Finding out the return on investment or ROI as it is more commonly known on your marketing campaigns is vital.
This is true in any part of marketing. If you don’t know how much money you are spending and where you are spending it you aren’t going to know what is working and what isn’t. It is important to discover the right balance in your marketing strategies as to where your money goes to.
In this article, we’re going to learn about social media and ROI. Specifically, we’ll have a look at:
● What metrics are used for calculating social media ROI
● What tools can be used to make it easier
● Methods to improve your social media ROI
Before we get into all that, let’s look at what ROI actually is.
What is ROI (return on investment)?
This is fairly straightforward to define.
Your return on investment is a metric that is used to find out how much money you made or lost based on how much money you invested in the first place. When it comes to marketing and social media advertising it relates to how much money you have spent on advertising against how much money you make from the campaign.
Let’s look at a basic example. If you invested (spent) $100 on your marketing campaign and you made $1000 in sales as a result of that campaign, your ROI will be 900%.
Social media ROI metrics
There are several metrics that you can use when it comes to finding out how well your social media campaigns are performing and this then feeds into your ROI.
For most people the most important metric is how many conversions you get however we can put them into three stages – early, middle and late.
Early-stage metrics relate to maximizing your engagement and you can measure how many follows, likes etc. that you have received compared to the money spent. Middle stage metrics can be calculated on cost-per-click (CPC) and click-through-rate (CTR) level and is to do with learning about your audience.
What is the last step of measuring social media ROI?
Finally, the last step of your social media metrics is encouraging your audience to buy which is related to your conversions – this is how you make money.
This is usually sales and it is generally the metric you use to calculate your ROI – how much money you make selling products and services compared to how much money you spent on your social media advertising. That being said, it can include things like app downloads and installs too.
Can tools make this easier?
Like anything in marketing, you can find various tools which will help to make the process easier.
Facebook Ads with Facebook Pixel – Putting Facebook Pixel on your site means that you will be able to track visitors who have come with this social network. You can view their activity on their site as well as what ads you run have led to a conversion.
Sprout Social – this tool can help you to manage your social media performance by showing you key metrics across a variety of platforms. It helps you to see what posts have performed the based, your impression and engagement rate as well as a ton of other great data.
Google Analytics with UTM parameters – With UTM tracking in Google Analytics you can see how your social media campaigns have led to conversions and it is a really handy way of tracking individual campaigns.
Methods to improve your ROI
There are several methods you can use which will help you to improve your return on investment when it comes to your social media campaigns.
Creating better and more engaging content is a good starting point and there are social lead generation tools as well which will scan posts that may turn into leads.
You should always be aiming to improve your ROI because even if it is healthy now, it can always get better.
Social media and your ROI
Tracking your social media campaigns is important otherwise you won’t know how much money you are spending, where it is going and how effective it is.
This last point is vital. It isn’t just about how much money you spend rather it is how you spend it and what impact it has.
Your return of investment is something you need to keep track of and if you take the right steps to ensure that you evaluate your social media metrics you can implement strategies to not only improve your ROI but also your whole presence on social media as well.