- Step 1: Calculate how much you spend on social media. …
- Step 2: Define clear social objectives that connect to overall business goals. …
- Step 3: Track metrics that align with your objectives. …
- Step 4: Create an ROI report that shows the impact of social.
4 Ways to Measure Social Media ROI | The Journey
Why is it important to measure social media ROI?
To ensure you create marketing strategies that are successful, measuring social media ROI is essential. It enables you to pinpoint your successes and potential improvement areas. This may provide you with support when arguing for approval of your social media budget by helping you better understand where to allocate your resources, how to update existing tactics, and other related issues.
What is social media ROI?
The return on investment for your company’s social media activities is measured by social media ROI. It demonstrates the benefits that your organization receives from the time, resources, and effort put into social media and enables you to gauge the success of your goals and objectives. Metrics like interactions or social media platform followers that might not otherwise have a monetary value are given a dollar amount by social media ROI.
How to calculate social media ROI
The procedures to be used to determine social media ROI are as follows:
1. Determine your social media objectives
Establish precise goals for how social media will fit into your overall business goals and objectives. To assist you in setting these goals, assess the value that social media brings to your brand. Your brand may gain value from social media by promoting or growing:
When developing your social media objectives, take into account all of your audiences. This includes the public and users of your brand, in addition to your staff, partners, shareholders, and suppliers. When calculating social media ROI, including all of your audiences helps ensure that you do not overlook important value.
2. Set social media goals
Establish goals related to your social media objectives. Goals aid in defining how you will achieve your objectives while objectives determine what you hope to accomplish. Goals assist you in clarifying and defining what you set forth in your objectives, such as identifying the precise percentage of improvement you wish to achieve within a given time frame. This may relate to:
Consider using the SMART method to create your goals. This involves setting goals that are:
3. Track your metrics
Once you set your goals, begin tracking your selected metrics. A number of tools are available that let you monitor website activity. It’s crucial to regularly check your metrics to make sure the tools are properly configured.
Make sure to monitor your metrics for a sufficient amount of time considering your sales cycle. Your data may be impacted if you restrict how long you track your metrics. For instance, if you start a new campaign but only keep track of the metrics for one month, your social media ROI won’t show any success after that month, possibly preventing the campaign from succeeding for the best opportunity to capture its ROI. If, however, you are experimenting with numerous novel traffic-generating strategies, you may measure metrics over shorter time frames.
4. Give metrics a monetary value
Assign a monetary value to your chosen metric. The monetary value may relate to:
5. Calculate your social media costs
Determine your investment in the social media campaign by calculating how much you spent on the campaign. Add up the costs of things like:
6. Calculate your revenue
Make a calculation of the campaign’s revenue or value earned based on your metrics and the assigned financial value. For instance, you discovered that every new subscriber to your email list purchases $30 from your online store. 500 new subscribers to your email list have signed up in the last three months. In order to calculate the $15k total revenue, multiply 30 by 500.
7. Calculate your ROI
Calculate your social media ROI using the following formula:
Social media ROI is calculated as [(Total value or revenue – Total costs) x 100] / Total Costs.
Start by deducting all campaign expenses from your overall earnings or revenue. Take this number, multiply it by 100, and divide the result by the overall cost of your campaign. Your social media ROI as a percentage is the end result.
Heres an example of how to calculate social media ROI:
In order to increase the number of appointments they book via social media, Ninas Nail Salon In order to track the number of appointments made through each social media profile, Nina, the salon owner, registers for a service that lets you create customized scheduling URLs. Nina also updates their posts to point customers to the links in their profiles rather than calling the salon.
Nina tracks her metrics for three months. Since she does not receive an hourly wage, she spent $30 per month on the scheduling software, bringing her total expenses to only $90. Nina calculated that each scheduled appointment was worth, on average, $65 in money. 75 clients made appointments over the course of the three months using various social media platforms, generating $4,875 in revenue.
With the aid of this data and the social media ROI formula, Nina determines:
[(4875 – 90) x 100] / 90 = 5,316.667
Nina’s strategy of purchasing the new scheduling software and updating her messaging to increase booking through social media resulted in an ROI of roughly 5,317%, according to the formula.
What is the ROI of social media?
A measure of the value produced by your investments in social media is called social media ROI. ROI is typically measured in terms of monetary value. However, ROI can first be measured by non-financial metrics in situations where it is difficult to attribute the direct impact on revenue.
How do you calculate ROI for Instagram ads?
Instagram ROI = (Value attained – Costs) / Costs x 100. We like this formula as a starting point because you can get either a positive or negative result. An ROI greater than 0 indicates that your Instagram investment is profitable.
How do you calculate ROI on Facebook?
For instance, the formula for ROI percentage is $4,100 – $3,000 = $1,100 divided by $3,000 = 36 if you spent $3,000 on Facebook ads in the last 30 days and brought in $4,100 in sales. 67 percent.