Measuring Social Media ROI: A Guide

Today, I want to talk about something super important: measuring social media return on investment (ROI). It may sound complicated, but bear with me! I’ll break it down for you.

So, why is measuring social media ROI important? Well, imagine you have a lemonade stand. You want to know if the time, money, and effort you put into your lemonade business are paying off. That’s exactly what measuring ROI is all about – figuring out if your social media efforts are worth it.

Now, let’s dive into some strategies to measure your social media ROI:

1. Track Website Visits: One way to measure your ROI is by checking how many people visit your website from your social media posts. It’s like counting how many customers visit your lemonade stand after seeing your advertisements.

2. Conversion Rates: Another important factor is tracking how many people make a purchase or take action after seeing your social media content. It’s like seeing how many people actually buy your delicious lemonade.

3. Engagement: It’s not always about the sales. You also want to measure how engaged your audience is with your content. This includes likes, shares, comments, and overall interaction. It’s like seeing how many people stop by your lemonade stand, chat with you, and recommend it to their friends.

4. Cost-Per-Click (CPC): This is all about how much money you spend to get one person to click on your social media post. It’s like knowing how much each person pays for a cup of your refreshing lemonade.

5. Customer Feedback: Don’t forget to listen to what your customers are saying! Their feedback is valuable in understanding how your social media efforts are impacting their perception of your brand. It’s like getting feedback from customers about how much they love your lemonade.

By using these strategies to measure your social media ROI, you can make informed decisions about your social media strategy. You’ll know what’s working, what’s not, and how to make your lemonade stand – I mean, your social media presence – even better.

Remember, measuring social media ROI may seem tricky at first, but with the right tools and strategies, you’ll become a pro in no time. So, go out there, keep track of your numbers, engage with your audience, and watch your social media efforts pay off!

When you talk to a marketing expert, they will probably suggest using social media for your business. But here’s something important to consider: Is social media worth the time and money you invest? In this guide, I’ll explain how to figure out and measure the return on investment (ROI) for your business’s social media efforts.

Measuring social media ROI has a few benefits. One obvious advantage is that it can help you make the most out of your budget, even if it’s tight.

But the biggest benefit is that measuring ROI can lead to better results for your business. If you want to grow, you need effective strategies, not things that waste your time and energy. There’s an old saying in management: Inspect what you expect. When it comes to your social media marketing, it’s important to track and measure what you expect to achieve. This guide will show you how.

What Does Social Media ROI Mean?

Social media ROI is all about getting a good return on your investment when you use social media for marketing. It’s like when you put money into something and want to make sure you get back even more money.

To figure out if your social media efforts are giving you a positive ROI, you can use a special formula:

(return – investment) / investment = ROI

• The return is the good things that come out of your social media activities, like making money or something else valuable.
• The investment is the money you spend on doing social media marketing.

If you want to talk about ROI as a percentage, you just have to multiply the final result by 100.

An Example of Social Media ROI

So let me give you an example to help you understand how the ROI formula works. Let’s say your company made $50,000 from social media marketing, but you had to spend $15,000 on it. To find out the ROI on social media, here’s what you do:

(50,000 – 15,000) / 15,000 x 100 = 233.33%

Here’s what that means: You started with $50,000 and then subtracted the $15,000 you spent. After that, you divided the result by the same $15,000 that you invested. If you want to express it as a percentage, you just multiply it by 100. That’s how you get the social media ROI as a percentage.

So to sum it up: By investing $15,000, you got a net return of 233.33% on that money. You ended up with more than double the amount you spent. Pretty amazing, right?

When it comes to calculating the return on investment (ROI) for social media marketing, some marketers make the mistake of solely focusing on social media ads. However, ad spend is just one part of the bigger picture. If you only measure the return on ad spend (ROAS) for platforms like Facebook, you’re missing out on the full scope of social media marketing.

Instead, it’s important to consider all your social media activities. This means looking at the investment you make in various strategies and tactics across different platforms, and then assessing the benefits you receive in return.

Here are the steps to measure the ROI of social media in a small business:

Have you ever heard the saying, If you can’t measure it, you can’t improve it? This holds true not only for traditional marketing, but also for social media marketing. The great thing about digital marketing, including social media, is that you can measure and track almost everything. However, not all metrics are equally important.

The metrics you focus on will depend on the social media platforms you use and your overall business and marketing goals. To start, you need to have a clear understanding of what you want to achieve. This will help you determine which metrics are relevant to your success.

When it comes to measuring the return on investment (ROI) of social media, it all begins with setting goals. Once you have your goals in place, you can then determine which performance metrics are most important for the social media channels you are using. From there, you can calculate the costs of software, labor, advertising, and other expenses associated with your social media efforts.

1. Start with Goals

When it comes to measuring the success of your social media marketing, the first thing you need to do is set clear goals. These goals should align with what you want to achieve in your business and marketing overall. It’s important to know why you want to be on social media and what you hope to accomplish.

• Be specific and set goals with real numbers and deadlines.
• Make sure your goals are measurable, so you can track your progress using metrics and analytics.
• Set goals that are challenging but still attainable.
• Be realistic and honest about what you can achieve.
• Tie your goals to a deadline to keep yourself accountable.
• For example, you might set a goal to generate 100 new leads from advertising sales by the end of Q4 2021.
• Or maybe you want to aim for 5,000 website visits from organic search in October 2021.

Setting Goals for Effective Social Media Marketing

Let’s talk about setting goals for your social media marketing. Setting clear goals is super important because they shape your strategy and help you measure your success. Without goals, you’ll have no idea if your efforts are actually making a difference and helping your business grow. So, let’s get started!

1. Define Your Objectives

First things first, you need to decide what you want to achieve with your social media marketing. Maybe you want to increase your brand awareness, get more website traffic, or boost your sales. Whatever it is, make sure your objectives are specific, measurable, attainable, relevant, and time-bound. These are called S.M.A.R.T. goals, and they’ll give you a clear direction to work towards.

For example, let’s say I want to achieve a 100% increase in sales from my e-commerce site between January 1 and June 30, compared to the previous year. That’s a specific and measurable goal with a clear timeframe. It will help me focus my efforts and track my progress.

2. Choose the Right Metrics

Now that you have your goals set, it’s time to decide which metrics you’ll use to measure your social media return on investment (ROI). In the digital marketing world, there are so many things you can track and measure. But to stay on track with your S.M.A.R.T. goals, you need to focus on the metrics that really matter – the ones that impact your business and align with your overall marketing objectives.

For example, if my goal is to increase sales, I’ll focus on metrics like website conversions, click-through rates, and revenue generated from social media campaigns. These metrics directly show the impact of my social media efforts on my business objectives.

Remember, setting goals and choosing the right metrics will not only shape your social media strategy but also help you measure your success. So take the time to define your objectives and pick the metrics that matter. Happy marketing!

But let me tell you, it’s not as simple as it sounds. Each social network has its own set of numbers and data for you to keep track of, and they’re all different. Take Facebook, for example. They’ve got this thing called Insights, which is like a big dashboard full of analytics. It can tell you all sorts of stuff, like how many people like your page, how many people see your posts, how many people follow your page, and a whole lot more.

And then there’s LinkedIn. They’ve got their own set of analytics too. They’ve got Update analytics, which can show you how well your posts are doing. They’ve got Followers Visitors analytics, which can help you figure out who’s following you and where they’re coming from. And they’ve even got Talent Brand analytics, which can tell you how your Career pages are doing.

And of course, we can’t forget about Twitter. They’ve got their own metrics to keep track of. They can show you things like how many followers you have, how many retweets you’re getting, how many impressions your tweets are making, and a bunch of other stuff.

So how do you figure out which metrics to pay attention to? Well, one way is to tie them to the different stages of the sales funnel, or the journey that your customers go on. You want to make sure you’re measuring the right things at each step of the way.

Wow, did you know that your brand’s social media presence can actually give you a glimpse into how aware and interested people are in your brand? It’s true! Let me break it down for you.

• Awareness

First things first, let’s talk about awareness. This is all about how many people know about your brand on social media. To measure it, we look at some cool metrics like:

• The number of followers you have. That’s like your fan club on social media!
• Reach or impressions. That’s how many peeps see your posts or content.
• Retweets. When someone shares your tweet with their followers, it’s like spreading the word!
• Shares or pins. This is when people share or save your posts. It’s like giving them a thumbs up!
• Mentions. When someone gives your brand a shoutout on social media, that’s pretty awesome!
• Interest

Now, let me introduce you to the next stage – interest. This tells us how many times people actually engage with your brand on social media. Here are the metrics we use to measure it:

• Comments. When people leave a comment on your post, it’s like starting a conversation!
• Likes. When someone likes your post, it’s like a little high five!
• Replies. This is when people respond directly to your post. It’s like having a chat!
• Favorites. When people save your tweet or post, it’s like bookmarking it for later!
• Website traffic. This shows us how many people visit your website from social media. They’re curious!
• But wait, there’s more! We can also track some other important stuff that shows how social media is impacting your business:
• Product sales from social networks. When people actually buy your product through social media, that’s pretty cool!
• Leads from downloads, subscriptions, and more. When people show interest in your brand by signing up or downloading something, that’s a win!
• Revenue generated from social media. Yup, social media can actually bring in money for your business!
• Other calls-to-action that have a business impact. This could be anything that gets people to take action, like signing up for a newsletter or attending an event.

When it comes to tracking your success and performance, it’s important to set Key Performance Indicators (KPIs). You have a lot of options to choose from when it comes to metrics, but don’t forget about KPIs. They can give you valuable insights into the effectiveness of your efforts, helping you make better-informed decisions. (Check out this article on social media KPIs for a more detailed discussion on the topic.)

Step 3: Calculate Social Media Costs

Measuring social media ROI involves more than just setting goals and deciding on performance metrics. You also need to determine the costs associated with social media. This includes the expenses for the tools you use, creating and updating content, monitoring your accounts, and any advertising you do.

To make it easier for you, we’ve created a custom social media budget calculator. It includes different categories that you can use as line items.

Cost of Social Media Tools

When it comes to managing and tracking your social media engagement, there are tools available that make it easier and more effective. These tools are designed specifically for tasks like social media management, analytics, content creation and editing, and livestreaming. Using these tools not only saves you time and effort but also allows you to get better results.

If you’re wondering about the cost, most of these tools operate on a subscription basis. You can choose to pay for them monthly or annually, depending on your preference.

Let me give you a sample list of the types of tools we’re talking about, along with their pricing:

Social Media Management

• Buffer – $15 – $99 per month
• Hootsuite – $29 – $599+ per month
• Sprout Social – $99 – $249 per month
• Zoho Social – $10 – $300 per month (billed annually)

Social Media Analytics

• Brandmentions – $99 – $499 per month
• Keyhole – $49 – $59 per month
• Mention – Free to $450+ per month

Let’s dive into the world of content creation and livestreaming tools. Below, I’ll give you a rundown of some popular options along with their respective costs. Get ready to unleash your creativity!

When it comes to content creation, there are several fantastic tools available. Adobe Creative Cloud Express is a versatile option ranging from free to $9.99 per month. Bitable offers a variety of features and comes at a cost of free to $49 per month. Canva is another excellent choice, with a range of plans from free to $30 per month (when billed annually). Powtoon is a powerful tool that will cost you between $19 and $99 per month. Lastly, Vimeo offers a range of features and pricing options, starting at free and going up to $75 per month.

Now, let’s shift gears to livestreaming. Livestream, which is owned by Vimeo, is a popular platform that will set you back $75 per month (billed annually). Restream offers a range of plans, from free to $49 per month. Streamyard is another great option, with plans starting at free and going up to $39 per month. Additionally, there’s Ecamm Live, which ranges from $15 to $25 per month. And last but not least, Switcher Studio is a feature-packed tool with plans varying from $39 to $350 per month.

So, there you have it! These are some of the top content creation and livestreaming tools along with their costs. Now, go forth and create amazing content or start your own livestreaming adventure. The choice is yours! Enjoy exploring these tools and let your creativity shine.

When it comes to making videos, writing blog posts, taking photos, designing graphics, or creating any other content to share on social media, there are two costs to consider: the cost of the tools you need and the cost of actually making and editing the content. The second cost is what I want to focus on here.

The amount you need to spend on creating content can vary widely, depending on who you hire and where you find them. You can choose to work with an agency or a freelancer, and there are websites like Upwork, Fiverr, 99designs, Crowd Content, and Freelancer where you can find talented people at affordable prices. However, even within these websites, the pricing can vary a lot.

How much do I need to spend on updating and monitoring social media?

Now let’s talk about the money it takes to stay active on social media. I’m talking about all the time and effort it takes to plan and post updates, interact with people, and keep track of how things are going. If you hire a company or freelancers to help you with this, include those costs here. Don’t forget to add in any money you pay to influencers who help spread the word about your messages.

Costs for Staff Members

This part is all about the people on your team who handle social media. You might have some employees who only focus on it, or maybe they juggle it along with other tasks. Either way, you want to include the money you spend on salaries, benefits, and everything else for the time they put into social media. And don’t forget to count the value of your own time too!

Costs for Paid Ads

The cost of paid social ads is something else to consider when determining your social media ROI. Most social networks offer pay-per-click advertising, where you can bid on how much you want to pay for each click. So if you’re running Facebook ads for your small business (or advertising on any other social network), don’t forget to include the money you spent on Facebook ad campaigns and boosting your social posts. But remember, only include the expenses related to social media, not those for Google or Bing ads.

4. See how well your social media is doing

In addition to measuring the return on investment for your social media marketing, it’s important to also analyze how well your social media campaigns and engagement efforts are performing. Along with the built-in analytics tools on Facebook Pages, LinkedIn Company Pages, and Twitter accounts, there are plenty of other tools available to help you with this. We’ve already mentioned a few.

Just like Hootsuite, I can use it to analyze how well I’m doing on all of my social networks. It helps me create custom reports to show the impact of my brand. Hootsuite even has a special tool called Impact just for this purpose. It helps me understand how my social media channels and campaigns are driving leads, conversions, and sales. Pretty cool, right?

Zoho Social is another great tool that gives me detailed metrics about my social media performance. It covers things like my audience, posts, engagement, and reach. The best part is that it puts all of this information in one easy-to-read dashboard. Plus, I can output reports to see exactly how well I’m doing on social media.

Now, let’s talk about Google Analytics. It’s like the foundation of all measurement tools. Best of all, it’s free! I can use it to measure important things like how many people are visiting my website from social media or how much money I’m making from products sold through social media. It’s definitely a must-have tool for anyone serious about tracking their social media success.

Step 5: Figure Out Your Social Media Success

Okay, everything is set up: we’ve got our S.M.A.R.T. goals, KPIs based on the customer journey, the cost calculator, and social media performance tools. Now it’s time to calculate our social media marketing ROI.

Let me show you a few examples to get you motivated.

One guy named Shep Hyken, who knows a thing or two about customer service, wrote for Forbes that companies using Twitter as a customer service channel saw a 19% increase in customer satisfaction. Oh, and get this – it only costs about $1 to respond to a customer on Twitter, whereas it costs a whopping $6 to handle it through the old-school call center.

Here’s another story for you. Vamplets, a small business that creates baby vampire dolls (yeah, they’re a thing), decided to use Facebook ads to boost their sales. Can you guess what happened? With just $250 spent on ads, they made an extra $1,000 in revenue – and they can directly track that back to their Facebook ads. That means they got a sweet 300% return on their investment.

I, IBM, had a brilliant idea to boost my sales by using social media. So, I decided to train my sales team to build relationships with potential customers online and drive them to visit our team members’ websites. And guess what? This focus on social sales actually led to a whopping 400% increase in our sales!

More Tips on Measuring ROI

Now, let me share some extra tips to help you measure your own social media success.

When it comes to social media marketing, approach it just like you would with traditional online marketing. Start by thinking about your goals and what you want to achieve. Then, figure out which social media platforms would work best for you and decide on key performance indicators (KPIs) that would be relevant for those goals.

To maximize your results, make sure to schedule your social media posts consistently. This way, you can maintain a steady presence and get better outcomes. You can use this handy social media calendar template to help you stay organized.

Let’s analyze your use of social media compared to your competitors. Find out what tools they use, how often they post, how many followers they have, and how engaged their audience is.

Every week or month, create a report to measure your success in achieving goals and your conversion rate. Based on the results, make any necessary changes.

Gone are the days of relying on intuition for social media marketing. It is still marketing and, as such, should be analyzed using statistics. As a business owner, you need to know if social media is providing a positive return on investment. Use this guide to start tracking the success of your social media campaigns.