Social media is becoming a major part of the marketing strategy for brands. For all your marketing efforts, you get some form of results in terms of revenue. Social media marketing has gone mainstream in the recent years and become the main focus of marketing efforts for brands. Like most brands, if you too have a dedicated social media marketing team, then you must have a social media budget. As you’re putting in efforts for social media marketing, you are investing your time, money and efforts. If you are generating brand awareness or business leads through social media, you would want to take it to the next level. For this, you need to keep an eye on your Social media ROI.
What is Social Media ROI?
Social media ROI is the measure of the value that you are able to create through your social media activity. You allocate a budget for your social media activity, bring together a team of professionals and devote your time towards marketing your brand on the social. All the results that you receive in return are your social media ROI.
So, are you measuring what value your social media activity is bringing for you?
If not, you need to understand how important it is to measure social media ROI.
Importance of measuring social media ROI
Broadly speaking, you need to measure social media ROI to know if the time and money spent on your activity is worth the results. It will help you maintain the efficiency of your efforts. In a way, your social media ROI allows you to get feedback on your performance. Your social media ROI can provide direction to your social media strategy on that sense.
Social media ROI allows you to dig deeper into your strategy. Are you using the right social media platform for your efforts? Measuring your social media Return on investment will provide you with an answer to that. If you are not getting the desired results, you may want to reconsider the platform you want to use.
Social media ROI helps give direction to your content delivery strategy as well. Are you posting your content at the right time? What type of content is bringing the desired results? How often should you be posting your content? Your social media ROI will tell you if the timing, type and consistency of your content posting is bringing value. If it is not getting you the desired results, you may want to modify your content delivery strategy.
Your social media ROI, in a way, is an audit of your social media strategy. It is important for taking important decisions regarding your social efforts.
It is also important to note that social media return on investment may not always be in the form of money. It depends largely on what the brand wants to achieve.
But how exactly do you measure your social media ROI?
We have compiled a comprehensive step by step strategy that you can follow for measuring social media ROI.
Step by step guide to measuring your social media ROI
What are you trying to achieve through your social media activity?
What is the goal or objective that you want to achieve?
Each brand has its own goals. It could be to increase brand recognition and engagement, boost conversions or to build a community around your business.
For instance, if you are new to a particular social media platform, you may want to focus on building awareness about your brand. To be able to achieve this objective, you need to have a clear goal. Your goals should also be measurable and attainable, apart from being time bound. So for generating brand awareness, your goal could be something like this:
“Increase followers and reach on Instagram by 10% within the next 1 month”
Only once you have a clear goal and objective can you decide the course of action for social media. If your social media efforts are helping you achieve your goal and objective, then it is a sign that you are moving in the correct direction. You can set new goals and objectives once you achieve previous ones.
Identify social media metrics that align with your social media goals and objectives
You need to identify all the social media metrics that align with your goals and objectives. Social media metrics are all the data that depicts your performance. Different social media platforms may have different social media metrics for measuring the same thing. You need to focus on only those social media metrics that matter to your business.
It is very important to ignore the vanity metrics when picking the social media metrics that align with your goals and objectives. These represent numbers that are easily manipulated and have no consequences for business success. You should not take vanity metrics into account when looking social media metrics that matter. These metrics do not provide you with any direction for your social media strategy. An increase in vanity metrics like follows, may appear as good social media performance. But it is not a significant metric for measuring social media performance.
(Want to know which social media metrics are most important for your business? Read about the 14 most valuable social media metrics to track, here.)
If your social media objective is to increase engagement, you need to focus on engagement metrics such as comments, likes, shares etc. If you want to increase web traffic, you should look at your click through rates and costs per clicks on paid campaigns.
Tracking and reporting your social media metrics
Once you have identified the social media metrics that align with your goals and objectives, you need to monitor them. Tracking relevant social media metrics will provide you with important intelligence on your social media performance. You can uncover relevant data on various aspects and stages of your social media activity. With insights that you derive from your social media activity, you can take decisions on your social strategy.
To find how important social media metrics are performing, you should use a good social media Analytics tool. Use Unbox Social Analytics tool and social media reporting tool to monitor your social media metrics. This tool allows you to capture data from across different social media platforms and put it into relevant context, for you to understand.
Now that you know which metrics to track, all you have to do is head to the Analytics tab on the Unbox Social dashboard. You will arrive at the Analytics page, where you can view your metrics for a given platform. Divided into different sections, the analytics page will take you through all the insights on your social media metrics. With the Unbox Social analytics tool, you can easily navigate and find the social media metric you want to track. For relevant social media metrics, you also have the option of customizing the timelines within which you want to monitor your data.
For instance, if you want to track your brand’s awareness on Instagram, you can look at the data on your impressions and reach, along with profile views that Unbox Social provides. Keeping track of these social media metrics on a daily basis helps you stay on top of your social media efforts.
With Unbox Social analytics tool, you can generate reports for your social media accounts as well. These social media reports are very easy to generate and provide you with a compiled set of insights on your social media metrics. You have the option of customising social media reports as per the time period within which you want to monitor them.
The idea behind using social media analytics tools is to uncover data on your performance. With this tool, you can derive what percentage of your audience was engaged with your content or what is the number of impressions for a given time period.
Once you have the numbers representing your social media metrics, you can move on to the next step. You will be needing these numbers for calculating your social media ROI in the later steps.
Measure Your Social Media Spending
Now that you have clear insights on your social media performance, you can go ahead and measure your overall social media spending. It is the sum total of all the time, money and resources you have invested in your social media efforts. You need to have a clear calculation of what you have invested towards your social media activity.
A lot of efforts, time and money are spent into taking your social media strategy to the next level. First of all, you need to create a team of professionals trained in handling different aspects of social media. Days, weeks or even months go into the realisation of your goals and objectives. All these are measured in terms of man hours when calculating your social media spending.
Money is also spent in creating social media content. Did you hire video making professionals? Were there any photo editors involved? Who writes social media copies for your brand? For good quality content, you need to have a good team on board. You may also invest on tools for enhancing your content, such as photo editing tools, video enhancement tools etc. Your Ad spending or paid/sponsored content is another aspect on which money is spent.
Have you brought any influencers on board? If yes, you must have allocated your social media budget for making payments for them as well. It could be in the form of a commission, an affiliate program or in any other form. So, you social spending will include money spent on influencer marketing as well.
You may want to employ a set of social media tools for an enhanced social media activity. Are you using any automation tools? What social media analytics tools are you using for measuring your social media metrics? What about the social media monitoring tools that you are using? You will be spending money on various social media tools for an optimised content delivery and social media strategy.
Your total social media spending, will account for all the man hours and money spent on tools, content creation, sponsored and paid content, influencer marketing etc. You can add all these aspects together to arrive at your total social media investment.
So, your Total Investment= Man hours spent + content creation costs + paid content creation + social media tools + influencer payments
Calculate Your Social Media ROI
Now that you have a clear figure for your total investment, you can move on to calculate the returns on your investment. Using a very simple formula, you can calculate your your social media ROI.
For this, you will have to calculate all the profits that you earned from your social media activity. What was your social media goal? If it was brand engagement, you will add up all the likes, comments, reactions etc. across social media platforms or for a single platform. Now you can calculate your social media ROI with this formula:
Profit/Social Media Spending X 100 = Social Media ROI %
Once you have calculated this, you will arrive at your social media ROI%. Depending on the percentage at which you arrive, you will be more clear as to where you are heading. So you are putting in all the investments for boosting engagement. If you are getting only 30% of returns on your social media efforts for instance, you may want to reconsider the platform or may be your content delivery strategy. You may want to change the time at which you post.
Your social media ROI, in this sense, will provide you with an insight on the efficiency of your social media strategy.
Once you have your social media ROI ready, you need to go ahead and make modifications and improvements to your social media strategy.
Improving Social Media ROI
Measuring your social media ROI is all about knowing if your social media efforts are bringing the desired results. If your past strategy is not helping you arrive at the desired ROI %, you need to make improvements to your social media strategy.
Use your social media insights to uncover the problems in your social media strategy. You know that your social media ROI is not up to the mark. You can look at your social media reports to dig deeper into the metrics that you are focusing on. Are the numbers on the higher side or lower side?
For instance, your reports are showing your engagement levels going down during a given week. Go back to your content for that specific week. Did you introduce a new type of content? If yes, you may want to take inspiration from content that drew more engagement in the past. Did you follow a new content delivery strategy? If your answer was yes, you may want to consider the consistency, time and frequency of posting content. Test various content strategies to know which one works for you.
At the same time, it is important for you to keep track of all the latest trends in the industry. This will help you always stay on top of your game.
Social media ROI is an important part of your social media strategy. To perform with efficiency and get best results, it is important to know how you are performing right now. For this, you need to measure your social media ROI.
Let’s go through a quick step by step guide for measuring your social media ROI:
- Identify your goals and objectives for your social media activity
- Find the social media metrics that align with your social media goals and objectives
- Track the relevant social media metrics using social media analytics tool
- Calculate your social media spending
- Calculate your social media ROI using a simple formula
Once you have calculated your social media ROI, you will know if your time, efforts and money are bringing the desired results and to what extent.