How to Measure ROI in Social Media Marketing
Need help with figuring out the ROI for your social media marketing? We’ve broken down how to find the exact numbers you need to make sure your investment is actually worth it.
Posted 2 years ago
Written by
Mackenzie TaylorPosted 2 years ago
Oh, ROI. Canât live with it. Canât live without it. Measuring ROI (return on investment) is a HUGE and important piece when it comes to the job of any social media manager (hi, hello, you!). Not only does it help you understand how well youâre doing your job (or not doing ⌠ruh-roh), but it helps you effectively fine-tune your marketing strategy for your (or your clientâs!) account. Learn everything you need to know below on how to measure ROI in social media marketing.
First thingâs first:
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What is ROI for social media?
ROI (aka return on investment) is the return you get from your social media activities and expenses.
In English, please?
Basically, after all the time, money, effort, energy, and resources you put into social media, whatâs the return for your business?
You can calculate ROI in a pretty simple way:
(Value achieved â investment made) / investment made x 100 = ROI
If your ROI is more than 0, your social media investments are making your business money. Winning! However, a negative ROI means that youâre putting way more into social media than youâre actually getting out of it. Not good.
This is why itâs so important to measure your social media ROI to help build, refine, and tweak your social media strategy. It will help show you whatâs working for your marketing campaigns and what needs some major improvement.
How to measure social media ROI đ
The first thing when it comes to measuring social media ROI is figuring out what exactly your company or clientâs overall objectives and goals are.
Do they want more brand awareness? Money? Customer satisfaction? Figure that out first before trying to measure ROI. Now that you have your goals set in place, letâs measure:
1ď¸âŁ Calculate how much youâve spent on social media
There are a few factors at play when it comes to calculating how much youâve spent on social media. Think of these core items when it comes to calculating your social media spend:
- Your time: Yes, you HAVE to think about the time and energy that youâre putting into your social media! Thatâs a HUGE cost. Take the number of hours you worked and multiply it by your hourly wage.
- Social media tools: Do you use certain tools for your social media accounts? How much do you spend on those? Add it up for the month!
- Ads, ads, ads: How much do you spend on social media advertising? Include all ad costs here from Facebook, Instagram, Google, LinkedIn, etc.
- Agencies and consultants: Do you use an outside agency or a social media guru to help you with your marketing? Add it to the cost!
Add all of these costs together and this will be your investment made.
2ď¸âŁ Define the goals you want to achieve when it comes to your ROI
Without clear goals on what youâre trying to track with your ROI, how in the world are you going to know if youâre doing well or not?
Spoiler alert: You wonât! đŹ
I mean, you could figure out if your content is doing well or not, but you wonât have all the data to show how your social media returns are helping with the bigger picture.
So what are your goals? Are you trying to:
- Raise brand awareness
- Customer experience and loyalty
- Lead generation
- Newsletter sign-ups
- Sales
Figure out exactly what your goals are for your ROI before you can move on to the next step.
3ď¸âŁ Start tracking metrics
Now that you have a clearly defined goal for your ROI, itâs time to start tracking the right metrics to prove ROI, like:
- Site traffic
- Leads generated
- Revenue generated
- Audience engagement
- Reach
- Sign-ups and conversions
One of the best ways to track engagement and reach for your social media accounts? By checking your analytics on the platforms! Have you increased your audience? Did you see a major improvement in your reach and engagement? Be sure to keep an updated report so you can show the improvements. Not sure how to create a social media report? Learn how to do so here.
You can keep track of your Instagram analytics on Flick! Click below to start a free 7-day free trial:
4ď¸âŁ Assign a monetary value to the metrics
So youâve clearly defined your goals and now you have started tracking your metrics, itâs time to place a monetary value on these metrics to understand the cash-cash-money side of ROI.
Are you going to base it on each sale? How many people clicked through to your website? How many people subscribed to your newsletter? Place a value on each of these to make sure the money youâre putting in is actually ⌠worth it. đŹ ![social media report]()
5ď¸âŁ Create a report that shows the impact of social media
Now that youâve got all of your data put together, itâs time to create a report to share with the people who want to see those sweet, sweet numbers.
Be sure to show them how much money youâve put into each of the social media platforms, how much of a monetary value each part of the social media conversions were, and give them a breakdown of what the ROI was overall.
Now that you know how to measure ROI in social media marketing, itâs time to start boosting those numbers for your account and learning how to get better engagement and reach to prove to your clients that you can get them the numbers they want (and need!). Learn all about how to increase your reach on your content here.
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