When I started reading up about social ROI, I found it so confusing, I wondered how other business owners were managing to understand it. I’ll be the first to admit I don’t do great with numbers or formulae. But in the process of creating their guides on ROI for social media, I found that most experts had substituted simplicity and comprehension for thoroughness and over-complication. That was when I decided to make sense of this topic for you and I. In this article, I simplify the steps to measuring your social media ROI.
As Lewis Carroll (and later, George Harrison) so famously stated, “If you don’t know where you’re going, any road will take you there.” If you’re running a social media campaign without taking the time to use an analytics tool to assess if you’re getting the results you want to achieve, then you really don’t know where you’re going.
Social ROI matters because it tells you where you are, where you want to go and where you should be heading if you want your marketing campaign to work. Otherwise, you might as well be chucking all that time, effort and money down a very deep well.
If your business has been trying to make sense of calculating the ROI of social media marketing, here’s where you should start.
The first step towards calculating the ROI of social media marketing is to decide where you want to go AKA, what are your goals and business objectives?
What do you want to ultimately achieve through your social media campaign? For instance, you can choose to focus on one or more of the following goals:
The social media campaign that you decide to run will ultimately depend on your goals. For example, if you decide to go after leads, you will have to create a lead magnet – an incentive for which your prospects will share their email address or phone number with you. If you go down this route, you may wish to invest in doing some primary research and use the insights you find as gated lead gen content. Or, you may choose to run a Twitter card campaign or a Facebook ad campaign to generate leads from these two channels immediately, while creating a blog as a long-term campaign to generate leads from organic traffic.
If you decide to go after sales on your ecommerce website, Facebook carousel ads might be the best option for short-term sales and app downloads a more long term plan to deliver content right to the buyer’s mobile devices.
You need to customize your social media campaign and creatives depending on what results you ultimately want to achieve, as well as how you're going to measure them. You also need to decide which channel you want to run a campaign on based on your audience demographics. Your marketing teams can easily source this information from a social media analytics solution.
Once you understand where your audience is hanging out, you can narrow the type of content you need to be creating based on unique social media channels characteristics. For instance, images will do best on Instagram, Facebook and Pinterest. If your demographic is largely a B2B audience that is active on LinkedIn and Slideshare, you will have to rethink your creatives and campaign.
The wonderful thing about online marketing is that you can measure most everything. From the content that works best on social media to the path your visitors’ take through your website, to the signups, leads, sales and follow-up, everything can be monitored, measured and customized to optimize the customer experience.
If you’re using a CRM like Hubspot’s Inbound Marketing Software, you can customize and track your entire visitor experience. By measuring 'moments that matter' touch points along their customer journey, you may spot a common pattern where prospects fall off or convert. Armed with this insight, you can create campaigns and track which ones are working and which aren’t so that you can put your time, effort and money into the social media campaigns that are getting the results you want.
No more do you have to wander blindly around the social media landscape, trying to figure out which posts are working best, or use the “Post and Pray” method of sharing content.
A good marketing CRM will have the option of using APIs to connect your social media analytics tool with your internal CRM data. That way, you can understand key social metrics such as how many clicks and conversions a certain post is getting you so you can tweak your copy and creatives. We'd advise you to get familiar with tools like Google Analytics, Facebook conversion tracking and strategies like A/B testing to refine your social media campaign further through measuring and optimisation.
What does social media return on investment (ROI) mean to you? Calculating ROI is ultimately about measuring the cost of a lead or sale and deciding if your marketing expenses were worth it. Only you can decide whether the ROI in social media campaigns was worth it to you.
There are a lot of social media tools, methodologies and complicated formulae to calculate social media ROI, but the only one that actually makes sense is to ask yourself whether it was it was worth spending $5 on a Facebook ad to gain a lead that went on to convert to hundreds of dollars worth of sales on your website.
It’s up to you, as the business owner, to decide what social media marketing campaigns make sense to spend on and what you can pass on. When measuring ROI, don’t forget to factor in the cost of your social media marketing agency or, if you’re doing it in-house, the salaries, time, expense and effort it takes to go from point A to point B.
Once you have calculated your social media marketing ROI, it’s time to analyse your results, assess if they are taking you where you want to go and tweak and fine-tune your campaigns to take you on a trajectory to social media success. It's a good idea to benchmark your results against a different period, usually brands do this on a quarterly basis. This helps them see where they've moved the needle with their social media efforts. You can do this for your competitors too, if you decide to benchmark against your competitors, social media share of voice is a key social metric to use.
This article was written by Priya Florence Shah from Business2Community and was legally licensed through the NewsCred publisher network.