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In today’s social media-obsessed society, you likely already recognize the importance of a social media presence for your business. However, ensuring that social media outreach equals quantifiable results in the form of an ROI is another story altogether. You might assume, your social media efforts are working if you get a response, but it’s not that simple. That alone does not define or exemplify a good ROI. Read on to learn more:
What is a Social Media ROI?
Before determining what it means to achieve a good social media ROI, we first need to properly define what social media ROI even means. As you likely know, ROI stands for return on investment. In terms of social media effectiveness by garnering a good ROI, you need to consider objectives like customer satisfaction, revenue, brand awareness, brand loyalty, etc.
In other words, enjoying a healthy social media ROI doesn’t just mean getting a response from customers. In fact, response doesn't necessarily equal results with social media marketing. Response is an indicator that you are moving in the right direction...but you can't take response to the bank. Instead, you should take extra care to ensure your social media campaigns are generating increased revenue because of your efforts. Your social media can and should generate real and measurable ROI.
If you aren’t sure whether your social media campaign is earning revenue, you are not alone. In fact, some 46% of B2B marketers say they aren’t sure their social media efforts are working to generate revenue.
How to Measure Your Social Media ROI
The following are some common indicators that show you your social media campaign is yielding a positive ROI:
- An increased engagement and reach.
- Increase in purchases.
- More sign-ups for events, webinars, emails, etc.
- A greater amount of product trials or downloads.
- A notable increase in visit-to-lead conversion rate.
- An uptick in web traffic.
- Improved campaign results.
Look For Key Performance Indicators (KPI)
While the indications listed above give you a good idea if your social media efforts are working, establishing proper KPIs helps you further test the success of any particular activity or effort. Consider the following KPI examples that showcase ten key performance indicators and more accurately measure your social media performance:
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Reach: Measure the total number of people who have seen your social media content. This can include metrics like impressions, views, or followers.
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Engagement: Track the level of engagement your campaign generates, such as likes, comments, shares, retweets, or mentions. This shows how well your content resonates with your audience.
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Click-through Rate (CTR): Measure the percentage of users who clicked on a link in your social media post or ad, leading them to your website or a specific landing page. It indicates the effectiveness of your call-to-action and the interest generated.
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Conversion Rate: Track the percentage of users who took a desired action on your website, such as making a purchase, signing up for a newsletter, or filling out a form. This directly measures the impact of your social media campaign on driving conversions.
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Cost Per Conversion: Calculate the average cost incurred to achieve a single conversion. This helps determine the cost-effectiveness of your campaign and allows you to compare it with other marketing channels.
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Return on Ad Spend (ROAS): If you're running paid social media advertising, calculate the revenue generated from the campaign and divide it by the ad spend. It provides a clear measure of the profitability of your advertising efforts.
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Brand Mentions or Sentiment: Monitor the number of times your brand is mentioned on social media and analyze the sentiment behind those mentions (positive, negative, or neutral). This helps gauge brand awareness and reputation.
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Customer Lifetime Value (CLTV): If your campaign aims to acquire new customers, track the CLTV to assess the long-term value generated from those acquired through social media. This metric takes into account the revenue generated over the customer's entire relationship with your brand.
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Social Media Referral Traffic: Analyze the amount of traffic driven to your website from social media platforms. This metric can indicate the effectiveness of your social media campaigns in generating website visits and potential conversions.
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Return on Engagement (ROE): Measure the impact of engagement metrics (likes, comments, shares) on key business objectives, such as lead generation, sales, or customer loyalty. It provides insights into the value generated from user engagement.
Auditing Your Social Media Efforts
The word audit doesn’t always have a negative connotation. In terms of social media efforts and your ROI, auditing can help you evaluate various elements of your campaign more efficiently. When conducting a social media audit, there are several key considerations to keep in mind. Here are ten important factors to consider:
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Goals and Objectives: Begin by understanding the goals and objectives of your social media presence. Are you aiming to increase brand awareness, drive website traffic, generate leads, provide customer support, or engage with your audience? Clearly define your objectives before assessing your current social media strategy.
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Platforms and Profiles: Identify all the social media platforms where your brand has a presence. Evaluate the performance of each platform individually and assess whether they align with your target audience and goals. Review your profiles for consistency, completeness, and branding elements such as profile pictures, cover photos, and bio information.
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Audience Analysis: Analyze your target audience and compare it to the followers and engagement on your social media platforms. Consider demographics, interests, and engagement patterns. Identify any gaps or opportunities to better connect with your target audience.
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Content Strategy: Review your content strategy and evaluate the types of content you have been posting. Assess the quality, relevance, and consistency of your posts. Identify which types of content have performed well and resonated with your audience. Consider incorporating a mix of formats such as text, images, videos, and infographics.
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Engagement and Interaction: Measure the level of engagement and interaction your social media accounts have achieved. Look at metrics like likes, comments, shares, mentions, and direct messages. Assess how well you are engaging with your audience, responding to comments and messages, and fostering a sense of community.
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Metrics and Analytics: Dive into the available metrics and analytics provided by each social media platform or third-party tools. Evaluate the reach, impressions, follower growth, website traffic, and conversion rates. Identify trends and patterns over time to understand what is working and what needs improvement.
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Competitor Analysis: Analyze the social media presence and strategy of your competitors. Evaluate their content, engagement levels, follower growth, and any unique tactics they are using. Identify areas where you can differentiate yourself and gain a competitive advantage.
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Brand Consistency: Assess the consistency of your brand's voice, tone, and visual elements across all social media platforms. Ensure that your messaging aligns with your brand guidelines and values.
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Advertising and Promotions: Review any paid social media advertising or promotions you have conducted. Assess the performance, targeting, and ROI of these campaigns. Identify opportunities to optimize your ad spend and reach your desired audience effectively.
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Compliance and Legal Considerations: Ensure that your social media accounts are compliant with the respective platform's guidelines and policies. Review legal requirements for disclosures, copyright, and privacy to mitigate any potential risks.
By considering these factors during a social media audit, you can gain valuable insights into your current social media strategy, identify areas for improvement, and develop a more effective and targeted approach moving forward.
Why You Need an ROI Tracking System
The biggest aspect to consider of any social media effort is its effectiveness. An ROI tracking system allows you to see what is and is not working. It also gives you an idea of how your campaign is affecting other departments within your business outside of just sales and marketing. You also can gain control of your conversion rate and oversee your brand’s reputation more efficiently. Finally, you can use information obtained through a tracking system to prove to naysayers within your company the importance of consistent social media campaigns. Ideally, this will help you to get needed budgeting from your business’s executives by proving the effectiveness of social media campaigns.
Your Next Step
Social media campaigns are without question an important element of today’s marketing. However, quantifying the effectiveness of such a campaign can be confusing. Thankfully, you can outsource your social media management to us at fuze32 and let us do that hard work for you. Allow us to give you a good idea of your current ROI and to provide ways to make your campaigns more effective and then oversee their implementation. Call us today to learn more!
Originally published 7/13/2022 - Updated 7/7/23
