How to provide and improve your social media ROI? A complete guide
If you will pay attention to the social media ROI, you will find a key to securing buy-in and budget for your social marketing strategy. You will be able to see what`s better for your strategy and what should be deleted.
However, most of the social media developers don`t know what exactly ROI is. So, in this article, we are going to solve their problem and give all information about social media ROI and show you some tools that help you to improve it. So, let`s start.
What is social media ROI?
First of all, it`s important to give a definition. People must understand what they are working with. So, ROI stands for “return on investment”. In easy words, it’s the sum of all social media actions that create value.
Here we have a simple formula to calculate measuring social media ROI by revenue:
Revenue/investment (people, hours, budget) x 100 = social media ROI.
However, it`s not a catch-all formula for proving social media ROI. Bot every organization will be able to attribute revenue directly to social media. Value isn`t always measured in dollars and cents. Tethering ROI to such a strict definition prevents you from identifying other ways an investment might be playing off.
For example, if you want to drive brand awareness, you would measure success against metrics such as audience reach and engagement, not the profit.
If you need an alternative way to consider your social media ROI, think about the ration between gain and cost, which includes some points such as:
- Social media technology
- Business overhead
Why it`s important to prove ROI?
Of course, you could tell your stakeholders or clients about the value of social and why they must invest in it, but nothing will convince more than data.
Measuring social media ROI is important, because it can:
- Change the perception of social within your organization
- Show the potential impact that social can have across the business
- Show you where your efforts and resources had the best impact
- Help you to understand your audience better
How to measure social media ROI?
Here we will show you some basic steps of making the right ROI measure.
- Have clear objectives
Brand awareness created by social media (comments, likes and shares) is valuable, but not always enough.
To show value, you need to set strong social media objectives that are aligned with business and department goals.
In common, social media goals could be based on:
- Business conversions
- Brand awareness
- Customer experience
- Security and risk mitigation
- Set smart goals
With right social media goals, you will be able to see how and when you will achieve the target you have.
If you are facing problems while setting goals, we recommend you to use S.M.A.R.T. framework. With it, each of your goals will be specific, measurable, attainable, relevant and timely.
- Track the right performance metrics
The social media metrics are needed to determine whether you`re achieving objects and meeting your goals. It will be better for you to use “vanity” metrics (likes, comments, shares) to gauge the overall health of your social presence, measure yourself against competitors and find out what content is resonating with your audience.
- Know how much you spend on social media
Always keep an eye on that point to be sure that your costs are holding in the right measures. It will be unpleasant for you to spend much more than you`ve counted.
Social media ROI tools
Now, it`s time to say a few words about things that will help you to do at least a half of all job. You can choose any of these tools to work on your social media ROI.
Social ROI calculator. This free tool makes it easy for you to calculate the return on your social media investment.
Google Analytics. Track website traffic, conversions and sign-ups from every social media campaign.
Hootsuite impact. This tool makes connection to your existing system so you are able to integrate social data with the rest of your business metrics. It makes producing reports easy, and delivers plain-language recommendations to optimize your social media strategy.
Facebook Pixel. This is a smart code for your website that gives you an ability to track conversions from Facebook advertisements – everything from leads to sales.
Hootsuite insights. With this tool, you can identify conversations and trends within your industry, reach, brand and sentiment. It`s all backed by 100 million data sources, real-time results and easy-to-use interface.
As you see, social media ROI is a massive topic that should be discovered every time we face it. However, if you are a beginner, you can use our article to get some basic information about it. Also, you now have some tools that will help you to do the part of the job!