How to Determine the Value of Your Social Media Efforts
You can measure social media ROI (return on investment) to show the amount of value generated by your investments in social media. It will let you know how ad spending and customer conversion or lead generation are linked.
Why should you measure ROI on social media?
- It allows you to track the value of your social media effort
- It allows you to identify which efforts are most successful and improve those that aren’t
- It helps you make informed budget allocations for social media
How do you measure social media ROI?
There isn’t a one-size-fits-all method to measuring social media ROI. It depends on your goals. So, the first step is to establish your goals for your social media campaigns. For example, these could be:
- To build a community, where engagement and conversations are a priority.
- To get traffic to your website, where click-through rate (CTR) and link clicks are a priority.
- To get customer leads, where conversations and contact details are a priority.
- Building brand awareness, where impressions are a priority.
Common metrics you might measure include:
- Conversion rate
- Engagement rate
- Link clicks
- CTR and website traffic
If you are a small business with low volume social media activity, you can simply find the metric that fits with your goal and divide your spending by that metric. If you’re tracking leads, divide the cost of your campaign by the number of qualified leads (like conversations) to get the cost per lead. This can then be tracked all the way to customer conversion to get cost per new customer.
But depending on your goals, and as your company grows, you are more likely better off using a service that does most of the work for you.
With relevant quantitative data, Google Analytics is one of the most powerful tools to measure the ROI of your social media campaigns. It helps you quickly identify which social media platforms drive the most traffic and which content is getting the most traction.
By tracking results such as website visits, page views, and conversions, you can see which campaigns are attracting and converting visitors.
Is your social media marketing primarily done through Instagram? Then a savvy, Instagram-first platform like Sked Social could be the tool for you.
Hootsuite’s social ROI calculator gets the math done quickly and effectively.
Simply input your expenses (like total ad spend) and compare them with relevant metrics like conversions, website traffic, brand awareness, or audience engagement. This information can help you in making better decisions about where to allocate your marketing expenditures in the future.
If you aren’t familiar, the Facebook Pixel is a piece of code for your website that monitors insights from Facebook ad campaigns.
To start measuring conversions more accurately, you must first install the Facebook Pixel on your website. Next, install your conversion events (i.e. the end goal you want your customers to take), insert the code into your website, and input any necessary information.
Under the results tab, you’ll see a list of all the conversion events you have set up. For each event, you can view how many conversions occurred as well as the total value of those conversions.
Lastly, don’t forget to understand your channels.
Calculating how your social media efforts perform also includes figuring out which channel works best for you. For example, LinkedIN can be great for certain types of businesses, particularly B2B, for generating leads, Instagram can be great for creating brand awareness, Facebook has a massive reach, and YouTube is essential if your business produces video content.