Measuring the ROI of social media can be challenging, but it’s essential to understand the impact of your efforts. This will help you budget wisely and create better content.
Start by adding up your costs, including software, content creation, and employee hours. Add in any ad costs, such as Promoted Tweets and Facebook ads.
Measure Engagement
One of the first steps towards proving social media ROI is understanding how to measure engagement on your content. Using metrics that correlate with your campaign and company goals is essential. These should be SMART (Specific, Measurable, Attainable, Relevant, and Time-bound) to help you track progress.
For example, if your goal is to increase referral traffic to your website, you can measure this by tracking the number of clicks from social media. You can also calculate the percentage of your website visitors from social media by analyzing Google Analytics data.
As businesses navigate the digital landscape, they consistently seek ways to improve their strategies and evaluate their impact; a critical aspect of this process is to measure social media ROI, enabling a comprehensive understanding of the returns on investment garnered from social media initiatives.
While some of these measures are vanity metrics, such as likes and followers, they can lead to future business results. This is especially true if they produce long-term customer relationships that lead to revenue in the future. This could be as simple as asking new customers if they found your business on social media and following up with them after their purchase.
Measure Reach
Demonstrate ROI to your clients and boss by tracking the number of followers you acquire on social media and your overall audience growth. This helps you understand how effective your content is, as it reveals how many people responded positively to your messages.
You can also track reach and impressions using Sprout’s social media management tools. These metrics show how many unique individuals have viewed your post, which is particularly useful when measuring organic and non-paid efforts.
Similarly, lead generation is another metric that can be measured using the same tools and is an essential measure of your social media ROI. A “lead” is a person who has indicated their interest in your business; this might be as easy as signing up for a newsletter or as complex as scheduling a product demonstration. Make sure to include any associated sales as part of your ROI calculations.
Measure Conversions
You’ve probably heard the term ROI tossed around quite a bit in your marketing career, but what does it mean? In general, it means “return on investment.” It’s a figure that shows how profitable your business is due to your marketing efforts.
This metric includes conversions that directly stem from your social media campaigns. These could include website traffic, signups, and sales. You’ll need to employ analytics software like Google Analytics to track conversions.
A post that gets many engagements might not generate any conversions, but the people who see that post may become aware of your brand and decide to convert later. You should constantly monitor engagement metrics—they are a gateway to conversion activities. For example, if you share a link to a product-related landing page, people who click that link are likelier to purchase the product. This is why measuring engagement and conversion rates on your social media accounts is essential.
Measure Revenue
Social media is a great way to build brand awareness, drive traffic, and generate leads. But translating those results into direct, measurable revenue can take much work.
One indirect way to measure social media ROI is by measuring brand metrics, such as sentiment and share of voice. These metrics can then be correlated with sales figures to see if there is an actual relationship.
Other direct ways to measure social media ROI include conversions like email newsletter signups and contact form submissions. These conversions may lead to little revenue, but they signal interest in the company and could potentially result in revenue.
Measuring social media ROI is an ongoing process that should be regularly revisited and evaluated. Setting clear objectives, appropriate vital metrics, and a well-defined approach can help uncover the actual value of your social media activities and prove ROI to stakeholders.
