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2 Types of Sales Conversions Stemming from Influencer Marketing


Key Article Takeaways: 

  • There are two different conversion rates to consider: Product Page Conversion Rate and Influencer Conversion Rate
  • Revenue = traffic x conversion rate x price.  Everything you do in eCommerce will affect one or more of these factors
  • Of those three factors, conversion rate is the most important one to focus on.  Traffic can be unsustainable, and Price can be defined by the marketing and thus out of your control



This post might more properly belong in a gen.video FAQ under a heading like, “Either I’m crazy or you’re crazy: my gen.video team keeps talking to me about the conversion rates but I swear that they are talking about at least two different things, maybe three or four!  What’s going on and why can’t you be more clear about all of this?”

All right, that would be a really long "Q" and probably no one (other than me) gets all that worked up over stuff like this but it’s still a great little topic so let’s get into it. There are in fact two different conversion rates in the gen.video lexicon and they are totally (well, sort of totally?) different. That said, they are both conversion rates and so there’s not a great semantic for differentiating them so let’s just talk it through.

The first one is product page conversion rate. As any ecommerce pro will tell you, product page conversion rate is simply the number of unit sales divided by the number of visitors to the product detail (PDP) page. It’s so simple to calculate that it is mind-boggling to contrast the number of variables that translate into every individual product’s conversion rate. A friend of ours runs a billion dollar business from the single motto: revenue = traffic x conversion rate x price. The point? Everything you do in ecommerce will impact one or more of those three factors and so success is merely (merely!) figuring out the biggest leverage point and focusing on it.

While admitting I might be biased (as will become evident), I’d argue that of the three factors, conversion rate is by far the most important one to focus on.

Why? Let’s take them in turn. 

  1. Price is largely defined by the market and sometimes not even in your control. If you sell your products to Amazon for them to resell, they largely control the price, not you. Even if you are 3P (you sell directly), you can’t sell at any material premium to your competitors or your conversion rate and your traffic will head into a self-fulfilling death spiral.

  2. As for Traffic, this might be the easiest variable to change in the short run but the problem is that if you drive traffic to a low-converting page, this is the proverbial pouring water into a leaky bucket. Especially if you are doing it by buying search traffic, it isn’t going to be sustainable as competitors with higher conversion rates will eventually be able to outbid you. On the other hand, ecommerce sites love high converting pages and so the site search algorithms will push more organic traffic to your page, solving the traffic problem for you. Two other challenges with traffic driving tactics:
    • They tend to be temporary. gen.video (and most other influencer marketing platforms) pushes traffic to product pages. That said, we talk a lot less about this benefit relative to our conversion rate lifting impacts because they are only visible for a short term and the impacts are generally trivial relative to what we can show relative to conversion rate impacts

    • Traffic bursts tend to drive down the page conversion rate in the short term, making it appear to be self-defeating. This is about as close to a mathematical axiom as exists in ecommerce. If you think about the “steady state” of a product page, the only traffic to the page would be repeat or lower funnel shoppers who tend to convert at a very high relative to rate. But as marketing activities ramp up and send new potential customers to the page, lots of them won’t convert for any number of reasons. As that new low-converting traffic mixes with the loyal high-converting traffic, the conversion rate falls. Hopefully total revenue grows: some of the new people should convert in addition to maintaining the old base, but the falling conversion rate will look scary.

And so we come back to Conversion Rate lifting tactics. They may be the hardest to execute but they tend to be more durable and they tend to support or even enhance vs. cannibalizing the other two factors. What are they? Well, outside of improving the product itself, conversion rate lifting tactics tend to be focused on optimizing the merchandising: more descriptive content that describes the product’s features, a higher star rating and more reviews and of course, more attractive images and videos.

Our research has shown that our videos lift product page conversion rates on average 20% (our retail partners and others have also validated those numbers). Now that’s not of the people who watch the video, that’s across all page visitors. It’s a huge number and in theory it should be a durable impact: a great video will have the same impact on a site visitor in six months as it does today. That leverage is enormous: a relatively modest product page can have $1mil in annual sales. A 20% lift in conversion rate (all else equal) would equate to an additional $200K in sales, which is a number that dwarves all but the largest influencer campaigns. Oh and by the way, that’s an additional benefit beyond the media value of the influencer campaign itself.

So what’s the OTHER conversion rate? The other conversion rate looks at how frequently the downfunnel traffic that an influencer sends to a PDP converts to a sale. We’ll call this one the influencer conversion rate. When looking at an individual campaign’s performance, it’s actually not my favorite metric because:

  • It’s less intuitive than click through rate (CTR) which measures clicks over impressions or views. To me, an influencer that delivers high views AND high clicks has done a great job already. If that traffic didn’t end up converting, without knowing more, that’s possibly more on the product than the influencer
  • To really tie conversions back to how recruiting and recommending influencers (which was probably based on fit and reach), we have to take conversions, divide by clicks, divide that by views and then divide that by reach. Now we have a fraction that’s so small it’s meaningless. So what do we do? We look at the total dollar revenue the influencer drove and if it’s a big number we celebrate (if we are getting fancy, we’ll divide the revenue by the cost of working with the influencer and call that their “ROI”)

So why look at influencer conversion rates? The first one is that for influencers who do – across multiple campaigns and brands – outperform on this metric, it is proof-positive that they have real influence. Their audience isn’t just watching or just clicking as a show of support, they are actually buying based on that influencer’s endorsement. That’s a powerful message and one of the reasons we are featuring this metric on influencer profiles as we expand our discovery platform.

The other interesting note is that it is actually comparable to the conversion rate above. It is looking at the number of people who buy divided by visitors to a product page. In theory you could compare the conversion rate of an influencer’s post to the baseline conversion rate for the page to determine just how qualified the new traffic is. Perhaps this kind of analysis does occur with some DTC brands or even SMB sellers truly dialed in on evergreen influencer marketing (drop a comment below if you are such an expert), but in my experience with omnichannel enterprise class brands, I have never seen anyone do this kind of math…the data visibility is just too far apart in most cases. That said, the gen.video platform is just a step or two away from bringing all of this data together to provide a whole new level of insights to brands.