Are you curious to know what is the role of ROI (Return on Investment) in Social Media? And why it is important to measure the Social Media ROI for your business? Generally, If you ask this question to marketers, they all will give you different answers that increases your doubt instead of clearing it. However, they all agree on one thing that social media channels are capable of bringing enormous leads & traffic for websites that would eventually convert into customers.
Why Social Media is Important For Your Business?
According to a HubSpot report, around 90% of marketers claimed that Social Media Marketing has helped them gain enormous exposure for their brand or product. Thus, the above statistics prove that in today's time the power of Social Media can't be ignored or overlooked. It would be a grave mistake for a business to neglect the power of social media if they want to be successful online.
What is Social Media ROI?
Considering the above statistic, most of the marketers are still debating over the role of Social Media Marketing in their online success. They find it difficult to measure the effectiveness of their Social Media efforts and how much Return On Investment (ROI) a tweet or post on Facebook has generated for their business. Recently in a survey conducted by Convince & Convert 41% marketers agreed that they have no idea whether Social Media strategies are really paying them off or not.
Social Media ROI does not mean by the number of likes or followers a post has obtained on various social media channels. In fact, it has broader meaning and impact on a businesses.
Apparently, most of the marketers are confused over the role of ROI in Social Media thus, we have tried to clear the air and give you a clearer idea of this term.
Definition of Social Media ROI
The definition of this term entirely depends upon the objective of the organization. But, in simple terms, Social Media ROI is the return your organization is getting from investing time, money and efforts in Social Media Marketing. Generally, the return is measured in terms of profit you get by investing a particular sum of money & resources.
How to calculate ROI?
Profit / total investment (people hours, ad budget, etc.) X 100 = social media ROI (as a percentage)
This is a simple formula to measure the ROI of your Social Media Marketing campaigns.
For example: if you have spent $2000 on promotion at various social media channels and made $4000 revenue that means your profit is $2000. It means that you get 100% return on investment through social media marketing.
But before you start calculating anything, you must know your goals from Social Media.
Why You Should Set Social Media Goals?
It has been seen that most of the companies plunge in social media without having a clear goal or objective. Most of the companies get into the social media marketing because of hearing the success stories of the other companies. They imagine that they would also attain the similar success like other companies through social media.
So as an organization you need to set a goal and prepare your marketing strategy keeping in mind that specific goal. Setting up a clear goal would help you evaluate your performance and let you know whether your efforts are paying off or not.
Defining the social media goals are not as easy as they sound. Since, not every organization is using social media marketing with the intention of making money. Many organizations use social media as a platform to spread awareness about their brand.
Hence, in this case, you will measure the success of your campaign against metrics such as the number of likes, impressions and engagement your post received not against money.
Thus, the ROI varies greatly from business to business based on their business model.
Every organization has different goals which mean the ROI will entirely depend upon the objective of the business.
However, to quickly become successful, they ignore the most important part which is tracking or evaluating what they are doing and how much money and efforts they are putting on social media and what return they are getting by investing time and money in social media.
Why it is Important to Track Social Media ROI?
- It helps you determine whether your efforts are bringing any positive results or not.
- It helps you find which social media channel is deriving more revenue or profit.
- It also helps you to modify your strategy or plan by analyzing the impact of the current strategy.
For Example: Imagine you are running a campaign on Facebook and never checked how much you are paying per click, what kind of click-through rate, you get by running your campaign, likes, followers, whether the audience who clicked on your ad converted into sales or not. Therefore, it is immensely important for you to measure the ROI of Social media efforts.
Steps to measure the Social Media ROI:
It is one of the most pertinent questions asked by the people who want to measure the ROI of their social media efforts. If you are also unsure of how to set the ROI for your business, then don't worry, we have mentioned it in detail below:
- Set Your Social Media Goals
- Track Your Social Media Expenses
- Tools To Help You
Set Your Social Media Goals
If you want to track your performance on Social Media, then you need to be clear on the goal or aim of your campaign. Moreover, the goal which you set should be quantifiable and linked to a specific campaign.
- Sign up for Newsletter
- Download of an Ebook or whitepaper
- Brand Awareness
- Lead Forms
- Number of Like, Followers, Share and mentions
It is advisable to set up these goals before proceeding ahead with the tracking ROI.
Setting up these goals will help you to have a clear picture whether you are on right track or missing on something. This would help you to review your performance and modify your strategy in future.
While setting up a goal you should consider the action a user takes on your post that will eventually turn into a lead or sale.
For example: If somebody clicks on a link at Facebook, then you should put your efforts to know whether they are converting in to a lead or not.
Moreover, you should set specific goals for different campaigns. This would help you to have a better understanding that which campaign is performing good and which are not.
If you are running separate campaigns on different social media channels such as Facebook, Twitter, Linkedin and Instagram, then you should measure the ROI of all these campaigns individually. It will help you get a better insight that which social media channel is proving more benevolent for your business.
Track Your Social Media Expenses
Evaluating social media expenses is important because this will help you to get an idea whether your campaigns are resonating with the targeted audience or not. It also helps to get a clear picture what is your expenses and whether you are getting positive or negative ROI.
Here is what you need to track:
Ad costs: If you are running a campaign on Facebook, Twitter or other social media channels then note down your expenditures for each platform.
Man Power: In order to post and manage profiles on various social media channels you need to hire a team. Hence, while calculating the social media ROI, include the hours or time your team put on the social media channels. This will assist you to track the ROI efficiently.
Social Media Tools: If you are using social media management tool such as Statusbrew for scheduling your posts on various social media channels. Then you should include the cost of these paid tools in your expenditure. However, if you have used these tools only for the Twitter campaign, then while calculating the Facebook promotion cost don't include it.
With your expenses calculated you will be able to find the social media ROI for every campaign. To do so, you need to use this simple formula:
(Earnings – Costs) x 100 / Costs
With this simple formula, you can easily measure the ROI for your each social media channel by segmenting the expenditure per social media channels and earning.
Tools to help you
There are various social media analytics tools available that will help you calculate the ROI easily. All social media channels such as Facebook, Twitter, and Instagram provide native analytics that helps you track your social media performance.
However, if you are running social media campaigns on more than one social sites and want to have a thorough look at how all your posts are performing on different social media channels quickly, then you need to have a third party management tools to get you better insight.
There are several online social media management tools available that can help you calculate your social media ROI.
Why Should You Use Statusbrew’s Reporting Section To Measure Your Social Media ROI?
Statusbrew has a detailed reporting section combined with the ability to schedule posts on different social media channels and audience management for Twitter. Thus, if you are looking for a social media management tool for comprehensive social media solution, then you should try this tool now.
Now let's find out how Statusbrew reporting section helps you to measure the ROI from social media for your business.
The report section of Statusbrew is divided into three categories:
The audience section helps you to get detailed insights for your followers, unfollowers, likes, demographics such as age, gender, cities, the country from where you are receiving traffic and engagement.
This will help you to evaluate your ROI for your Audience targeting efforts, effectively.
The audience section will helps you in determining whether you are targeting the right set of the audience or not.
The demographics will help you to find what age group or audience is interacting with your post. This will help you to change your strategy and start targeting the age group or countries from where you are getting the more engagement. With this you can modify your publishing strategy for each platform.
The audience section works with Twitter, Facebook, Linkedin and other social media channels.
This section helps you to analyze how your post is performing on different social media channels such as Twitter and Facebook. The engagement section shows you the number of likes, share, comment, impression and clicks your post is getting.
This information will help you to track whether you are receiving positive or negative ROI from your social media efforts.
The content section helps you to evaluate how your posts are performing on different social media channels. It gives you a detail report that how many peoples have liked, clicked, commented and shared your post.
This will help you get an idea whether you are heading in the right direction with your social media plans.
Suppose, if your aim is to enhance brand awareness, then using Statusbrew reporting will get you a better insight that how people are reacting to your posts. This will also help you to change your social media marketing strategy to target the right audience.
Built For Teams
With Statusbrew's reporting, you can see the analytics for the groups of your profiles and filter them based on the connected Social Networks. This allows you to specifically see which Social Profile from which group is performing the best and giving you the best ROI.
The team members associated with that group can make use of the insights and optimize the efforts that they put in each Social Network to improve their ROI.
Track Performance on Multiple Social Media Channels
Statusbrew reporting section helps you to track the performance of your post on various social media channels from a single place. You can simply attach your various social media accounts with Statusbrew and start publishing on all social media channels such as Twitter, Facebook, Linkedin, Instagram, and Google+ using publish section.
Now you can click on Report section>Filter channels and select different accounts such as Facebook, Twitter, and Instagram to check the followers, likes, shares, comment and impression growth.
Using the Statusbrew report section will greatly save your time and effort. Since all your social media channels are connected with it. You can simply log in to Statusbrew and analyze the performance of your different social media posts through this tool. And this will greatly save your time in tracking the ROI of social media.
The Statusbrew report section will help you to find which social media platform works best for you. To find this out, you can go to report section of Statusbrew and compare different social media platforms to find which one work best for you. And this way you can shift your focus to that particular social media channel which is getting more engagement to maximize your ROI.
As you know you need to hire a group of professionals to manage, curate, share and track the performance of your posts on different social media channels. And hiring people would increase your expenditure that eventually makes a negative impact on your ROI. With Statusbrew reporting, you can manage all your social media accounts from a single platform that will considerably save your money and play a significant role in increasing your ROI.
Improve Your ROI
Using Statusbrew social media management tool can improve your ROI and play a significant role in making your business more profitable. However, you may be thinking that you have to invest in buying this tool, but in long run, this tool will help you save money and improve your ROI.
ROI plays an important role in your online success. Thus, if you want to be successful online, then you can't ignore optimizing the ROI. And when it comes to Social media it becomes hugely important to determine the ROI before starting off with promotions. If determining ROI for social media has helped you to improve Social Media presence, then share your success stories with us in the comment section. We will love to hear about it. Over to you.