You have been consistent with investments on social marketing and might even consider raising stakes soon. But, is the campaign delivering versus your objectives? If you are struggling to quantify the impact of social media on your business, you’re not alone. Per an MDG Advertising study, 44% respondents failed to measure the impact, 20% were never able to quantify it and 36% possessed a qualitative sense of it but couldn’t put it in figures.
What is Social Media ROI?
The value generated by social media when quantified is known as Social Media ROI. What you get is a set of clear, actionable metrics on how the social campaign fared across parameters and channels. Do it yourself or ask your social media agency to do it for you, the choice is yours.
Why do you need to measure Social ROI?
Measuring Social ROI is the Holy Grail of the marketing world and the priority for businesses, big or small. If you are yet to prioritize Social ROI, it’s time to get nosy. Here’s why.
• Measurable outcomes tell you what’s working and what’s not. When that happens, you can easily alter your social marketing strategies for better targeting and increased ROI.
• When the quantification is readily available, your approach to social changes. Now you can justify existing social media investments and pitch for increasing spends in future.
• With key social performance metrics in hand, you can innovate ways to decrease or optimize the cost of reaching the target audience and bring efficiency into the campaign.
• Thanks to Social ROI, you tend to better understand the target audience. Once you know their preferences and behaviour, driving customer engagement is easy and quick.
• If it’s hard to choose between organic and paid marketing to pivot your social campaigns, Social ROI is here to give day-to-day insights for informed decisions.
How to measure Social ROI?
Measuring Social ROI is simple when net profit is the only parameter. Just divide Profit by Investment and multiply by 100, you’ll get the Social ROI percentage. Here, profit is the money generated by social marketing while Investment is total spends on the ongoing social campaigns. The higher the Social ROI, the more efficient the campaign is and vice versa.
While revenue is the standard parameter to calculate Social ROI, businesses often evaluate the investment versus factors like website traffic, brand awareness, customer engagement, lead generation, customer acquisition, customer satisfaction and more. Many of these factors are unquantifiable, making it hard to calculate Social ROI.