What makes YouTube the best channel for influencer marketing ROAS?

Unlike Meta placements that fade into the ether, YouTube videos have a compounding effect that drives additional – and trackable – ROAS over time. Peak 21 co-founder Roman Khan has discovered a winning formula for DTC marketing based on three “how-to’s” that you can leverage to build your own YouTube influencer empire.

1. How to Calculate Your CPM Ceiling

What is the maximum you’re willing to spend on an influencer video placement?

Market research and the right internal formula will help you set parameters for what you should spend on an influencer video based on their audience size, engagement, and product category. Start simple, and refine as you scale.

Here are some (fictional) examples that Roman provided based on his team’s internal standards, which include market niche, target budgets, and more:

how to calculate your CPM ceiling

Note that subscriber numbers are important, but view counts are what really move the needle when it comes to influencers.

When you have an advanced understanding of the marketplace, you can identify different CPM targets based on segments within each niche, such as differentiating online gaming categories based on the popularity of the game and the audience size.

2. How to Calculate “True ROAS” By Influencer

Determining true ROAS by influencer starts by calculating your channel multiplier. You can make up for “voucher breakage” by estimating how understated your voucher-tracked ROAS is for YouTube influencers.

For example, if you spend $1 million on YouTube influencers and your voucher-tracked revenue is also $1 million, but the revenue attributed to those influencers by a post-purchase survey is $3 million, your YouTube influencer ROAS is understated by a factor of 3.0.

Again, as your marketplace knowledge advances, you can apply these metrics to other influencers’ campaigns to get a better understanding of true ROAS.

3. How to Estimate Your Payback Window & Find Winners

Determining your purchase window is also important to calculate how much revenue your influencers actually generate.

Roman’s company finds this information with post-purchase surveys, which showed that 50% of purchases happened within seven days of hearing about the brand, and 4 out of 5 purchases related to YouTube videos occurred within 60 days:

how to estimate your payback window by influencer

Based on this information (and a breakeven ROAS of 2.0), you can estimate ROAS throughout each segment of the payment window after each video drops:

how to estimate your payback window by influencer

Finally, nailing down your payback window and true ROAS will make it easy to identify effective performers and decide if you should book them regularly, renegotiate, or cut bait:

how to use your payback window to rebook winners

Note that even the highest performers are only rebooked every month so as not to oversaturate that audience. And while these numbers will be different for different brands, Roman continues to rely on YouTube – which he calls “the QVC of our generation” – for consistent DTC performance.