The main focus of this thesis is to investigate profitability and KPIs in influencer marketing strategies. It has been developed in order to explore the extent to which these tactics succeed at increasing customer engagement and brand loyalty through realness and openness. This study has adopted a mixed-method research design, which includes a combination of literature review, empirical study of surveys, interviews with industry experts, statistical analysis (correlation analysis) and a case study. The study revealed engagement is more relevant to influencer campaign success than the number of followers. The benefits of using micro-influencers are that they typically drive higher engagement rates for lower cost than macro-influencers. The research analyzed different KPIs — which included brand awareness, engagement, traffic, sales, customer retention. There are also alternative ways in which the ROI of an influencer campaign can be measured apart from sales and these include brand awareness, brand sentiment, engagement and purchase intent. While these metrics can be valuable, marketers need to ensure that the campaign objectives directly align with their goals, as these metrics are only as good as their ability to measure the big picture. The above clearly shows that ROI in influencer marketing is significantly goal oriented therefore its measurement is extremely case by case oriented. The findings suggest that brands should prioritize authentic and engaging content over the amount of followers. In turn, brands are able to maximize ROI by partnering with micro-influencers and measuring success through engagement metrics. Brand loyalty, customer lifetime value and other long-term effects should be taken into account in addition to short-term sales. The research also serves as a reminder to all to use more than one platform and leverage enhanced tech like AI and predictive analytics to refine influencer strategies even more. These methods will not only increase the quality of short term campaign results, but cultivate brand loyalty and long-term profitability.