Running performance campaigns solely based on creator CPM is an ineffective approach! 🤯 Our CEO, M. Bradley Hoos, shared the game-changing revelation with his LinkedIn community this morning and we had to make sure you saw it, too! Check out the post to see what the *true* key indicator of performance is.
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.