You’ve spent hours crafting the perfect social media strategy, capturing Instagram content, and curating the perfect feed aesthetic. While all of these things are crucial to a killer Instagram brand, there’s one major piece missing: how will you know if it’s working?
Brands allocate massive budgets to digital marketing nowadays, but a handful are still not measuring the value created from social media. As a marketer, you need to know the time and money you invest in social media are worthwhile.
Measuring organic social media performance can be tough since the output isn’t always tied to specific CTAs or attribution links. But this isn’t an excuse to ditch marketing ROI altogether. In fact, it’s a critical part of any social media manager’s job.
Measuring your ROI allows you to understand the effectiveness of your marketing efforts, refine your strategy, and demonstrate the value of social media to your client or team.
By the time you finish this guide, you’ll have all the metrics and tools you need to prove your ROI for Instagram and ultimately, become a better marketer.
What is Instagram ROI and why is it important?
ROI stands for return on investment. Instagram ROI specifically can be defined as the value generated by your investment in Instagram and the effect it has on your bottom line.
Social media ROI measures all social media actions that create value and compares that to the investment put in. After all, you want to show people that the resources they put into social are worthwhile. It’s not all likes and views either. People want to see tangible results for their business.
While ROI is typically a monetary value, there are cases where the direct impact on revenue can be difficult to credit to a single post. This is where ROI can be defined by non-monetary metrics. These include brand awareness, social influence, and the emotional sentiment and attitudes your followers have towards your brand.
And unlike social media platforms like Facebook and Twitter that offer plenty of metrics and insights for social media marketers, Instagram wasn’t exactly built with marketing in mind. Before it evolved into what it is today, it was a photo-sharing app for friends to share artistically edited photos. The result? It can be tricky to measure your Instagram success without a proper plan in place.
We’ll walk you through how to calculate your ROI and what metrics you need to do it.
How to Calculate Your Instagram ROI
To kick things off, here’s a simple formula you can use to calculate your Instagram ROI:
(Value achieved – costs) / costs x 100 = Instagram ROI
We like this formula as a starting point because you’ll end up with either a positive or negative number. An ROI greater than 0 means your investment in Instagram is paying off. An ROI lower than zero, or a negative ROI, means your costs outweigh the value being generated.
The above formula seems simple enough. But how do you assign a number to the value you’ve created from organic Instagram efforts? While the investment or monetary costs are easier enough to calculate, there are plenty of ways to gauge success on Instagram, not all of them tangible.
Here’s how to break down your Instagram costs and value:
The Costs of Instagram Marketing
Like anything in business, you have to invest time or money to make money. This is done in the hopes that your investment will pay off as your brand’s profile grows and new customers or clients discover your brand.
Here are a few of the costs associated with Instagram:
- Content creation: in-house or external content creation, including working with creators or influencers;
- Social advertising budgets (e.g. Facebook and Instagram ads);
- Employee salaries or contractor wages;
- Education and social media courses;
- The cost of tools or subscriptions for managing your social channels;
- Audience research or social listening tools;
- Agencies or consultants, if you use them.
Add these items together. This should give you an idea of the costs you’re sinking into Instagram marketing. Track these numbers in a spreadsheet and regularly revisit it to ensure that your numbers haven’t changed drastically.
Measuring the Value of Instagram Marketing
True Instagram ROI is only achieved when you can show how it connects to the bigger picture. This means that before you calculate the value gained from Instagram, you need to set clear goals and objectives that connect to your overall business goals.
Here are a few areas to consider:
- Conversion rates (lead generation, email signups, sales)
- Brand awareness and reputation
- Audience engagement and brand loyalty
Every brand is different and your goals will be too. For instance, engagement is the most common metric (36%) for content marketers, while conversions (17%) are the fourth-most-common metric.
Unlike conversions or sales, metrics like engagement don’t always have a clear dollar value. However, it’s clearly meaningful since brand awareness is a top priority for many marketers. Growing brand awareness signals that your Instagram efforts are resonating with your target audience, and will lead to real dollars down the road.
At the end of the day, you have to take an up-close, honest look at what’s important to your business. Determine your desired outcomes from Instagram, and then define value based on those outcomes.
Metrics for Calculating The Value of Instagram
By this point, you should understand why measuring your Instagram ROI is so important. So let’s get down to the nitty-gritty. What metrics can you use to assess your Instagram performance?
Ultimately, the success of your social media strategy hinges on two types of metrics:
- Tangible or measurable metrics
- Intangible metrics
Tangible Metrics for Measuring Instagram ROI
Ever heard of KPIs? Key performance indicators, or KPIs, are the bread and butter of digital marketing. These numbers provide solid evidence of your work’s worth.
Most of these metrics can be found within the built-in Instagram insights platform. But you can also use a more advanced social media tool to access more detailed analytics.
Here are some of the most critical KPIs for Instagram:
How many new followers are you gaining each month? Over time, your number of followers should steadily increase as you build your brand and establish your business within your industry or niche.
The speed at which your audience is growing is your Instagram account growth rate. You can calculate it on a daily or monthly basis. Simply divide the amount of new followers gained over the timeframe you’re looking at, and multiply by 100.
Growth rate goes hand in hand with organic reach. If your growth and reach are increasing at a similar rate, there’s a good chance the growth is authentic. If not, it could mean that the followers you’re gaining are bot accounts or your following isn’t engaged, which won’t do you any favors in the long run.
In this scenario, evaluate the types of content you’re creating or the accounts you’re engaging with from your brand account. This could give you a clue about the kinds of followers you’re attracting.
If you’re running paid ads on Instagram, you should see your follower growth spike even more. Otherwise, it could signify that something isn’t working and you need to adjust your campaign.
Reach and Impressions
Brand awareness and reach go hand in hand. Reach refers to how many new accounts view your content, while impressions are the number of times it is viewed. The more eyes on your content, the greater the odds of people learning about (and buying!) your product or service.
Not only is awareness good for your brand, it also pleases the Instagram algorithm. Instagram’s algorithm is designed to show us more of what we want and less of what we don’t want. That means if your content is reaching your desired audience, there’s a higher chance they’ll continue to see your content in the future. And the more familiar people get with your brand over the time, the more inclined they are to purchase from you.
Reach and impressions are easily accessible inside your Instagram analytics dashboard. You can see how both individual Instagram posts and your overall profile are performing, which will inform the types of content you’ll create moving forward.
Engagement such as likes, comments, shares, and saves are a fantastic way to tell how engaging your Instagram content is. Don’t just pay attention to the likes. They might be nice to see, but engagement metrics like comments or shares demonstrate that someone actually took the time to engage with your content.
Shares and saves are another underrated metric. A share gives your Instagram posts the potential to reach a much wider audience, while saves indicate that someone found your content interesting or valuable enough to bookmark it for the future.
If you notice comments on your post starting to increase, this is usually a positive sign that you’re building a community that wants to connect and engage with your brand. Keep an eye on the sentiment of the comments though. If the number of negative comments outweighs the positive, it might be time to make some changes.
Clicks and Traffic
Metrics like comments and likes are a great mood booster, but clicks are the next step up in measuring potential conversions. This is where your social media marketing can turn into sales. It’s also where you have the best chance to showcase your ROI.
If your goal for Instagram is to get people to visit your eCommerce store or another landing page, tracking clicks is essential. You can do this through something called your click-through-rate or CTR.
Calculate your CTR by dividing the number of profile or post views by the number of clicks. Or, if you’re looking at Stories specifically, you can track how many clicks your link stickers are getting vs. the number of views.
Along with clicks comes website traffic. Tools like Google Analytics or UTMs – unique links that track the traffic source – can help you determine how many website visitors are coming through your Instagram profile. You can build UTMs easily using Google’s campaign builder tool.
Although UTMs are an essential part of digital marketing, they can be a hassle to update frequently. Never change your Instagram bio link again with a tool like Sked Link that allows you to add buttons to anywhere on the web within a curated gallery of your Instagram posts.
Intangible Metrics for Calculating your ROI
Data and numbers are a great starting point for measuring ROI. But they aren’t the only thing that matters.
Intangible metrics might be harder to calculate, but they’re just as important in the grand scheme of your business.
Here are some of less tangible metrics to keep an eye on:
Building Brand Awareness
In a dream world, it would be great to track every interaction a potential customer has with your brand through a link click or a profile view. But of course, there are plenty of other ways brand awareness can occur.
Perhaps someone discovered your Instagram store by watching a popular influencer’s video reviewing one of your products. Or maybe they stumbled upon your profile through a popular hashtag (more on hashtag strategy here). These kinds of things can be harder to measure, but can’t be overlooked.
Every brand wants to get discovered. And there’s no better time to use Instagram to do it. The days of customers finding businesses solely through Google search are gone; millions are discovering new brands on social media daily. Instagram users are constantly following accounts whose content they enjoy, or being introduced to businesses through hashtags or the Explore page. Let’s give credit where credit is due and recognize Instagram for the dynamic discovery tool it is.
One of Instagram’s greatest gifts to marketers is providing a direct line of communication with your customers. Think about it. At some point, you’ve probably DM’d a brand account, whether it’s to ask a question, compliment their content, or something else.
Due to privacy laws around advertising, this kind of direct interaction is rare on other platforms. Make the most of it and find ways to gain value from online conversations with your audience.
For instance, roughly 80% of users search Instagram for information, and 78% favor accounts or brands that are more active. Look at metrics like how many direct messages your account receives per week. Pair that with goals like average response time to ensure you’re interacting with customers in a timely and meaningful way.
Direct messages are only one means to communicate with your target audience. You can also speak to them on a more subtle level through well-crafted creative like images and videos, and captivating messaging.
While excellent customer communication might not always impact your bottom line, it’s the best way to show people that you’re dependable. This build trusts in your brand, and greater trust = more sales down the line.
Brand Loyalty and Brand Affinity
Instagram gives you a powerful opportunity to build brand affinity and loyalty with your audience. Brand affinity describes customers who believe a brand shares common values with them, while brand loyalty is a positive association customers have with a product or brand.
Together, affinity and loyalty inspire people to purchase or choose you over a competitor. And we’ve got the data to back it up. 56% of customers said they remain loyal to brands who “get them”, while 65% of most companies’ business comes from existing customers.
Visual communication is one of the best ways to communicate your values and build connections with your audience. Photography and videography resonate differently from written word. The best visuals can help tell your brand story, communicate your purpose, and create a positive perception of your brand.
Pay attention to the users who interact with your content over and over. These are likely the people with whom you’ve built a strong relationship and are more likely to become repeat customers thanks to your Instagram marketing.
How to Measure the Success of Instagram Stories
Instagram’s native analytics platform offers detailed insights about story performance. You can view metrics like how many people watched your story all the way through, how many followers you gained from a story, the number of clicks on your link stickers, and so much more.
Take note of the percentage of people who watch your story from start to finish. While it’s normal to see a slight dropoff the longer your story, a large one could signal that your stories aren’t engaging enough.
To figure out your completion rate, divide the number of people who viewed the last post in your story by the number who viewed the first one, then multiply by 100.
On top of completion rates, look at metrics like reach, new follows, link clicks, and profile visits for stories specifically. You can even track specific profile actions like call and email button taps that come from a story. These numbers help paint a more complete picture of what content is driving the most value for your business.
3 Proven Ways to Boost Your Social Media ROI
So you’ve calculated your ROI and it turned out to be lower than you expected? Don’t throw in the towel just yet!
If you’re looking to turn that negative result into a positive, here are some instant actions you can take to improve your Instagram ROI:
- Consider running paid ads or influencer marketing campaigns to boost awareness and drive sales.
We hate to admit it, but sometimes organic reach isn’t enough. Instagram’s algorithm is forever stumping marketers, making it increasingly difficult to achieve organic reach. Paid campaigns allow you to track conversions directly, so you know precisely what content or messaging is responsible for bringing people to your page.
Influencer campaigns can also do the trick. According to Influencer Marketing Hub, 93% of marketers have opted to include influencers in their marketing strategies. And it gets better – 89% of marketers find the ROI on Instagram influencer marketing comparable or better than other marketing channels.
By partnering with an influencer whose audience closely mirrors your own, you can reach more people and lean into the influencer’s trust with their audience. You can even generate a unique link or code for influencers to use, so you can attribute sales with greater precision.
Get the full scoop on how to calculate your Instagram influencer marketing ROI here [link to influencer ROI article].
- Look at the broader social conversation.
The social media landscape is ever-evolving. Just a few short years ago, mega-platforms like TikTok didn’t even exist. With the rise in popularity of short-form video like Snapchat and even streaming platforms like Twitch and Discord, there are always new ways to generate interest in your brand.
Look at where your audience is. Are they primarily using Instagram, or are they dabbling in other platforms? If so, it might be time to diversify your social media strategy to connect with potential customers outside of Instagram.
- Don’t get too hung up on the numbers.
Remember that short-term ROI is precisely that: short-term. The formula above doesn’t always consider what makes your brand valuable and unique.
In addition to short-term ROI, evaluate your long-term ROI. Sure, jumping on the latest trend might give you a quick boost in results. But if it doesn’t fit your brand’s voice and values, your audience will deem it as inauthentic and lose trust in your business.
Focus on the big picture and providing meaningful value to your Instagram followers. This is a surefire way to guarantee a positive ROI and build sustainable, long-lasting relationships with your customers.
Improve Your Instagram ROI with Sked’s Instagram-First Tool
In 2022 and beyond, social media marketing will continue to evolve towards a future where businesses can more accurately quantify the value of social media.
In the past, merely having a social media presence was enough to get by. But nowadays, businesses are more strategic with their marketing dollars and want to ensure their Instagram efforts are worthwhile.
Become a star social media marketer by using an Instagram-first tool to measure your ROI. Tools like these pick up the slack where Instagram’s built-in analytics fall short, and help you better understand how your audience engages with your brand. You can then use this invaluable data to make decisions about how to maximize your social media returns.The top social media tools give you Instagram analytics you can put into action. An Instagram-first tool like Sked Social provides data-drive and statistics-backed analytics to help maximize your Instagram ROI. Find the best time to post, analyze your Instagram Story performance, compare your activity against competitors and more. Try out a free 7-day trial to access detailed insights right away.