The best digital marketers always measure the results of their campaigns. This is how you know if you should continue your strategy or adjust. Digital marketers need to be able to track and calculate their social media ROI (Return on Investment).
Social media should be able to drive brand awareness and generate revenue. It should be able to bring in qualified leads and translate these into sales. With social commerce on the rise, social media is a very powerful part of a winning digital marketing strategy. How do you know if your strategy is winning or sinking? By measuring social media ROI.
What is Social Media ROI?
ROI stands for return on investment. This is a concept that pops up a lot for almost every business. Social Media ROI is the return on investment from value of your social media activities. It’s a measure of all social media activities divided by the investment made to achieve them. Your social media ROI is a useful tool to check the tangible return that your business gained from all the time, money and resources you invested.
It is computed by:
(value achieved – investment made) / investment made X 100 = social media ROI
As long as your social media ROI is more than 0, your investments are earning your business money. If your social media ROI is negative, it means that you lost money on your social media activities.
Measuring your social media ROI is critical to fine tune your digital marketing strategy.
How Do You Calculate Social Media ROI?
Exactly how you calculate social media ROI looks different for everyone. It depends on your company’s objectives and metrics (new followers, click-through rates, conversions, completed lead generation forms, downloaded files) that matter to the team.
Our formula to compute for social media ROI uses value as the starting point, but there are a number of metrics you could choose from. Some of the most common and valuable metrics to measure are engagement, reach, leads and conversions.
Engagement, which includes clicks, likes, shares and mentions, on social media shows the level on which the audience interacts with your brand. This is trusted as the performance indicator of choice of one third of digital marketers.
Reach, on the other hand, refers to the size of the audience who sees you on social media. It measures how far your content travels, tracking how many people saw your post and where. It’s harder to measure than engagement but is also a very important figure to take note of as a digital marketer.
The next metric to look at is lead generation. The number of leads generated is a direct measure of the success of a social media campaign. Tracking leads is all about measuring which channels and content provide leads and quantifying the number of leads generated. This allows you to track ROI in terms of the cost it takes to acquire new customers.
Finally, you can measure conversions. It’s important to know the level of conversions driven by your social media content. The best way to do this is to track clicks by campaign and platform using UTM parameters on links.
Understanding and communicating social media ROI helps you expand your strategy and grow your budget.
How Do You Track ROI on Social Media?
After choosing your goal for social media, it’s time to set a system in place to track and evaluate. There are various tools online that allow you to do this yourself.
Google Analytics allows you to set a goal and track events. Platforms such as Buffer and Ahrefs let you track likes, shares and brand mentions. There are various in-depth guides online on how you can set this up.
If you don’t want to go through the trouble of measuring these metrics by yourself, consider hiring a Digital Marketing team to help you out. One excellent team to consider is ClinkIT Digital Marketing Services.
As more and more people turn to social media to discover products, read reviews and recommendations, and shop without leaving the platform – understanding and measuring social media ROI is an absolute must.
This ensures that your time, energy and resources are focused on strategies that provide more value than you spend, making up for a solid digital marketing plan.
These tips are just a small part of what it takes to create a winning social media strategy. An optimized digital marketing strategy will encompass all relevant marketing channels and online platforms to ensure your content reaches the right audience, at the right place, at the right time.
Don’t get left behind. ClinkIT Digital Marketing Services will help systematically optimize your digital marketing strategies and drive more revenue for your business. Learn more about our Digital Marketing Services and request a FREE CONSULTATION today.