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How to measure your social media marketing ROI?

How to measure your social media marketing ROI?

Determining your social media ROI is crucial for understanding the impact of your social media strategy. 

Social media marketing has matured to a point where measuring its ROI is a critical component of any marketing team’s day-to-day agenda.

In 2022, more than 50% of marketers are planning to increase their investment in social media marketing, highlighting just how valuable it is for businesses. 

Your time, effort, and money in social media marketing should be able to generate more revenue, sales, and growth for your brand. 

To track your progress you or your marketing team need to calculate the return on your investment.

What is social media marketing ROI?

The social media marketing environment is becoming increasingly competitive. 

Whereas a basic social media presence was simply a box for brands to check in the past, today, the way brands leverage social media can profoundly impact the overall success of their business. 

As companies are vying for audiences’ attention, you need to pour more and more budget into your campaigns in order to stand out. 

A bigger spend, in turn, often requires proof that it’s delivering tangible results – and this is where measuring social media ROI comes in. 

Social media marketing ROI is the return on investment that a business sees from social media marketing efforts.

This can be in the form of increased sales, leads, or web traffic. Measuring social media marketing ROI can be tricky, but it’s important to track in order to determine whether or not your efforts are worth it. 

What is the importance of measuring your social media ROI?

As a business owner, you know that social media is a valuable tool for promoting your brand and connecting with your customers. 

But what you may not know is that you can also use social media to measure your return on investment (ROI).

Measuring your social media ROI can be a bit tricky, but it’s important to do because it can help you understand what’s working and what’s not working with your social media strategy. 

By taking the time to measure your social media ROI, you can make sure you’re getting the most out of your social media efforts – and make necessary changes to improve your results.

Provable return on investment (ROI) has become the holy grail of the social media marketing world. 

Measuring social media ROI (return on investment) is a critical part of any social media manager’s job. 

It allows you to better understand the effectiveness of your work, demonstrates value to the organization, and refine your strategy over time to improve returns as you learn. 

Social media ROI is what you get back from all the time, effort, and resources you commit to social. And it’s best calculated with dollar amounts. 

How you should measure ROI?

One of the first steps to measuring your ROI for your social media campaign would be to identify the objective of your marketing on social media. 

Measuring the ROI of paid social media efforts may be more of an exact science compared to organic campaigns. 

However, it’s important to be able to quantify the value of your brand’s presence on social channels for any type of campaign. 

If your social media paid campaign goal is to increase your brand’s influence and awareness, you could measure ROI using your published posts’ impressions or the growth in the number of people that follow your brand. 

According to eMarketer, 36% of content executives use engagement to measure their content performance.

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Source: eMarketer

For this reason, you should design your social media ROI based on your business’s primary objectives on social networks.

A high number of converting users is evidence that your messaging is relevant and compelling, which shows that quality content plays a big role in earning social media revenue. 

Prove that your social media marketing strategies are effective and are driving the intended results. 

How to determine Social Media ROI for your business?

The money you have earned from your social media marketing efforts Demonstrate the value of your social media marketing efforts to your brand. 

But that’s not all. Measuring social media ROI can also help you determine how much value you’re delivering to your audience.

The metrics you choose to monitor and compare depend on your company’s goals, and you may decide that you still want to focus on generating conversions. 

But in most cases, measuring the ROI of social media marketing is best done in a way that accounts for the channel’s place in your overall strategy. 

It can be a daunting task to quantify the ROI of your social media marketing efforts, especially when it comes to organic social media since your overall strategy and content output aren’t tied directly to specific CTAs or attribution links.

 Even when it comes to paid social, outside of D2C (direct-to-customer) and e-commerce, it can be difficult to measure how much value your paid ads are returning. 

Effective social media measurement should start by turning the traditional ROI approach on its head.

That is, instead of emphasizing their own marketing investments and calculating the returns in terms of customer response, managers should begin by considering consumer motivations to use social media and then measure the social media investments customers make as they engage with the marketers’ brands. 

For example, if the goal of a paid campaign on social is to increase brand awareness and influence, ROI could be measured by growth in follower count or post-impressions. 

Obviously, not every action on social media will have a direct impact on revenue. Yet, even in such situations, we still must find a way to measure ROI. 

For this reason, we use a method that more effectively captures the nuances of social media marketing. 

How to calculate the Return on Investment (ROI) of a marketing campaign? 

The money you have earned from your social media marketing efforts. It’s easy to use this formula to calculate ROI for social media campaigns and initiatives that can be easily attributed to revenue (for example, paid ads for e-commerce products). 

There are many ways to calculate marketing return on investment but the most common one is very simple.

Sales – Marketing Spending / Marketing Spending

You can also use tools like Social ROI Calculator to calculate returns and get your questions answered easily.

Although, things get more complicated when dealing with the investments in social media that bring in less tangible value. 

For instance, if your social media paid campaign goal is to increase your brand’s influence and awareness, you could measure ROI using your published posts’ impressions or the growth in the number of people that follow your brand.

For this reason, you should design your social media ROI based on your business’s primary objectives on social networks. 

When measuring ROI with social media, it’s helpful to take into account how you measure other advertising channels and incorporate familiar business phrasing. 

If you use PPC advertising, try assessing social media in terms of cost-per-click or cost-per-impression. If you focus on lead gen, try measuring in terms of cost per acquisition, etc. 

This adds credibility to your efforts and makes it easier to compare social media marketing with other forms of online marketing. 

In order to get a more realistic picture of how well your social media marketing strategy is performing, compare your investment to the reach, engagement, and website clicks it produces. 

Where it is challenging to attribute social media efforts directly to revenue, you can quantify ROI using non-monetary metrics like the number of subscriptions, increase in follower count, etc. 

Always attribute a monetary value to your efforts on social media to understand your investment’s value objectively. 

Conclusion

Demonstrate the value of your social media marketing efforts to your brand. Social media investments and returns can’t simply be expressed in dollar terms, but there’s still a way to calculate your social ROI roughly. 

Keep in mind that to get a clear picture of your ROI, you must base your metrics on your business goals, then evaluate them against costs. 

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