Brands today are spending more money than ever on online advertising and social media campaigns. And firms invested in social media want to know how effective and profitable their efforts are. By calculating their social media ROI, or the return gained on their investment in social media, organizations can understand how much value is being gained from their commitments to social media. This information enables them to not only evaluate the efficiency and performance of social media campaigns but also justify spending for current and future projects and show various stakeholders in the organization how much social media efforts contribute to their bottom line.
The difficulty of measuring social media ROI
Many firms struggle with measuring social media ROI because it can be difficult to quantify social media returns. It’s not always easy to understand what portion of revenue is attributable to specific campaigns, and not all benefits of social media efforts offer immediate financial gain. Increased brand awareness, for example, can indirectly boost sales, but the effect is not immediately clear. The variables that go into calculating social media ROI will differ depending on one’s business objectives and specific goals for a social media campaign.
How to calculate your social media ROI
Begin by defining what your goals are for a specific social media campaign, such as generating leads or getting mentions for a hashtag and then decide on suitable social media KPIs, which allow you to track and measure your progress in achieving those goals. Social KPIs help you assess the effectiveness of social media efforts and are an essential measure for determining your social media ROI.
To calculate your social media ROI for a particular project or period of time, you subtract your costs, or your total spending on everyday social media efforts or a specific social media campaign, from the revenue or total value (which may not be immediately quantifiable) derived from that effort. You then divide the result by your costs and multiply by 100 to obtain your social ROI as a percentage. The higher the percentage, the better the ROI, or the more efficient your campaign.
In order to assign monetary values to social KPIs that don’t immediately provide you with a dollar amount, you may want to refer to historical data and take into consideration the lifetime value of the customer. For example, you may need to think long-term when estimating how much value an additional follower, response to a questionnaire, or download adds to your business.
Using KPI dashboards to monitor your social media ROI and make smarter decisions
One of the easiest ways for firms to keep an eye on their social media ROI is to leverage social media monitoring KPI dashboards. This type of social listening tool provides sales executives, marketing teams, and other stakeholders with a visual display of changing KPIs, enabling them to monitor and analyze the performance of their social media efforts in real-time. With the right tool, they get quick and easy access to the most relevant metrics and social media insights at a glance—information essential for determining social media ROI and informing strategic decision-making throughout the organization.
Keeping a close eye on your social media ROI with Synthesio’s Dashboards
Synthesio’s dashboards run social listening data through advanced algorithms to show you how your brand, your products, and other relevant topics are performing on various social channels. With our highly customizable dashboard, you can monitor and create charts using the social media KPIs that are most critical for your brand. View mentions of your brand on social media, your changing Social Reputation Score and Share of Voice, and various brand intelligence metrics that enable you to more easily calculate and predict your social media ROI, analyze content performance, and adjust campaigns on the fly using real-time feedback from online audiences.
Social Media Intelligence Guide: Strategies for 8 Different Use Cases
There are a wide variety of metrics used for social media measurement. In general, social media metrics fall into three key areas of interest: brand awareness, engagement, and conversion/lead generation. Some examples of metrics commonly used on social media platforms include Reach, Impressions, Likes, Shares, Engagement Rate, and Click-Through Rate.
What are KPIs for social media?Carmen Yeung2020-02-12T13:31:58-05:00
Social media KPIs are indicators that enable you to measure whether you are making progress towards meeting specific goals for a social media campaign and to determine your social media ROI. Social KPIs help you define success and evaluate the performance and benefits of social media efforts. Some examples include Audience Growth Rate, Share of Voice, Engagement-to-Reach Ratio, Cost-Per-Click, and Net Promoter Score.
What are the relevant metrics for tracking ROI on social media?Carmen Yeung2020-02-12T13:32:05-05:00
Which social media metrics will be relevant for tracking your social media ROI depend on what you’re trying to achieve—your particular goals and business objectives. If your primary goal is to increase brand awareness, you will want to focus on the total number of mentions your brand or campaign receives or the number of times a piece of content has potentially been seen by users. If your goal is to boost engagement, you will focus more on the number of shares or comments on a post, for example.