It can be a scary task trying to work out the ROI (return on investment) of your social media marketing efforts, especially when it comes to organic traffic. However, it’s important to work out whether you’re making a profit or a loss on your efforts… here’s how you work out your social media ROI.
What is social media ROI
Social media ROI is essentially what you get back from all the time and effort you commit to your social media. ROI is usually measured in terms of money spent vs money gained, however, there are no pound signs dangling from retweets or likes! So in the case of social media, it makes sense to identify how much money you’ve put into social media and attach a monetary value to your goals.
For example, if the goal of a paid campaign on your social media is to increase brand awareness, ROI could be measured by growth in followers or post-impressions.
Difficult, possibly.
Possible? Yes!
Why is it important to work out your ROI?
There are several reasons why measuring social media ROI should be a priority for your business:
- Demonstrate the value of your social media marketing efforts to your brand
- Prove that your social media marketing strategies are effective
- Identify the areas of your strategy that are successful
- Similarly, shows you which areas need improvements
- Back up and inform budget allocations for social media
So, how do you work out your social media ROI?
The most basic social media ROI formula is;
Profit divided by investment x 100 = social media ROI %
We already know that it’s not that simple when it comes to social media. So you need to turn your goal into a monetary value.
- Choose a goal
There’s a whole host of goals you can choose from and ultimately this one is up to you. Here is some inspiration below though
- New followers
- Clicks on link
- Online purchases
- Filled out contact form
- Signups for newsletter
- Downloads of .PDF file
- Time spent on important webpage
- Track your goals
Choose one or more of the above conversion goals, and start tracking. You can track website actions (sales, downloads, signups) in Google Analytics by setting up goals and event tracking. You can track social media interactions (shares, likes, follows) in management platforms such as Agorapulse or Monday.
- Assign a monetary value
Once you’ve chosen a goal and tracked the actions, it’s time to tackle the money side of the ROI. There are several different methods to choose from:
- Lifetime Value – How much do you earn on average from a customer?
- Lifetime value multiplied by conversion rate – how much is each potential visit worth to you?
- Average sales – How much is the average purchase?
- PPC costs – How much would you end up paying if you were to use ads to achieve the same social media actions?
Want to learn more about the benefits of social media for your business?
Here at Electron, we can manage your social media channels as part of our SEO package, gaining you brand awareness as well as helping you climb the Google ranks. Want to know more? email us at ash@electrondigital.co.uk
