One of the most critical parts of any brand’s strategy today is measuring their social media marketing ROI (return on investment). It allows them to understand the effectiveness of their campaigns on different platforms, evaluate the efficiency of their work, demonstrate value to the company, and tweak their strategy over time to boost results.
What is social media marketing ROI?
Social media marketing ROI is a key metric that shows the amount of value gained by your assets in different platforms. Typically, return on investment on other business marketing strategies are quantified in terms of monetary value. But for social media, measurements are different.
For instance, if your paid campaign goal is to boost influence and awareness, ROI could be measured by growth in post-impressions or number of followers added to the duration of the campaign. In other words, you must have a clear objective first to be able to quantify your ROI.
Importance of measuring social media ROI
Just like other marketing practices, you are also investing time, effort, and money into your social media marketing plan. So, it is understandable that you want to know whether your investments are paying off or not.
However, this doesn’t mean that you should quit altogether if you’re not getting any ROI from social media. Measuring your success will allow you to understand what you’re doing right and wrong, as well as what you can do in the long run to achieve your goals.
Simply put, social media marketing ROI is not just about the investment – it is also about learning from your results and implementing them to optimize or improve your overall strategy. Other than that, measuring will also help you figure out where you need to allocate your investments more.
How to measure social media marketing ROI
Quantifying your ROI can be a daunting task, especially when it comes to organic marketing since your plan and content output are not aligned directly to certain attribution links. Paid marketing is a bit similar, too. Outside of ecommerce and direct-to-customer campaigns, it can be hard to measure how much value they are returning.
But don’t worry, we’re here to help. Here are the basic steps that you can take to measure your social media marketing ROI:
1. Calculate how much you spend
First, know how much you’ve spent for your campaigns. Then, calculate them. These social media costs include the platforms and tools you used, budget allocated for running ads, content creation, ongoing costs for your team, and marketing agency or consultant fees (if you have them).
2. Define your goals and objectives
Next, define your goals. As mentioned earlier, you won’t be able to measure your social media marketing ROI properly if you don’t have clear goals. So, make sure that your objectives are included on the overall strategy.
Here are some of the most common social media goals used by businesses:
- Lead generation
- Signups or sales
- Brand awareness
- Better customer experience
- Customer loyalty
- Increased social media presence
- Website traffic
3. Track the metrics
All social media metrics of KPIs can tell you something about the performance of your marketing efforts. They will indicate whether you’re meeting your goals or not. However, you must track the right metrics for your business to properly calculate your social media ROI.
Here are the metrics that you can analyze and track to measure your returns:
- Audience engagement
- Site traffic
- Leads generated
- Sign-ups and conversions
- Revenue generated
If you can’t decide which metrics to utilize, consider these factors:
- Your target audience’s next action after seeing your campaign
- Alignment of a metric with your long-term business objectives
- Capability of the metric to help you make better decisions
- Your capacity to measure the metric effectively
Once you’ve decided on what metrics to use, make sure to check them on a regular basis. When you use analytics tool, you will get automated reports sent to your email, so you don’t have to pull them yourself from the tool’s dashboard.
4. Create a report
Once you’ve gathered all the data needed from your metrics, share the results to tour team. This will help your team analyze how social media marketing affects your brand’s bottom line. To make the reports stand out, you can use a template, plain language, and KPIs to track short-term progress. It’s also a great idea to articulate limitations, be clear about what can’t be measured, and tie the results back to the aligned objectives.
If you are not measuring your social media marketing ROI, it is the best time get started. Make your reports accurate so that you can get a better picture of how effective your social media strategy is, as well as how you can tweak it for more outstanding results.