Ever wondered why you see so many promotions and ads on social media platforms? It’s because digital marketing and social media are inseparable. Savvy marketers today, recognize the unmatched power of social media in targeted advertising and reaching a massive audience quickly. Social media platforms are ideal to boost the visibility of your brand and to drive conversions. This is why it’s one of the most effective means to achieve your marketing goals in a shorter span of time. And this is also why measuring social media ROI is crucial.
More About Measuring Social Media ROI
For a more detailed understanding of measuring social media ROI, let’s answer some rudimentary questions:
What is social media ROI?
This term refers to measuring how effective your social media marketing efforts have been in terms of bringing returns on your investment in these efforts. Shares and likes alone are not necessarily good indicators of how much your social media marketing is paying off. You need to focus on the actual impact of these efforts on your business goals using measurable metrics.
Why measure social media ROI?
Measuring social media ROI is crucial for at least 3 reasons:
- It’s the only way to demonstrate the value of your social media marketing efforts and spends, and to prove to decision-makers and stakeholders that these efforts are bringing in the desired outcomes and revenue.
- Measuring ROI from social media gives you the unparalleled opportunity to identify which channels and campaigns work best for your business goals. This enables you to optimize your campaigns and improve reach.
- Optimal resource allocation is a key ingredient for business success. Based on the metrics derived from measuring social media ROI, you can strategically allocate the budget and other resources for your social media campaigns and drive best outcomes.
How to measure social media ROI?
Measuring social media ROI involves a series of steps:
- Understand what the term means and why this measurement is important.
- Calculate social media ROI using the formula below:
- ROI%= (Value Generated from Social Media- Cost of Social Media Marketing)/Cost of Social Media Marketing x 100
- Align metrics with the objectives of your business. Choose the relevant metrics and track them. The key metrics to track are audience growth rate, engagement rates, social media impressions, post link clicks, and conversion rate. Some other valuable metrics include follower count, referral traffic, lead generation, sales/revenue generation, customer acquisition cost, content sharing, referral traffic, cost per click, and click through rate (CTR).
- Pick the right tools to track your social media metrics and calculate social media ROI effectively. Google Anaytics, HubSpot, and HootSuite are some of the most popular and effective tools to streamline the process of tracking social media metrics and turning them into actionable insights. This promotes data-driven decisions and improves social media performance.
How often should you measure social media ROI?
Monthly assessments help gain a broad overview of how your performance on social media has been. However, during active campaigns, weekly or even daily checks can help gain valuable insights.
How to improve social media ROI?
Based on the findings from the key social media metrics, you can refine your marketing strategy, target your audience more accurately, and optimize resource allocation and ad spends. Doing this consistently will yield the best results.
How does social media ROI impact business growth?
- By accurately measuring ROI from social media, you can make more informed decisions, ensure that resources are allocated in areas where they are likely to generate the best returns.
- Measuring social media ROI gives you a comprehensive understanding of the best ways to engage your audience, foster better interaction, and create brand loyalty.
- By identifying high ROI channels, it allows you to focus on the right areas, helps you drive conversions and improves profitability.
Remember, measuring Social Media ROI is not just a choice. It’s a prerequisite for sustained growth and profitability. From proving the value of social media efforts, to optimizing strategies for maximum impact, ROI measurement is a powerful tool that can quickly elevate your social media marketing game.