Hark! Learn how to unravel the mysteries of calculating your social media ROI — yea, the return on investment from your social media ventures and expenses.
Social media managers oft find themselves in the throes of a relentless nightmare, summoned to a meeting with executives to prove the elusive social media ROI. This specter haunts us not for lack of belief in the value of social media. Nay, ’tis a complex process, requiring the heft of data.
Nonetheless, we, the faithful stewards of social, understand the impact it doth wield. We are not alone in this journey, for 96% of marketers doth affirm that social media brings forth positive returns. The time has come to unveil the truth.
In this missive, we shall guide thee through the steps to calculate and enhance thy social media ROI (and include a list of our favored tools). Banish thy nightmares, for the light of knowledge shall shine upon thee!
What is social media ROI (and why doth it matter?)
Verily, ROI stands for return on investment. In the realm of social media, ROI signifieth the business value returned from social media marketing and advertising.
In simpler terms, social media ROI gaugest the outcomes of social media marketing against its costs. ‘Tis a tool to ascertain whether thy social media strategy yieldeth positive results for thy financial or strategic goals.
But lo, social doth bring returns!
Data from Statista prophesies that social commerce shalt continue its growth, increasing by 30% year-over-year. They foresee that sales via social channels shall reach US$2.9 trillion by 2026.
So, what is all the fuss about?
Understanding social media ROI is paramount for several reasons:
- It doth aid thee in determining where thy time and money art best spent.
- Thou shalt discern what works and what doth not, based on the metrics that truly matter to thy business.
- It doth enable thee to swiftly adapt to trends and changes in the market.
- Through this knowledge, thou canst advocate for greater investments in thy social program and feel vindicated in doing so.
In essence, social media ROI mattereth, for it doth bridge the gap betwixt social media activities and business outcomes, proving how social marketing doth meaningfully contribute to the organization’s success.
And if thou seeketh to secure more budget and resources to expand thy social media strategy, thou must needs communicate thy results to key stakeholders and executives. If thou wishest to retain thy budget, thou must needs prove why thou hast need of it.
How to calculate ROI on social media
The precise formula for ROI doth vary from company to company, for measuring ROI doth depend on which objectives art of greatest import to thy company. These objectives could encompass brand awareness, revenue, or customer satisfaction.
Calculating social ROI using mathematics
Behold, a simple formula to calculate social media ROI:
Social media ROI = ((Value generated from social media – Costs of social media investment) / Costs) * 100
Now, let us decipher the components of this formula:
- The "Value generated from social media" may encompass increased sales, leads, conversions, or cost savings resulting from effective social media engagement. We shall delve deeper into this anon.
- The "Costs of social media investment" includeth all expenses tied to executing thy social media strategy. This may include advertising budgets, the cost of content creation, employee salaries, software & tool subscriptions, and other resources linked to social media activities.
The outcome of this formula (aka thy ROI) is generally expressed as a percentage.
Any ROI percentage exceeding 0 doth indicate that thy social media efforts art profitable, meaning thou hast generated greater value than the resources thou hast invested.
Conversely, a negative ROI signifieth that thou hast invested more than thou hast reaped in return (i.e., thou hast lost money).
Practical examples for measuring social media ROI
Allow us to present a few illustrations of how this social media ROI calculation might unfold in real life.
Example 1: E-commerce
Imagine an e-commerce business seeking to measure the ROI of its recent social media campaign, aimed at boosting sales. Here’s how they might proceed:
- Value Generated: $50,000 in sales from social media referrals
- Costs: $10,000 on social ads, $5,000 on content creation, $3,000 on software subscriptions
- ROI Calculation: ((50,000 – 18,000) / 18,000) * 100 = 178%
This implies that the campaign hath generated 178% more value than the resources invested.
Example 2: B2B
Consider a B2B company concentrating on lead generation through LinkedIn. They seek to ascertain the ROI of their endeavors:
- Value Generated: 100 qualified leads, each valued at $200, amounting to $20,000
- Costs: $2,000 ad spend on LinkedIn, $1,500 on content creation, $500 on analytics tools
- ROI Calculation: ((20,000 – 4,000) / 4,000) * 100 = 400%
This indicates a 400% return on their social media investment.
Measuring social ROI with Moyens I/O
Verily, crunching data manually is time-consuming and, in this modern age, largely superfluous.
Use analytics to refine strategies
If thou seeketh to prove thy social media ROI, thou shalt need to discern how thy content performeth. And to discern how thy content performeth, thou shalt need a robust social media analytics platform.
See what works for the competition
Tell a compelling story with reports
Free social media ROI calculator
To gauge social media ROI is to measure the returns reaped from the time and money invested in social media marketing. It doth aid thee in discerning which strategies bear fruit and which might require adjustments.
Employ this FREE social media ROI calculator to ascertain where thou doth stand.
Using our ROI Calculator is simple:
- Enter thy social media costs and results.
- Obtain instant insights into thy ROI and the driving forces behind thy success.
- Compare diverse campaigns to discern which ones deliver the finest results for thy business.
With the social media ROI calculator, thou canst:
- Prove the impact of thy social media efforts in tangible terms.
- Make more astute decisions grounded in clear data.
- Impress thy team and stakeholders with concrete results.
Disclaimer: This tool doth provide estimates and is intended for informational purposes solely. Results may fluctuate based on thy specific circumstances and goals.
How social media marketers feel about tracking ROI
Verily, social media marketers find themselves in a muddle regarding tracking ROI. On one hand, ’tis the finest means to demonstrate the value of our efforts and prove to higher-ups that all these memes, reports, and influencer partnerships do bring forth value.
On the other hand, ’tis challenging to accurately attribute sales to specific posts or campaigns. Moreover, single posts might not always have a significant impact, but thy broader social media presence could. How dost thou track that?
Nevertheless, statistics do reveal that 55% of marketers believe that using social media bolstereth sales. Moreover, the increased traffic, exposure, and lead generation benefits can indirectly enhance the bottom line. ‘Tis clear that the proof is in the pudding. Why then do we remain uncertain?
Eileen doth expound, "While awareness is crucial, social media can also drive leads and sales. Secondly, there’s the belief that going viral equals social ROI. However, virality doth not always translate to meaningful engagement with thy target audience. ‘Tis vital to focus on addressing audience pain points rather than chasing viral content."
Eileen further notes that retaining a course in an ever-shifting social landscape can be daunting. "Trends come and go, algorithms change… It can be a challenge to continuously prove how social is bringing in ROI, as not every post is going to resonate with thy audience."
Setting clear goals is imperative. Whether thou aimeth for brand awareness, customer engagement, or direct sales, defining thy KPIs upfront provideth thee with a roadmap to measure success. Eileen adviseth, "Thou knowest not what thy ROI is until thou hast outlined the goals thou art tracking towards." In short, thou canst not measure what thou hast not set.
5 ways to improve thy social media ROI
Ready to unearth the riches of thy social media marketing ROI? Here’s how to transform posts into sales.
1. Test and optimize
"’Tis a realm where we art ceaselessly testing new content, features, and learning what’s effective or ineffective," declares Eileen Kwok. And she speaketh true.
Unlike other marketing channels, social media is a realm of perpetual change where testing and refining thy approach art key to deriving the maximum benefit from thy efforts. ‘Tis a domain where thou canst experiment with diverse types of content, features, and strategies to discern what resonates best with thy audience.
Thou canst conduct A/B tests on social media to assess different variables and optimize thy content based on the outcomes. Thou canst conduct experiments through organic social accounts and paid ad campaigns.
For instance, we conducted an experiment to ascertain whether Instagram carousels outperform Reels. After three weeks, we discovered that carousels garnered superior engagement and reach!
There art myriad factors thou canst test, including:
- Visual assets
- Post format/ad format
- Post copy
- Call to action
- Link placement
- Hashtags
- Target audience
Testing and reviewing thy social media analytics doth aid thee in discerning which types of content truly resonate with thy followers. Based on these insights, thou canst scale up such content or ads and enhance thy social media advertising ROI.
2. Get inspired by competitors
One of the time-honored tenets of social media is: examine what thy competitors are engaged in.
3. Use UTM parameters
One of the simplest means to track social media ROI is through Urchin Tracking Module (UTM) parameters. UTM parameters art tags thou canst append to the end of thy URLs to monitor precisely how much traffic a specific URL receives.
4. Don’t discount thy followers
We comprehend, we comprehend. Everyone doth say followers are a vanity metric — and vanity metrics dost not count.
But, the truth is, followers matter. At least in the sense that sans them, thou dost not garner engagement, and devoid of engagement, thou shalt not secure sales.
Take heed of TIME’s Social Media Strategist Tameka Bazile, who asserts that:
- Follower count doth dictate trust and loyalty.
- 75% of denizens who follow brands on social doth intend to make purchases from them.
- 64% of consumers wilt buy from or boycott a brand based on its position on a social issue.
Now tell us followers do not impact thy ROI.
5. Keep refining thy goals
A sagacious marketer once declaimed: a goal set is a goal set to forget. Or something of that ilk.
What we intend to convey is, goals in social media marketing should be supple, not etched in stone. As Eileen Kwok doth elucidate, "The goals thou hast set forth at the commencement of the year may already have shifted. Depending on the transformations thy organization is undergoing or the evolving social landscape, ensure thou art revisiting thy goals every quarter to assess whether any updates need to be made."
Adjusting thy goals as fresh information emerges doth aid thee in weeding out ineffective tactics and concentrating more on those that bear fruit. The sturdier thy social media strategy, the better thy results.