How to measure your social media ROI
If you’re running a business that is investing time and money into a social media campaign, you’re going to want to know it’s a good return on investment (ROI).
What is ROI?
When measuring ROI, it’s important to understand what you’re even looking at and it’s meaning.
ROI can be calculated by using the following simple financial formula:
ROI = (return – investment) / investment %.
To increase your ROI, you have to increase both your return and investment. If you have a high ROI, it’s a good sign that your social media strategy is working.
So why should you even measure your social media ROI?
There are several reasons why it’s important for any business with a social media strategy in place to measure their ROI:
- Success: it allows businesses to analyse whether their strategy is meeting its objectives and goals.
- Efficiency: you can see if your investment is financially efficient.
- Recognise gaps: recognise if there are any gaps in the strategy and what can be done to improve.
Now you know what an ROI is and why you should measure it, the next stage is to effectively measure your social media strategy:
Step one: Set Goals
The most important thing you have to do before you start tracking your ROI is to set up goals. Identify what are your key performing indicators. This way, you know what you’re going to be measuring, and have an idea in mind about what success looks like. Examples of social media goals to have include:
- Increase in website traffic
- Leads generated
- Increase in revenue
- Increase social media engagement
Step Two: Use the Right Platform
If you’re going to have a successful social media campaign, you’re going to want to use the right platform for your target audience. After all, you don’t want to spend all your money on one platform if that’s not what most of your target audience uses.
Facebook remains by far the most popular social media platform, with Pew Research Centre reporting 79% of adults use Facebook.
However, this data alone does not mean businesses should just focus their efforts on Facebook. You’ll want to know what social media platform a particular demographic, such as age group, is most likely to use. If you’re looking for professionals or recruiters, chances are you’re going to have more luck on a platform such as LinkedIn, rather than Pinterest. Between 2011 and 2014, 11 million young people left Facebook, preferring platforms such as Instagram. Knowing who your audience is, what their preferred social media platform is, and how much time they’re spending on it is crucial to any social media campaign.
Step three: track your metrics
Once you have goals, it’s important to track them in order to know their progress. If you have invested in paid social media advertising, it’s especially important to consistently track your metrics. Make sure you check your data on a frequent basis, whether that be weekly, fortnightly, or monthly. Ignoring your data means you will not have a true understanding of how your campaign is performing and whether you are losing money.
There are numerous tools you can use that will help analyse your data. These include:
Step four: review and adjust
Once you have run reports, collected your data, and calculated your ROI, it’s time to identify any issues. What worked, what didn’t work, and what can be changed to improve? Consider comparing your business to the competition – is there something they aren’t doing that will make you stand out? How often do they post per day – can you match that. However, don’t obsess over the competition, the main thing to do is track your own progress and continually make improvements.
Following these steps will help you to accurately measure your ROI and improve your social media strategy.