All right, I’ll say it: it’s time to call out a common misconception when it comes to running influencer marketing campaigns: running performance campaigns based primarily on creator CPM is the wrong approach. You ready for this one? Creator CPMs are not correlated with brand performance. Why? I’ll tell you: Creators are decentralized media companies. When demand for advertising on their channel increases, prices go up. When demand goes down, prices go down. Higher prices don’t indicate a bad deal; instead, they generally reflect higher quality. Before I share the data to back up my claim that CPM is not correlated with performance, let me say this: yes, media of all types, including influencers, perform better when you’re getting the same thing for a lower price. But remember that by choosing a lower CPM creator, you’re not getting the same thing. You’re either getting a less proven creator, a less incentivized creator, or a less effective creator. CPMs are easy to understand, and the data is easy to collect. For this reason, many brands gravitate towards only looking at creator type and CPMs to decide which creators are the right partners for performance campaigns. It’s the classic fallacy of looking at what you can measure versus looking at what drives performance. And this approach is wrong. When we look at the data, we see that CPMs have no correlation with performance. Zero. The graph displays the CPM of every YouTube creator we've worked with over the past year on the y-axis, and their brand performance on the x-axis. Brand performance is normalized, with the best performer at the 100th percentile and the worst at the 0th percentile. As you can see, neither a higher or lower CPM has any correlation with performance for a brand. So what is the key indicator of performance? Historical performance. Historical data from previous campaigns is not only how we recommend creators to our brand partners, but also the best indicator of future success. Yes, we have proprietary performance data which allows us to see which creators have performed for performance campaigns – but just as important is the fact that we’re always analyzing data to unearth another nugget of value to help our brands gain an advantage. And one thing we sure as hell don’t do: simply say that lower CPMs mean stronger performance.
Your emphasis on historical performance over CPM is quite interesting. Do you find that brands are more receptive to adjusting their strategies based on this data, or do they still cling to the allure of lower CPMs?
Price is what you pay. Value is what you get.
This is such an eye-opening perspective! It's easy to fall into the trap of focusing solely on CPMs because they're straightforward to measure. But your point about historical performance being a more reliable indicator makes so much sense. It's a reminder that quality and proven results should always take precedence over just the cost. Thanks for sharing this data-driven insight! 🌟
I'm intrigued by your claim that CPMs are not correlated with brand performance. I'd love to see the data and analysis you've gathered to support this assertion. It could be a game-changer for how brands approach influencer marketing.
Great info to have! Lots of valuable insights to take from this graphic and the enlightening read. Interesting to see the lack of correlation between CRM and performance...
this is why i use linkedin, awesome info
Sounds interesting!
Talent Manager for YouTube Content Creators - Ziggurat XYZ
6moThis is a really nice visual. Also, someone being at $275 cpm and almost hitting 80% is wild! 😂