable, but do consider your profit margin.