Calculating Social Media ROI
As a social media agency, business owners who are investing their money in your agency to handle their social media accounts will no doubt be asking how they can calculate their return on invest (ROI).
While measuring the ROI of social media can help you work out whether a certain campaign was successful or not, it can be a time-consuming job that can involve some difficult steps. Placing an exact dollar amount on any of your social media campaigns is almost near on impossible, because it’s hard to determine how much your business is spending on social media and what financial results occurred from it.
To begin, you can start by calculating how much you’ve invested in labor, writing content, consulting, and other social media services. However, it doesn’t mean a pinch if you can’t measure your exact profit. Many businesses fall into the trap of miscalculating “follows” and “likes” when trying to determine the sales directed from social media platforms.
Steps to Take to Measure ROI of Social Media
Although it can be quite difficult to do, it is possible to produce good ROI from your social media campaigns and measure the dollar amount to reflect how your marketing has paid off. This is where your social media agency will need to be up-to-date on social media’s ever-evolving algorithms, strategies, and tools to land on an exact count of the return investment on your marketing efforts.
Below is a step-by-step layout with examples to give you a better idea and how you can simplify the process of measuring your social media ROI.
Creating Social Media Conversion Objectives
As you would for any product you sell, creating a marketing plan is important as it allows you to establish clear social media conversion objectives for your business. Since every business will have their own set of unique goals with their social media profiles, these objects will differ. You should always generate objectives that result in customer actions that are measurable. That way you’ll know what success looks like and the factors you’re measuring to track the ROI value.
When deciding on your business’ unique social media conversion goals, you should ask yourself what you want your new and existing customers do when they are on your social media profile.
For instance, measurable conversion factors might include clicking on a link, completing a contact form, making an online purchase, downloading a PDF or whitepaper, signing up for a newsletter or offer, sharing a post, liking your Facebook page, or following your Twitter account. Concentrate on major social media objectives that can help boost your social media page, help secure sales, and benefit your every-growing business.
Keeping Track of Your Social Media Conversions
To begin successfully calculating your ROI of social media, you will need to track your conversions to understand what stages in your goals you have reached and where your business stands with regards to reaching your social media conversion goals. It’s almost impossible to measure your return on investment without knowing the visitor conversion rate. Be sure you are able to measure the number of visitors traveling to your page from social media accounts and the number of those visitors making actual purchases.
Adding Up Your Social Media Benefits
The next phase of calculating your ROI for social media involves adding up the total benefits incurred from each platform. Google Analytics is a tool you can use to avoid confusion in creating various spreadsheets that will measure total profits from all your media accounts. From there, you’ll be able to correlate the data with the total monetary value for those conversions so you can better under your benefits.
The next phase of calculating your ROI for social media involves adding up the total benefits incurred from each of your social media platforms. If you struggle with math, use the Google Analytics tool to avoid confusion in creating spreadsheets that measure total profits from every single media account. You'll then be able to correlate that data with your total monetary value for those conversions to better understand your social media benefits.
Examine Your Results
Lastly, compile all the financial data earned to consciously measure your ROI of social media for every channel. All you need to do here is subtract you costs from your total profit, multiply by 100, and divide by your costs.
Possessing a clear record of ROI for each of your social media channels will allow you to make Social media strategy marketing decisions on which of your platforms you should focus on to get more profit. If there is a specific platform lacking in performance, you can always make changes to boost its revenue.
Being active on social media will almost certainly drive larger amounts of traffic to your company’s website or blog than any other marketing tool. The more visitors you have, the more profit you’ll get for a higher conversion rate. Remember that you can’t simply surf through the Internet and maintain social media pages without knowing if your efforts are paying off. No matter how difficult it is to measure your ROI, it’s important that you do so you know what is working and what it isn’t.