What is social media ROI?
Return on investment (ROI) as it relates to your social media efforts is a measurement of its efficiency.
Why is it important?
To put it simply, tracking progress and performance is key. How else would you know how your efforts are affecting business and performance levels? How do you prove value? Promoting your services and products on social media requires time, resources and money. Whether you’re focusing on a completely organic social media approach, social advertising or both, you’re fueling it with resources and it’s worth knowing the value that you put in.
It will vary from business to business depending on objectives and goals. It might be measured in dollars, or perhaps the number of leads accumulated. Ultimately, the definition of social media ROI will align with the value social media has on your business.
By measuring your social media ROI, you can:
- Improve marketing efforts
- Monitor the effects of your changes
Taking the steps to a successful ROI
Before you can measure your social media ROI, it’s crucial to nail down some important components that will help you prove the value of your social marketing efforts.
Define your goals
Define what your social channels will do for the business. Do you aim to convert more customers? Increase brand awareness? Bring in more leads? Your social media goals should align directly with your existing business goals.
Those aiming to increase brand awareness, for example, might focus on gaining followers or impressions. Tying social media to revenue, however, might depend on increasing conversions or purchases.
Choose metrics that matter
In order to understand if you’re achieving your goals, you’ll need to track metrics to prove it. Some might think it’s important to track follows or engagement metrics. While these are important, these types of metrics won’t always align with your goals. They look great and prove that your audience is active with your brand, but you’ll need to make sure that the metrics you track directly tie to what you want to accomplish. This often includes number of leads generated, website traffic, conversions and revenue.
RELATED ARTICLE The best social media advertising metrics for each business goal An essential guide to the numbers you have to watch carefully according to each business goal. READ MORE
Measuring your ROI
Now that we’ve covered the basis of what social media ROI is and what goes into your social strategy, how do you measure your return? Like every skilled marketer, you need proper tools. There are plenty of options that provide sufficient data to analyze, set up funnels and track actions and conversions.
These options include:
Google Analytics: If you need to track everything from conversion rate to where your audience is coming from, Google Analytics is that tool. You can determine which social channels bring in more leads or traffic source performs best. Google Analytics provides powerful insights to track how your website data relates back to your social media.
Facebook Pixel: With the Facebook Pixel, you can easily calculate your ROI with Facebook ads. You will need to integrate the pixel with your website to monitor traffic patterns and conversions as they come from Facebook.
Management tools: There are several robust social media management tools that can help you save time and offer measurable insights all in one central platform. For example, Sprout Social incorporates a wide range of networks into its one platform and generates powerful analytics to not only measure ROI, but also offer insight into your social network audience.
Native insights: Don’t overlook native insights. You can obtain analytics directly from social media platforms. It’s easy to tie dollars to performance as you advertise directly inside a platform and have the ability to track click-throughs, impressions and engagement.
Getting the most out of your return
Once you measure your return on investment, don’t stop there. It isn’t enough to calculate and not make the necessary adjustments based on your findings. The best advice: continue to learn about your social media advertising efforts and make improvements. Your ROI will help you understand what areas you can improve on.