Companies are spending a big amount on their social media marketing. There are companies which spend quite a huge amount while there are companies that don’t put in a lot of their money on social media.
According to an analysis conducted by The Content Factory, it was found that $4,000-$7,000 per month was the industry average.
Irrespective of the amount spent on social media marketing, it is important to measure the benefits from spending the amount on social media marketing. This is referred to as ROI (Return On Investment).
But most of the marketers struggle to validate the exact ROI from their social media expenditure. How much money is coming in due to the social media activities that you took up? There is no one single method to measure the ROI of your social media marketing activities.
Below 5 Steps to measure your social media ROI:
1. Identify Your KPIs
First step involves decision making of what is most important for your business.
Most of the times you hear the question ‘Is your social media marketing working well?” What does this mean?
You can answer this question only when you have a measurement in place. The first step towards measuring the effectiveness of your content is by knowing what to measure. You should narrow down the key factors that can tell you about the way your social media marketing is performing.
You have to list down all the metrics that are most important for your business. These form the key performance indicators which needs your highest focus. Based on these KPIs you can align your social media efforts and marketing strategy.
Some of the important KPIs include the follower count, impressions, web traffic, clicks, likes, shares, etc. Website analysis tool, Tableau, offers features to measure website traffic health and content performance.
2. Align Social Media Activities To Business Objectives
A business ventures into social media with a strong goal in mind. Business might want social media presence to increase its brand awareness, to engage with their audience, to increase customer service or to increase sales. All these should eventually lead to achieving the overall business objective. When the business objectives and the social media activities are aligned, then it becomes easy to measure the ROI.
The bigger objectives should be broken down into smaller goals. For example, if your objective is to increase revenue, then the social media activities should focus on customer sign ups and product purchases. If the objective is to build brand awareness, then social media activities should focus on improving visibility on social media, increasing followers, etc.
But these tasks are not one time and have to be done consistently to reach the goal. The best way to overcome the hurdle of limited time is to seek automation for some of the processes that are repetitive and manual in nature. The key for social media marketing is to find automation tools that will cater to the ever changing needs of social media.
3. Shortlist Social media Tools To monitor Conversions
Business and brands who are into social media marketing can bring a lot of difference to their marketing strategies and tactics just by monitoring social media performance. Social media analytics or social media metrics, which is gaining huge importance with brands, is an exercise of monitoring and examining social media performance.
Brands are using it extensively to understand each action on social media such as likes, comments, tweets, retweets and of course to measure big social media campaigns.
But It’s not possible to manually monitor everything across so many different social media channels due to limitations such as time and accuracy. Social media analytics tools have therefore become an essential component of every social media marketing strategy.
As a Brand if your social media presence is growing, then you will need to consider investing in social media analytics tools. These social media analytics tools have evolved over the years and are now providing really useful functionalities.
Brands are gradually understanding the importance of measuring the social media ROI (Return on Investment). Measurement of reach, engagement rate, influence, conversion and acquisition is made easy with the help of tools.
Brandwatch is a social media metrics tool that is useful for social media marketers and business owners who prefer a data-driven user interface.
Brandwatch Analytics can crawl the social media and archive the voluminous social media data that is gathered from at least 90 million sources and in 27 languages. You can perform searches on the data in Brandwatch’s web-based interface, proactively or retroactively to search for social media mentions of your brand or keywords.
4. Determine Total Cost
Once you know the activities that have to be planned for social media marketing, it is time to determine the cost for the same. You can either do it yourself or outsource it for affordable price.
If you plan to outsource, agencies offer a lot of different packages at different pricing models. If you decide to do it by yourself, it can be done by setting aside a budget for various activities. After some careful research, and putting aside some dedicated time for social media marketing, you can definitely start doing it yourself.
In a highly competitive content marketplace, simply relying on manual efforts will lead you nowhere. You will exhaust all your efforts and time in keeping up with the algorithm updates and changes on the social platforms and all other major search engines.
As a result, it’s time for social media marketers to make use of the social media management tools to develop a successful social media strategy.
Now calculate the total cost of tools, social campaigns, content generation, employee cost, and all other costs involved in social media activities to arrive at the total cost.
5. Calculate ROI
Now the question of the actual benefit that a business is getting from its social media marketing will be answered. After going through the above steps of laying the foundation to measure the ROI, here in this step, the actual calculation of the ROI will have to be done.
According to research data, 55% of social marketers said measuring ROI as their number one challenge.
There are easily available templates to track the metrics without the need to build it from scratch. With these reports you will be able to ascertain the ROI of your social media campaigns. You can also take help from third party insights to report the ROI of social media marketing.
Social media marketers can take help of the various ROI calculator tools that are available.
Hootsuite Impact is a tool to measure the ROI of social media. It allows you to connect to your existing analytics so that you can integrate social media data with the rest of your business metrics. You can generate reports using this tool which also delivers recommendations to optimize your social strategy.
Measuring the ROI of social media marketing is all about justifying the budget that was allocated towards social media activities. Measuring social media ROI gives you valuable insights into the various social media activities that you perform daily, and gives an indication of what is working well.