What is Social Media Marketing ROI?
Effective marketing costs money and takes time, social media marketing is no exception. If social media marketing doesn’t bring a return on investment (ROI), it’s just not worth it. So how do you know what your Social Media Marketing ROI is?
Does social media work or is it only profitable for huge corporations with deep pockets?
What should your social media agency be doing to measure success?
Let’s talk about it…
Why Social Media Marketing ROI Is Hard to Measure
To measure any kind of growth, first you must make some decisions. What unit will you use to measure? Which tools are available? What is your starting point? How frequently will you measure? When will you stop?
Surprisingly, many companies invest in social media marketing with no plan for what they’re trying to achieve. There’s no goal, therefore no yardstick. They do their posting in-house or hire a social media agency with little experience. They soon conclude that social media in Tyler doesn’t work, even if it was done wrong.
Another reason there are conflicting results about social media marketing ROI of social media management is businesses and marketers use different metrics to gauge success.
Some value engagement metrics like comments and retweets. Others use metrics like site traffic and revenue. It’s tough to say what’s normal since there are so many different industries and statistics from those who are doing the measuring.
Finally, some businesses doubt social media marketing creates income because they’re impatient and lack discipline. It takes time to see the results of digital marketing, especially social media, it also takes careful data tracking and continuous strategy tweaks.
A social media agency who promises you overnight success is either inexperienced or lying to get your business.
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The Solution – Be SMART
At Spade Design, we never take on a client or brand without a plan for developing goals. We measure social media management success, digital campaigns and website performance using the acronym SMART.
- Specific – With social media marketing, it’s not enough to say you want more people to know about your brand. A specific goal might be setting a numeric target for your follower’s count.
- Measurable – Social media management allows you to track data over time using a variety of tools. Most platforms come with analytics so you can measure from the beginning, then check growth at regular intervals.
- Achievable – You want goals to be challenging enough you reach your full potential, but not unreasonable. Work with a social media agency that has experience with businesses like your own to set your target in the right place.
- Relevant – Do your goals tie back to business objectives?
- Time Limited – Social media marketing requires an ongoing effort, but evaluate your strategy and success rate at regularly scheduled intervals. Set a specific date by which you intend to reach your goals.
If you’d like to learn more about SMART Goals, read our article How to Use SMART Goals to Improve Your Marketing.
More on Evaluate Your Social Media Management ROI
Measuring Social Media Marketing ROI allows you to prove revenue.
That growth helps gain stakeholder buy-in. It’s a numbers game, but you have to be looking at the right numbers.
Over time, monitoring also reveals weaknesses and strengths. You can’t improve what you don’t measure. This allows you to do more of what is working and pivot your strategy when something isn’t helping you meet your goal.
Often, measurements provide you with an “aha” moment where you suddenly realize you need to redirect, maybe even reinvent. If you don’t measure, you could continue blindly on a path of diminishing success.
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Goals Determine Social Media Marketing ROI
Part of setting SMART goals is being specific about what consumer actions you should see from your social media management. Actions can be evaluated in a couple of ways.
A conversion goal measures what users do individually. They might count distinct actions like completing a checkout, signing up for a newsletter, or just clicking a button.
Aggregate goals take data from users and provide an average. Time on a page and average views are a few examples.
Your ultimate conversion goal is the top overall objective for your site. It’s usually one of your aggregate goals like completed purchases.
Metrics for Measuring Social Media in Tyler
There’s good news and there’s bad news. A social media marketing strategy takes at least six months and it could take as much as two years to actually see the Social Media Marketing ROI.
However, when you set short and long-term goals, you’ll see some of your efforts cause the needle to move earlier.
For example, it’s possible to boost brand awareness from day one. Gather data from your starting point, then prepare to start making steady progress.
Your social media agency can help you gather data on the following:
- Brand awareness – Track your followers count and how many people your social media marketing posts reach. Break it down by day, week, or month. Monitor shares, mentions and retweets. Each platform has its own analytics, and third-party platforms help you put it all together. Be specific here. Do you want your brand in front of social media Tyler or a more focused group?
- Site traffic – One of the main goals of your social media marketing is to draw users to your website where you can turn them into customers. Gather data on how many visitors travel to your site from social media and what percentage that is of overall traffic. Evaluate bounce rates from social media Tyler traffic. If your posts are correctly targeted and your site is engaging, they’ll be low.
- Lead generation – If your site gets business through capturing contact information, leads may be the most important indication of social media management success. Count form completions and clicks to your contact page.
- Engagement – People who interact with a brand are more loyal. They’re more likely to buy and more willing to make a word of mouth recommendation. They indicate engagement through shares, likes, comments and mentions. Your replies give engagement a powerful boost.
- Revenue growth – Track how many people sign up for your service, buy a product or request to speak to a salesperson. It’s also possible to calculate a dollar value for other conversions.
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Assigning Dollar Amounts to Revenue
It’s easier to measure your social media marketing ROI when you assign each key performance indicator (KPI) a dollar amount. Most brands calculate the value using the following options:
- Lifetime value measures how much an average customer spends over time.
- Lifetime value multiplied by conversion rates makes calculations per visitor based on your conversion percentage.
- Average spending calculates how much revenue you receive from purchases due to social media Tyler traffic.
- A pay per click (PPC) valuation compares organic actions to what you would have to pay using ads to get the same results. For example, if you invest in content creation, what would ads have cost to get the same level of user engagement or repeat website traffic?
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How Much Are You Spending?
As you start to see data on how social media management does indeed create revenue, one way to calculate your return involves this equation.
ROI% = (Net profit/marketing expense) x 100
If you’re executing social media marketing in-house, you will have some expense when it comes to technology for posting and monitoring. Also, evaluate the value of your time and what you pay staff for attending training. It will take time to learn how to use social media monitoring tools. Figuring out what works may be a long process filled with trial and error. Add to that your social media budget including all ad costs and what you invest in content creation.
If you use an experienced social media agency, your technology cost and time investment will be less. They have experience with social media so they go straight to what works.
They may also help with content creation, reducing your time and expense. Typically hiring an expert produces a higher return in a shorter period of time. A social media agency can also help you avoid costly social media management mistakes.
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Tools For Making Sense of the Data
If you feel overwhelmed by everything there is with learning your social media marketing ROI, know there are tools to help you turn all those numbers into usable insights. These tools are specific to each social media channel.
- Facebook Insights – This tool breaks down likes into organic, paid and unlikes. See data on your reach, impressions, fan demographics and more. If you post video, Facebook Insights will show you how long users watched and provide other engagement metrics.
- Instagram Insights – Businesses recently received access to additional tools that track user age, gender and geographic location. View your top performing posts, their reach and how many users engaged.
- Twitter Analytics – From this dashboard, measure tweet activity and find out what your followers are interested in. If you represent content with Twitter Cards, track associated clicks, retweets and installs.
- Google Analytics – This tool helps you evaluate social media marketing across all channels. Compare people clicking through to your site from search engines to social traffic. You can also see who came from other websites and through your email campaign. In addition, view numbers for who typed your web address directly into their browser. Google Analytics helps tie revenue to specific social media marketing posts. Use it to track basically everything you do online.
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No matter what tools you use to gather data, make sense of it by connecting each number back to your goals. Your social media agency will likely use monitoring tools to create a visual representation of social media management’s impact over time.
To wrap it up, improve your social media marketing ROI by setting SMART goals. Identify specific actions that indicate success and evaluate how much revenue you can tie to each one. Calculate your expense and work with a social media agency who knows how to maximize your return.
Spade Design specializes in thinking outside the box to turn social media into a powerful tool that drives revenue to your business. We don’t just offer our clients success, we use data to prove how social media management brings in profit. Start working with one of our experts today.