Social Media Analytics & ROI
Social Media ROI can be such a debatable topic; it’s nearly impossible to measure what exactly is coming back to you, based on an Instagram post or a Facebook tag, with 100% accuracy. It’s hard to tell if “that one IG post” increased your revenue or bottom line. Measuring the effectiveness of your social media marketing efforts is, in fact, really challenging! A recent study showed that:
41% of companies admitted to having “no idea” of whether or not their social media marketing efforts were successful (ConvinceAndConvert.com).
What is social media ROI?
Basically, it is the sum of what you are getting back, based on the money, time, and resources you are putting in to your social media. Generally, you measure your return in dollars.
You need to track what you are doing, what you are spending, and what results you are getting.
Why measure it
Measuring your ROI is crucial so that you can find which media channels are bringing in the most revenue, you can avoid wasting time and money, you can improve your marketing efforts, and you can see how changes in your strategy affect the overall return.
How to measure it
Step 1: Start by defining your social media goals.
- They should be quantifiable and measurable… something you can assign a number to. (Examples: email list sign-ups, completed contact forms, downloads of your e-book, time spent on an important webpage, trials, purchases, etc.)
- You can track metrics like followers or shares, but these shouldn’t be your main goals. It’s more meaningful to track the number of people who go from a casual browser, to a lead, to a paying customer, than to worry about “popularity.”
Step 2: Track and measure your goals.
- Google Analytics seems to be the easiest way to track your goals. Within the dashboard, you can set specific goals to be tracked on your social media platforms. This is where you set the goal you chose earlier, such as email sign-ups or downloads of your e-book (For these, set up one landing page for sign-ups and/or one landing page for downloads, and within Google Analytics, choose the goal type of “destination page.”) For accurate measurements, be sure that the landing page you are tracking is created specifically for this campaign. It should have a special, unique URL and should not be discoverable on Google; this way, you can be sure that you are only tracking the conversions brought in from “that” specific effort. You will know that the only way the person landed on this landing page was by signing up for your email or downloading your e-book.
- Here is an article that lists some other super helpful tools: Social Media Analytic Tools
Step 3: Track your expenses.
- Include things like:
- Ad costs – Ads cost money… Include the expense you put towards your boosted Facebook post, your promoted tweet, etc.
- Labor (man-hours) – Time is money. Measure the amount of hours spent altogether on each specific campaign, per campaign, and multiply the hours by the hourly rate paid.
- Content – Did you have a professional copywriter help you create a landing page? Did you outsource postings and status updates?
- Tools – Do you use any tools, like Buffer, Grum, or Hootsuite? Social media management software can be extremely helpful (and reduce man-hours), but there is sometimes an added cost to having/using these. (Again, don’t forget to measure this on a per campaign basis. If you paid for a year’s subscription, and the campaign only lasted 2 months, include the cost of 2 months of that year-long subscription.)
- Include things like:
Step 4: Calculate your ROI. Income minus costs, times 100, divided by costs.
(Income from Campaign – Costs from Camp.) x 100 / Costs from Camp.
= SOCIAL MEDIA ROI
If you were using multiple efforts to direct consumers to your landing page, and you want to break your numbers down further, look at each social media platform individually. Find your income and your costs for that one campaign on that one platform to calculate your total ROI for that one platform. (Use the same equation above.)
Analyze & adjust
Find the platform that is giving your company the highest ROI, and adjust your marketing efforts to focus more on the most effective platforms.
A negative ROI on a campaign or social network means that your strategy needs to be adjusted. Work to reduce your costs, or make your campaigns more effective.
If you’re more of a visual person, check out THIS INFOGRAPHIC created by ‘Quicksprout’. It will walk you through an excellent example of a fictional company setting, measuring, and analyzing their own social media efforts and ROI.
It’s not all in the numbers
Keep in mind that not everything can be tracked and measured. It’s important to also remember the indirect benefits you can receive through social media. For example, if a top influencer on Instagram shares one of your photos, your brand is instantly exposed to a whole new (huge) audience! You will likely gain some followers, and this may or may not result in sales. So when you look at your social media ROI, remember that it’s not all in the numbers and dollar signs. Everything you do on social media can affect your ROI.
It’s possible, and it’s worth it
While tracking and analyzing your social media ROI can be incredibly challenging, it’s worth taking the time and energy to do! It will pay off by showing you where you are struggling and where you can shift your marketing efforts and dollars to better benefit your business.
Go in with a planned strategic approach. Organization will make this task immensely more enjoyable (and accurate)! Over time, fine-tune your numbers; your expense estimates will become more accurate with experience and, as with anything, the process will get easier with practice. 🙂