With almost one-third of the world's population conveniently located on social media platforms, which any business can access, it makes sense that social media marketing should be a top priority.
Being on social media is step one, but as with all marketing strategies, there should be a clear goal and measurements in place to track the success of social media campaigns and ensure that your efforts are driving return on investment (ROI).
With no strategy or way to measure ROI, businesses risk throwing their precious marketing spend into the ether.
Defining ROI requires first understanding what you want to gain from your social media campaigns. What are you on social media for?
- Brand awareness?
- Customer satisfaction?
Whatever it is for your business, defining the primary goal is essential to be able to measure success.
Why Measurement Matters
"If one does not know to which port one is sailing, no wind is favourable."
This powerful quote by Lucius Annaeus Seneca is particularly applicable when speaking about social media and marketing. If you don't know where you're going, then why be on social media, to begin with?
If you're not entirely sure how to answer that, allow us to give you a few solid reasons why measurement makes social media more powerful:
- It can change the perception of social media within your business - thus supporting requests for more budget
- It allows you to pinpoint the impacts social media has on the entire business - increasing brand awareness, customer satisfaction, etc
- It makes strategising easier by showing you where your efforts and resources are getting the best results
- It shows you where time is being wasted - so that tactic changes can be decided quickly before too much time and spend has been invested
- It allows you to get a real understanding of who your audience is - thus allowing you to continually improve how you communicate with them.
What Can Be Measured?
Social media ROI is not always easy to measure. If you're running a social media advertising campaign, this is easy to track. However, if you're posting regular content and working to build followers and customers organically, it can be more difficult (but not impossible) to track the impacts.
While everyone, of course, wants to see revenue increases, it's important to understand that not all businesses can attribute revenue directly to social media. This is OK. There are many goals that businesses should have beyond revenue that will ultimately lead to increases anyway.
If you are working on brand awareness, you will want to track audience reach and engagement. Unsurprisingly, if your audience reach and engagement increase, so too will your revenues.
If you're working on getting more signups to your newsletter, you will track the signup rate following campaigns. Same as with brand awareness, the more subscribers you have, the more you're going to see your revenues increase.
To make sure we're all on the same page, when we talk about social media campaigns, they could fall into one of two categories: Social media advertising and organic social media efforts.
Social Media Advertising
Social media advertising involves advertising spend where you would pay to create a campaign that is going to give you access to exponentially more people than if you were just posting on your page. This includes both advertising through the social media platforms themselves, or through social media influencers.
Social media advertising is easy to track because all of the social media platforms -- Facebook, Twitter, LinkedIn, Instagram -- are set up to monitor the outcomes of your campaign and put measurements in place when setting it up.
Organic Social Media Marketing
When we talk about organic efforts, we are talking about the activities and results that didn't involve spending on advertising. Simply being on social media and posting regular content, without paying to boost it, would be included in this category.
Organic efforts tend to tie in with content marketing; setting a strategy to post regular content which will resonate with your audience and work to build engagement and brand loyalty.
An excellent social media strategy will include both of the above. Advertising is a relatively low-cost yet super powerful tactic to reach precisely the persona profile you want to be your customers. Your organic social strategy keeps existing followers entertained and engaged.
The 5 Steps to Measuring Social Media ROI
Step 1 - Objectives
To set clear objectives, you need to consider the ideal business outcomes. How can social media support your business?
These objectives can be different from business to business, but might include:
Brand awareness or perception
Conversions (customer acquisition or lead generation)
Step 2 - Goals
Your goals will take your objectives and put more clear outcomes against them. They should include "how" and "when" so that you have a clear target to work toward.
For example, if your focus is brand awareness, your goal may become: Boosting website traffic by 10 per cent before the end of the year.
Step 3 - Metrics
Metrics include the basics such as likes, comments, and shares, as well as more in-depth metrics including reach, audience engagement, site traffic, leads generated, sign-ups and conversions, and revenue generated.
Not every business will need all the metrics. They should be determined based on what the objectives and goals are. Consider if the metrics help you to make decisions to reach your goals, if yes, they should be monitored.
Step 4 - Spend
Knowing your spend is essential for being able to track your ROI. What does your business spend on:
- Social media advertising
- Tools and platforms used for social media
- Content creation (did you use in-house staff or outsource the work?)
- Employee costs (how much time was spent working on social media?)
Add all of the above to calculate how much you are spending on your social media efforts.
Step 5 - Calculate
Take the total spend and measure it against the goals and metrics.
Using the same example as above (increasing brand awareness by increasing website traffic by 10 per cent before the end of the year), we can determine the cost of each visit with this formula:
Website visits via social media % total spend X 100 = ROI (as a percentage)
If math is not your strong suit, you can utilise tools such as the Hootsuite social media calculator to get your final figures.
No matter your objectives and goals, measuring ROI will make a significant impact on the results of your social media marketing. Once you're set up to track, you're set up to iterate, improve and continually boost your outcomes. If you'd like help, check out our digital marketing services or feel free to get in touch.