Social media is an integral part of any successful digital media marketing strategy. But for years, determining an accurate return on investment for social campaigns has been a challenge.
When you invest in implementing a social media strategy, measuring its effectiveness is imperative.
Measuring the effectiveness of your strategy is vital in demonstrating how the investments made are contributing to the overall business goals. Tracking the ROI allows marketers and brands dedicate more resources into works and develop the tactics that do not provide evident value.
The fundamental problem in social media marketing is the lack of common denominator or a universal formula that could ultimately measure its ROI. Because of this, the efficacy of many social media marketing campaigns has been measured unsystematically.
Defining Social Media ROI
The return on investment largely depends on the company objectives—be it brand awareness, sales revenue, customer sentiment, etc. Generally speaking, social media ROI refers to the actions that create value for the company.
What actions did your intended audience make after being exposed to your campaign? Do these actions align with your brand objectives and goals?
For example, if the main goal of your campaign is to drive awareness, success can be measured based on the reach and engagement instead of income.
Taking a look at the proportion of your gains and expenses is another way of gauging the effectiveness of your campaign. The costs could include labour, tools, advertising budget, business overhead, training and consultants.
Meanwhile, the gain from actions taken by your intended audience includes downloads, purchase, subscriptions, signups, page views and more. Analytics could help you define which kind of conversion can be accredited to social media. This will help you determine and prove the value of social media to your brand.
Measuring Social ROI
The ROI is concrete proof that the funds being dispensed to social media campaigns are bringing value to your organization and your clients.
Measuring the ROI demonstrates the impact social media can have on marketing. This allows marketers to determine which efforts are effectively being utilized and which need to be adjusted. More importantly, it helps you better understand customer perceptions, preferences, and motivations so you can fill in the gaps in your strategy accordingly.
Do you spend a lot of resources in implementing social media campaigns but have to idea if your efforts yield actual results? Are your clients demanding for proof of ROI?
Here are a few tips that will help you measure the effectiveness of your social media marketing campaigns:
Set Key Performance Indicators (KPIs)
There are many ways to measure ROI other than revenue when it comes to social—customer acquisition, lead generation, revenue, website clicks, contest entries, PDF downloads, and more. As mentioned earlier, this is all dependent on the goals set by your organization.
To establish the value of social campaigns, set objectives that complement current business and departmental goals.
Define key performance indicators so you have clear parameters that will help you measure the success of your social campaigns. Consider the following key metrics: traffic, leads, customers, reach, and conversion rate to determine the effectiveness of your efforts.
The ability to track should be built into every action you take on social media to have an accurate measurement of your campaign results.
In order to efficiently track conversions from your social media marketing efforts, you need the right tools to set up conversion funnels, track consumer actions, examine data, and create a clear report based on the results.
- Google Analytics
Google Analytics is an invaluable free tool that allows marketers to set up specific goals and monitor how often visitors complete the defined actions. Through it, you can track traffic, on-site conversions, as well as sign-ups that originate from social media campaigns.
- UTM parameters
These are text codes added to a URL that captures important information about site visitors and traffic sources. This works well with other analytics tools such as Google Analytics. By setting UTM parameters, marketers get detailed information about how a social media platform performs in driving site traffic in granular details—from which platform performed best and which post garnered the most clicks.
- Facebook Pixel
Facebook pixel allows you to track website traffic generated from any ad your run on the platform. It also shows any associated actions that your target market does on key pages of your website—checkout pages, add-to-cart pages, or registration pages, etc. The tool will track what actions your site visitors from your Facebook ad are taking which makes conversion tracking easier.
Review Results and Optimize Goals
Measuring social media ROI provides your company and clients valuable insights on the effectiveness of your campaigns. Calculate your ROI after successfully garnering the statistics of your social media campaigns.
Once you identify what worked and what didn’t work based on the results, review and improve your existing strategy. The main goal of tracking your social ROI is not only to prove the value of your efforts but also to optimize your strategy accordingly. These insights will be instrumental in significantly increasing ROI over time.
Benchmark against your competitors
Take a look at the industry standards when it comes to social media performance. How well does your organization stack up? Understand which platforms work best in reaching your targeted audience.
Compare your efforts on social media with that of your competitors. Having a holistic understanding of your competitors’ campaigns will help you uncover opportunities for your brand to stand out and cut through the noise.