We know that you may be struggling with justifying all the time and money spent on social media marketing when…to be blunt, it’s hard to attach a direct sale to your efforts. Our clients often ask us how to tell if their social media marketing is really working, or if it’s just a big waste of time. Luckily, you can attach a Return on Investment (ROI) to social media, you just need to know the right way to measure it.
Are You Measuring ROI?
It’s true that it’s harder to attach ROI to more nebulous PR efforts like social media, but you can still track your success in several ways.
How to Measure ROI From Social Media Advertising
Luckily, social media advertising is a lot easier to track ROI since it has a tangible dollar amount attached to it. We love this easily formula from HubSpot for tracking ROI through social media advertising:
Simply take the amount you spent (cost) and divide it by your returns*.
*The “returns” you’re measuring will vary based on your ad objective type. If your goal is to generate more leads, you divide your costs by the number of leads you generate. The same is true for customer acquisition ads, app install ads, website clicks, etc.
As an example, let’s say you spent $1,000 on advertising and generated 8 customers: 1000 ÷ 8 = 125.
This means you acquired eight new customers at a cost of $125 per new customer. If your boss tells you your typical cost of customer acquisition (CAC) is $100 per customer, you know that the return you got from that ad campaign is higher than your typical CAC.
How to Measure ROI From Social Media Posts
Measuring ROI from social media posts is a lot harder than from advertising because it’s not as clear of a return. For example, how do you measure the monetary worth of someone “liking” a post? Instead of basing your ROI off a set budget, instead focus on SMART goals and how well you hit them.
SMART goals are:
- Specific – Your goal needs to be unambiguous and clear.
- Measurable – You should define a concrete way of measuring progress toward your goal.
- Attainable – It needs to be realistically achievable for your team.
- Relevant – Your goal needs to make sense for your business and overall business goals.
- Timely – It’s important to set a time limit on goals to keep them in check.
For example, let’s say you currently average 2-3 engagements per social media post, posting randomly. If you decide to start posting more frequently, you might set this SMART goal:
“Increase my average social media engagements by 5% within the next three months.”
You can then calculate your ROI by measuring your results against this goal. Did you surpass your goal? By how much? Did you fall short of your goal? By how much? Answering these questions will help you nail down your true ROI.
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Free Download: The Beginner’s Guide to Digital Marketing
If you want to grow in 2021, now’s the time to iron out your marketing plan. To be prepared for budgeting this season, there should really be a digital strategy in place to aid your company in reaching their goals. In this guide, we’re going to walk you through everything you need to create a solid marketing plan.
- Set achievable goals for 2021
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Need a new digital marketing or web design plan? We are a Minneapolis SEO, digital marketing, social media marketing, web design and HubSpot inbound marketing agency. Stop on by and get started – and while you’re here, pick up a free honey stick (yes, we love our bee-related theme).