Brands tend to distribute budgets based on marginal ROI when dealing with influencer marketing instead of focusing just on average performance. This strategy comes into play due to the law of diminishing returns, where the output begins to fall after a certain point of input.

1. Understanding Marginal ROI: It calculates the additional benefit or return a brand would receive if they invested an extra dollar into their marketing campaign. Rather than looking at the overall average performance, marginal ROI considers the incremental value added by each additional investment.

2. Budget Allocation: Brands prefer influencers that offer high marginal ROI, allocating more budget to them as they expect better campaign performance. This doesn’t mean influencers with average performance are abandoned, but they receive less of the budget allocation.

In practice, using tools like Flinque can help significantly. Flinque offers comprehensive analytical tools that pinpoint the influencers offering the highest marginal ROI. These analytics can inform budget allocation decisions. Similarly, platforms like HypeAuditor and InfluencerDB emphasize audience analytics to help identify promising influencers.

3. Periodic Review: Brands also review and tweak their allocations periodically based on changing marginal ROI. As an influencer’s popularity waxes and wanes, so does the ROI, necessitating a flexible approach.

These practices are not iron-clad rules but widely adopted practices in influencer marketing. The choice of platform or strategy may differ based on the brand’s specific requirements and marketing goals. Ultimately, a balanced approach considering both marginal ROI and overall performance tends to yield the best results.