Measuring Social Media Marketing ROI: What’s the Real Value of Social Media?
Facebook, Twitter, Instagram, LinkedIn – these platforms, and countless others, have become a routine part of our everyday lives. So for many businesses, it seems like a no-brainer to invest in some sort of social media marketing. But with so many moving parts, how do you measure the real value of social media? How do you know you’re getting a good return on investment?
Measuring Social Media ROI
Before you can determine whether your campaign is successful, the first step is to determine what, exactly, you’re trying to accomplish. What are the objectives of your social media marketing campaign? Often times, it’s all about the bottom line, and measuring social media ROI comes down to the amount of revenue earned from the campaign, versus the amount spent. So, for example, if you’ve spent $500 on a Facebook advertising campaign and then generated $1,000 worth of revenue in return, your social media return on investment is $500; or in other words, you have achieved a 100% ROI.
But not all social media marketing ROI is based on dollars and cents. Many businesses focus very little on direct revenue generation and instead use their social media platforms to increase brand awareness or strengthen engagement with their target audiences, both of which can be incredibly valuable to the overall growth of a company. But this, of course, begs the question: If not in revenue, how do businesses measure social media ROI? Fortunately, many social media platforms provide built-in dashboards that provide insight into a wide array of analytics, and these tools allow businesses to track things like budget spent versus page and post likes, shares, reach and views.
In these cases, measuring social media ROI is, admittedly, quite a bit like comparing apples to oranges. It means considering the ratio of gain (in terms of number of new followers, for example) versus cost, which includes not only your social media advertising budget, but also the time and labor spent on creating, launching and managing the campaign. As such, measuring your ROI, and then learning how to maximize it, will require you to determine just how much each of those new followers is worth to your individual business – a completely subjective determination.
The Real Value of Social Media
Even if you can’t always measure its value in concrete numbers, social media marketing is an incredibly powerful part of the overall digital marketing sphere. Each time you share a post or launch a new social media marketing campaign, you put your brand in front of your audience in a new way and give them another opportunity to see you, learn about your business and engage with you.
There’s also something to be said for the relationships these platforms allow you to build with your audience. With every post, you are given the opportunity to interact directly with your consumers and learn more about who they are and what drives their spending.
For additional insights into social media ROI metrics and how to assess them, contact Paradigm Marketing and Design today to schedule a consultation.