The management at a small company asked me to do a social media marketing analysis for their blog. They said they could reduce the costs of social media marketing by half, but they would also like to know how much their investment is worth.
Marketing has changed. As consumers become more and more engaged with brands, online and offline, businesses are needing to engage with customers more than ever before. Social media is helping brands fulfill this need. But unless you can prove the value of your social media strategy, your boss will be less than impressed.
Whether you’re a social media manager for a brand or an agency with multiple social media clients, you’re bound to be asked this question: What is the return on investment of our social media?
When your boss or client asks you what return on investment (ROI) is, they mean: What do I get back for all the money I spent on you and your social media channels?
If this question makes you desperate for answers, don’t feel bad. We look at several ways to quickly and easily prove your social media ROI.
This is where the numbers part begins, but it’s actually quite simple.
The simplest formula for social media ROI is this.
- Investments : The total cost of your social media marketing
- Profit: The money you made from your social media marketing efforts.
- Profit / Investment x 100 = Social Media ROI in %.
This formula makes it easy to calculate the ROI of paid social media campaigns that are tracked.
- Investments : I spent €2,000 ($2,363.48) on a Facebook ad campaign.
- Profit: Thanks to this campaign, I got 10 customers who spent a total of €7,000 ($8272.18).
- Profit/Investment x 100 = 350% ROI … Or I can say I made €5,000 ($5,908.70) profit after advertising costs.
For service brands, we focus more on lifetime value (LTV). This is not a one-time purchase, but a payment over several years. For example, a customer paying $5,000 per month for 10 years has an LTV of $600,000.
It gets more complicated when it comes to organic social media or social media with less tangible value.
For example, working with influencer marketing can attract sales over time. Or a video you uploaded that got a lot of likes. Has this contributed to your company’s revenue growth?
As social media becomes more and more data-driven, we need to do more than just manage channels and measure success.
So how do you prove the return on investment of social media?
Only 28% of companies believe they can assign value to business results achieved through social media.
The definition of KPIs (Key Performance Indicators) is useful in this context. This will help you keep track of your social media activity and spending. Key performance indicators also help determine how social actions align with business and departmental goals.
Determining your monetary investment in social media is like committing to a dollar amount for your social media goals.
To start, we always ask our clients what their key performance indicators or social media goals are. Usually you measure with key performance indicators:
Below is a brief description of the meaning of these indicators:
- Reach means the number of people who have seen your message.
- Engagement can be determined by a number of actions, such as. For example, based on the number of likes, comments, shares or followers that your message receives. Basically, it’s any action someone takes after seeing your message.
- Prospects are not necessarily people who say they want to buy your product. This could be a subscription, a newsletter signup, an e-book download, or anything else you can use to attract potential customers.
- Conversion is probably the most important key performance indicator. This is the number of clicks on the link and subsequent sales from people who have seen your message.
The ROI of social media can be easily calculated based on conversions and leads. However, it is more difficult to demonstrate a return on investment in awareness and engagement.
Your post got a very high engagement on Facebook, but what happened next? His Instagram video has gotten a lot of views….. But how does that translate into monetary value?
The short answer is that you cannot calculate your return on investment with complete certainty.
That’s not to say that stats like the number of views of Instagram videos aren’t very useful for getting a general idea of the popularity of your campaigns. Use vanity metrics to inform future content and social media decisions. Clients like to see an overview of all metrics when we create monthly reports.
Make sure Facebook retargeting is set up correctly.
Facebook retargeting, often called remarketing, means that if someone interacts with your brand online but doesn’t convert immediately, they will see your business or products when they log back into Facebook.
Keep in mind that third-party cookies will disappear from Chrome sometime in 2021 (Google announced this in January of this year). Additionally, Apple’s latest version of iOS 14 could affect retargeting on Facebook and other platforms.
If there’s one word that’s sure to put a smile on your customer’s face, it’s conversion.
In marketing terms, however, conversion is not just about making a sale.
Conversion is the process by which a customer takes an action that you track through your analytics dashboard.
The sales funnel is often longer, as a potential customer may see your brand multiple times before contacting you.
The conversion can be done in one of the following ways:
- Subscribe to your newsletter
- Fill in the contact form
- Downloading an eBook
- Add an item to the cart
- Purchase of a good or service
But how do you know if the leads you send via social media are converting? You define the tracking pixel.
Pixel tracking allows you to establish tangible and measurable actions for your social media audience. You will then receive a notification via the notification box when the social media user has completed the action.
Setting up a Facebook Pixel is easy. All you need to do is integrate a line of code into your website, which then connects to your ad interface.
Once installed, Pixel tracks conversions, retention and customer value.
You can set the Twitter count pixels by selecting one of the following options.
- Universal Site Tag : A single piece of code that can be placed anywhere on the website to track multiple website actions or conversions.
- Site marking for one event: A single snippet of code that you can use to track a single conversion on your website.
Most advertisers use a universal website tag because it simplifies the tagging process and allows you to track the user’s journey through your website.
Yes, you can do the same on LinkedIn.
Social media ROI is easier to demonstrate on this platform because ads are tied to conversions, including those of people who just viewed your ad. You can see how your ads have led to actions on your site, including content downloads, registrations, purchases, etc.
If you want some more information on the indicators you should be following, we offer an in-depth dive into indicators for. :
You can also read an overview of social media metrics.
What is your CPC (cost per click)? It is easy to find for all major social media platforms. Just go to Analytics/Ad Manager and check a running campaign. (On Facebook, we talk about cost per result because it can refer to different actions performed, not just clicks).
This is a simple visual representation of how much it costs your company to perform each action for each fan.
For example, the Keith Financial Services ad below cost us $0.15 (.18 cents) per click on the landing page.
- 742 people clicked on the landing page of this ad.
- The campaign URL for this landing page is tracked. So when I look at the Google Analytics dashboard, I can see how many of the 742 people who visited the landing page became customers.
- In terms of conversions, we consider agency direct contacts to be conversions. Brands that sell tangible goods associate conversions with checkout.
- We also see that the reach was 14,569 and the number of impressions was 52,825. But for CPC purposes, we are only interested in clicks.
When you create a campaign, especially a paid campaign, you should create unique URLs for each channel, even if they all lead to the same landing page.
This way, you can not only track the success of the campaign, but also show which network produced the best results.
If you’re not careful, web traffic from your social media campaigns can be misinterpreted as direct traffic in Analytics. Or it’s just merged with social traffic, without breaking it down into campaigns, ads or article links.
You want to be able to see this to report on campaigns that led to traffic and conversions.
Many clients contact us with a spreadsheet of tracked links that we will use in their articles. They do this to track the return on investment of social media on their site.
First, you need to create individual URLs for each link you post on social media. So when someone clicks on a landing page, video, e-book, etc., you can determine exactly where they came from.
You can use the Google Campaigns URL builder to create unique URLs for free. All you have to do is fill in the basic details of your campaign. Look below to see what it looks like:
You will then receive a unique URL to use on your social media channel, which will look like this
As you can see above, you have the option to convert the URL into a short link. Use this URL for any related social media promotion you do for this channel.
You will then be able to accurately track all conversions achieved as part of your proven social media ROI.
Be sure to keep your custom URLs handy for future articles. This can be done with the help of the practice sheet.
You can also skip this extra step by using Agorapulse UTM tracking. With this feature of Agorapulse, you can track all your links and easily demonstrate the return on investment.
You create your message as usual through Agorapulse, then activate UTM tracking as shown below. You can also use the Bitly integration to shorten the link.
Agorapulse users can add a Bitly account to any network they use.
Choose whether you want to enter your own values (Text) or have Agorapulse fill the fields (Dynamic). If you are granting access to more than one network at a time, select the Dynamic option. That way, you can choose the right social network, media and social profile to add the tag to.
With UTM tracking, you can track the lifecycle of customers.
For example, you can see if a large number of people click on your links, add an item to their cart, but then abandon the purchase. You will then be able to draw conclusions about the causes.
If you have your tracking link set up correctly, you will be able to see the results of each campaign in Google Analytics.
It’s one thing to know that you got a high return on your social media investment. Proving and presenting it is another matter.
Reporting on social media is often a sore point for agencies. Collecting social media statistics from multiple channels, extracting their key performance indicators and turning them into a nice report usually takes hours.
According to a recent survey on social media, 31% of marketers spend up to 10 hours on reports, while four hours is considered normal for the industry. This applies to one set of reports only.
With the integrated Agorapulse reporting system, data collection takes about 5 minutes!
In my experience, agency clients want clear, straightforward reporting across all their channels. An overview of what you’ve done, what worked, what didn’t, and how their channels are evolving.
Agorapulse’s baseline report includes the following measures:
- Account growth
- Demographic characteristics of the public
- Content Overview
- Management of the Community
- Best time to publish
The Agorapulse Power report has many more options that can be accessed from the Create a Report tab at the top left of the dashboard. They are ideal for creating multiple reports across multiple channels and provide an in-depth view of your social media metrics.
An individual report for each channel contains all this information:
Let’s take a look at some of the specific social media ROI metrics available in the Agorapulse reports.
Does Agorapulse offer a return on investment calculator? These tools are a marketer’s dream.
Just enter your data and the calculator will add the ROI to your custom report!
Agorapulse allows you to link your advertising accounts. Allows you to track ad responses and view statistics and results.
To do this, simply enter the Facebook/Instagram Ads token and link it to your profile.
Agorapulse is super advanced in this regard, as multiple administrators can link their ad tokens and select an additional ad account. This allows the panel to receive feedback on ads from different ad tokens and ad accounts. Any user can see, but not change, other users’ ad settings unless they have the admin role in that ad account.
Part of proving ROI to a client or boss is proving the amount of content created.
This is clearly shown in the monthly reports.
For one of our clients, for example, 202 tweets were published in June.
You can also report on the responses sent and how quickly they were received. Allows brands to see how many sources (owned or engaged) are active on social media.
When talking to clients about the ROI of social media, it’s helpful to compare time frames.
For example, here are your results for July 2021 with agency versus July 2020 without agency. Or Christmas campaigns in 2021 versus Christmas campaigns in 2020.
With Agorapulse, you can easily compare any time interval in the reporting option, as shown below.
At Contentworks, many of our clients work in the financial industry, and competition is fierce. They want to see how their competitors behave, which we can show them thanks to Agorapulse. It’s not really a return on investment, but clients like to see tangible changes in this area.
These are just a few of the great social media ROI tools Agorapulse offers. And of course, they can be scheduled to be sent to customers each month. The reports are easy to understand, well presented and ready in about 5 minutes.
To keep your customers in the loop (and to make sure you get a good return on your social media investment), it’s a good idea to run regular monthly reports. You can also send your own findings by email.
The best content and posts that get the most clicks can form the basis for future content and ad spend for each channel.
Ensuring a solid return on investment in social media doesn’t just benefit the brand. This will benefit you as a social media manager or agency.
You can benefit from a successful campaign, excellent customer support and a team of talented writers and designers. Without them, you have no idea how good your work is.
When I started as a social media manager in 2012, I remember asking myself this question. Social media managers often don’t want to focus on ROI because they are creatives. They are the ones who create the content for the channel, answer fan questions, track trends and coordinate design.
They are generally not data analysts.
The role of data analytics for social media has only recently become known and is generally only available to large companies.
Today, as the director of Contentworks, I know that brands are investing in social media more than ever. You want to know the cost of agency services, design, video, content, and that’s before you even think about advertising costs.
- 58% of marketers say they need to demonstrate a return on their social media investments before they can spend money in the future, but only 37% are very comfortable with this.
- Marketers who calculate ROI are 1.6 times more likely to receive higher budgets for their marketing efforts.
- 72% of the best performing companies calculate a return on investment in content marketing, compared to 22% of the worst performing companies.
Customers need to be confident that their social media efforts are paying off. And some want to go further to understand exactly what works and what doesn’t.
That’s why measuring social media ROI is essential to your social marketing strategy, even if you’re using primarily organic marketing.
Are you ready to take control of your social media and demonstrate a return on your social media investments? Start your free trial of Agorapulse here!
Frequently Asked Questions
How do you prove ROI on social media?
ROI on social media is difficult to measure.
How would you define an actionable social media ROI for your business?
An actionable social media ROI is the return on investment that a business can expect from its social media marketing efforts.
Is it possible to accurately measure social media ROI?
Yes, it is possible to measure social media ROI.
Feedback,social media roi statisticssocial media roi meaningsocial media roi formulasocial media roi calculatorsocial media roi exampleswhat is social media roi,People also search for,Privacy settings,How Search works,social media roi statistics,social media roi meaning,social media roi formula,social media roi calculator,social media roi examples,what are the two components for calculating social media roi?,what is social media roi,average roi social media marketing