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Need to know what your social media work is doing for your brand? This is what you should do.
You can post on social media until the cows come home, but how do you know that it’s actually doing anything? For all you know, your business could be posting into the void, day after day, without influencing lead generation, sales, or seeing any real progress at all. That is why measuring social media ROI – or return on investment – is so important.
Or perhaps you’ve been asked to present social media ROI reports to your digital marketing team, your superiors, or your brand manager and you’re panicking. The basics of social media reporting, like comments, likes, and shares, are all easy to report on. But, when it comes to attributing traffic, leads, and conversions, and providing a figure for social media ROI, that’s where things can get tricky.
And sure, it does take time to see results on social media. Each business has its own unique objectives on social media, and they might not all be about making money. That means that not every single post needs to result in a sale – and it probably won’t! Yet, at the same time, measuring ROI can be a helpful way of finding out the role of social media within your business, defining its value, and understanding how it fits into your wider marketing mix.
Measuring social media ROI is a daunting task and, for many of us, it’s not entirely enjoyable! If you’re struggling to come up with the right social media metrics and define your social media ROI, we can help!
Read on to figure out how to transform that jumble of numbers into meaningful social media ROI reporting data.
Why Measuring Social Media ROI Matters
There are many businesses out there who pour hours and hours into their social media management and don’t see any meaningful results.
It makes sense. After all, unlike other digital marketing channels, at the surface level, social media seems easy enough to understand. Most of us all use it in our personal lives. We create posts, share them, and wait for the “likes” to roll in.
But social media isn’t that simple, and the effects of social media can take longer to show than other channels. Social media marketing is also harder to track than a lot of other digital marketing activity because much of it is organic.
What many digital marketers and business owners don’t understand is that social media requires an all-encompassing strategy. Your social strategy should identify your business’s social media marketing goals and outline how you’ll achieve them.
Measuring social media ROI has always been a tricky beast, but demonstrating your social media ROI can help you:
- Show your business the value of social media marketing for your brand
- Identify which areas of your strategy are successful – and which aren’t. You might discover that one social media network is far more profitable than another, which means you can concentrate your efforts on those high-performing channels
- Inform future budget allocations and hours for social media marketing and social ads
How to Calculate ROI
While ROI isn’t the only metric you should use to measure your social media marketing efforts, it is an important one.
ROI, or return on investment, in social media marketing is a top-line measurement of how successful your social media activity was in comparison to its cost. Marketers have been using this metric since the dawn of marketing, alongside other metrics, of course. So, what is the tried-and-tested ROI formula?
The calculation is:
ROI = [(return – investment)x100/investment]
This should be displayed as a percentage. Sounds pretty straightforward, right? Well, not exactly. To figure out your social media ROI, you need to calculate exactly how much you have spent on your social media marketing, either for a specific campaign, a certain month, or for the whole year. Then you need to work out the return, which isn’t so simple, either!
To calculate your return, you need to first work out what your specific goals are, and how much achieving those goals is worth to you.
For instance, your number one goal might be lead generation or gaining more conversions. You might have a certain cost-per-lead or cost-per-conversion, which is easy to figure out. But how much are those leads or conversions worth to you? Well, you might look at things like the lifetime spend of a customer, or the average sale, to determine how much you typically make from a customer.
For leads, you could also look at how many leads actually translated to conversions. Then you can look at the lifetime spend of each customer and calculate how much each lead is worth. More on this later!
How to Create a Social Media ROI Report
So, how can you create a social media ROI report for your brand? Read on to discover everything you need to know so you can optimize your social media campaigns and set your business up for social media success!
First off, a social media ROI report should include the following:
- Social media goals or objectives
- Social media KPIs
- A summary of your strategy, or how you went about achieving your goals
- Results, both top-line and more in-depth results (where relevant)
- Your ROI
It may also include insights about a particular campaign or an analysis of your reporting results, as well as any future recommendations.
Step 1: Set Your Social Media Marketing Goals
Without setting social media goals, how will you know what you’re working towards? It would be like you’re trying to get somewhere in the dark with no map and a flickering torch in your hand! In other words, you won’t get very far.
Before you begin to set social media goals, think about your business objectives.
Then, consider the role of social media for your business in line with your other marketing channels. Will social media be used mostly for brand awareness, to begin with? Or will it play a larger role?
Some common social media goals are things like:
- Increasing your social media followers
- Increasing your engagement rate
- Increasing brand awareness
- Lead generation
- Newsletter sign-ups
- Gaining conversions
- App downloads
- Content downloads
- Increasing traffic to a site
- Changing brand perception
You might have more than one goal – if so, that’s fine! However, you need to set a goal that is achievable, measurable, and realistic within any timeframes that you set.
For instance, it’s not likely that you’re going to be able to completely change your brand perception after just one social campaign with a low social media budget and no way of measuring your efforts! Brand perception or sentiment can be measured using surveying. But if you don’t have the resources to measure this, how will you track your progress?
Make sure any social media goals you set align with your budget, resources, timeframe, and other marketing channels.
Once you have set your goals, you’ll need to create specific key performance indicators (KPIs) for each goal.
So, if your primary social media goal was lead generation, you might set a KPI of gaining 500 leads per quarter, at a cost-per-lead of $3.50. More on how you can work this out later!
Step 2: Track Your Social Media Expenses
Next up, track all your social media marketing expenses.
You need to attribute a monetary value on everything you possibly can, including:
- Ad costs. This is the easiest expense to track, in some ways! Simply check platforms like Facebook Business Manager to track your Instagram and Facebook ad spend and wherever else you create your social ads. Then export your ad spends for a specific period of time and add the spend together to get your total ad costs.
- Time. This is where things get a little trickier. You’ll need to add up all the time that went into social media. So, that might include things like content creation, scheduling or posting, and reporting.
- Tools. Add the cost of any social media tools or systems you use for social media management.
- Content creation. Do you use freelancers, staff, or photographers to help with content creation? Either way, there’s a cost you can attribute to this, too! Simply add together the hourly rate you use for each team member’s contribution.
- Agencies or strategists. If you use an agency for social media management, add all your agency fees here, but don’t count your ad spend twice!
It’s up to you whether you’d like to measure a campaign, a specific period, or even the entire year. Either way, add up all your expenses to get a total figure.
Step 3: Measure Your Social Media Performance
If you’ve made it this far, well done! Now for the tricky part. Measuring your social media performance will link back to your social media goals – remember those? If not, skip back to Step 1.
Measuring social media ROI means having a handle on exactly which goals you’re working towards, and which social media metrics you’ll use to track those goals.
For instance:
- If your primary goal is conversions, your main metric will be the number of conversions. You’ll also want to keep an eye on metrics like your cost-per-conversion, conversion rate, and average basket size.
- If your primary goal is to increase web traffic, your main metric will be the number of impressions for a certain site or landing page that are coming from social media. That said, you may also want to consider the time spent on page, conversion rates, and so on.
To find the correct data to attribute towards these metrics, you’ll need to use tools like Google Analytics, Facebook Insights, Instagram Insights, SEMRush, or social media tools like Sked Social.
One of the best tools you have in your arsenal is Google Analytics, so understanding how to use and operate it is a definite bonus. It’s also completely free!
Google Analytics can help you pull top-line information for your reporting, like the volume of traffic for your site, or a specific page. Not only that, but it can also help you dig deeper and track more specific goals.
You can use Google Analytics to create all sorts of goals such as:
- Newsletter subscribes
- Viewing content
- Converting from a specific page
Once set up, this will allow you to better track your social media activity and work towards these very specific goals. If you’re new to all this, the Google Analytics Academy provides short training courses where you can learn how to use the platform and set up your tracking.
Next up, you’ll need to assign a monetary value for achieving each goal. But how? Well, you can look at your historical data. If one in ten email subscribers becomes a customer, you can look at the lifetime value of each customer.
So, if your lifetime value is $150 per customer, you would divide the number of subscribers you achieved in the measurement period by 10, then multiply that number by $150 to get the total value.
So, for 12,000 email subscribers, you would use:
(12,000/10) X $150 = $180,000 value.
If you don’t have historical data, however, your job is a little trickier. You’ll need to either do research to find industry benchmarks or simply guess based on how engaged your target audience is.
Or, you could think about how much you’d like to pay per conversion and work backward from there. Remember, you can always adjust your goals for your second campaign or reporting period.
Step 4: Calculate Your ROI
Now that you understand your total social media spend and your results, you can use the same return on investment calculation above to calculate your social media ROI. Calculating the ROI of social media can be complicated, but at the end of the day, it’s simple mathematics!
For a more in-depth analysis, you might want to calculate your social media ROI by channel. This will allow you to see just how effective Twitter may be in comparison, to, say, Instagram.
So, add up your social media expenses first.
For the labor cost of doing social media plus content production costs and ads, you might be looking at $72,000 per year.
Next, look at the results (or value) of your efforts to calculate the overall return. If we use the example above with the email subscribers, we achieved $180,000 worth of value.
Therefore, if we use the same ROI calculation we mentioned earlier, your social media ROI will be calculated this way:
[($180,000 – $72,000)x100/$72,000] = 150%
You can do this same calculation as a whole, or you can use it for all social media channels to identify your best-performing social networks.
Step 5: Use Benchmarking to Assess Your KPIs
Reporting can be super helpful in shaping your social strategy. Some channels have their own in-built reporting functionality which can help you find out more about your audience and your post performance. This can be helpful, however, data is typically limited, as we can see in the Instagram Insights example below.
To really be able to assess the results of your efforts, you should invest in a social media tool. There are plenty of tools out there, but if you’re just starting out or you want a comprehensive tool that does everything, Sked Social is the perfect option.
Sked Social allows you to refine your social media marketing efforts by honing in on what’s working so you can focus on that, instead of wasting your time with content that isn’t hitting the mark. It allows you to:
- Boost post performance by discovering the best posting times
- Find out which types of content and topics are resonating with your target audience
- Get advanced insights about your audience
- Easily track your competition and learn about their best-performing content
- Track profile visits and clicks to your website
Once you have your data, however, you need to crunch the numbers. Apart from your own reporting and past performance results, how do you know what to aim for when it comes to analyzing your brand’s social media performance?
You need to benchmark your own social media results against other brands – ideally within your own industry.
Benchmarking can also help you set your social media goals initially or create your KPIs. So, how do you check benchmarks? Well, there are three ways:
- Check your own brand’s past performance. Look back on your own historical data and check against all your metrics to compare. If possible, try to compare against the same period of, say, the previous year. Try to take any seasonal changes into consideration. For instance, periods like Valentine’s Day might be very competitive if you’re an ecommerce business
- Use Sked Social to analyze your competitor’s performance
- Do your own research online. For the most accurate comparison, try to find the most current data you can find from your own industry
The more information you have, the more confident you can be that you have set realistic social media goals and KPIs and that you’re tracking well against the competition.
It’s important to look at the big picture when it comes to social media marketing. While an ROI report can help you understand how much social media is worth to your business, you need to look at your social media reporting in its entirety if you want to make informed decisions about your digital marketing strategy.
Often, social media marketing is a slow burn. It can take time to accumulate an audience, establish your social presence, and see meaningful success. If you’re just starting out, you can’t expect instant results. You can experiment with all different facets of social media; organic content, social ads, or influencer marketing, and see what works best. The bottom line? Experiment, report, and tweak your social media strategy until you see success!
Ready to Start Reporting?
Measuring social media ROI can be tricky and time-consuming. But to maximize your social media ROI, you need to minimize the hours you spend on social media marketing, including reporting! That’s why social media tools are so important.
Social media analytics tools can help you accurately track the results of your social media marketing. They allow you to see which social media platforms are worth investing in – and which you might want to abandon or put more work into.
It can be difficult to measure your social media ROI without the proper tools! Sked Social’s advanced tracking and reporting functions can help you to pinpoint the weak points in your social media strategy. Over time, you’ll be able to optimize your social strategy for success and maximize your social media ROI.
Now that you know how to choose the right social media channels for your business, why not start carving out hours in your social media workflow, by signing up for Sked’s 7-day trial? Our all-in-one Instagram scheduler allows you to automatically post images, carousels, Instagram Stories, Reels, videos, and more. Tag locations, users, and products, and manage all your hashtags in one place to save hours each week. And it doesn’t just work for Instagram! Use it to schedule for your Facebook page, Twitter, LinkedIn, and more.
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