Calculating the ROI of Social Media
Calculating ROI for social media, unlike others things may seem less clear cut. Being apart of the marketing game, we’ve heard countless…
Calculating ROI for social media, unlike others things may seem less clear cut. Being apart of the marketing game, we’ve heard countless frustrations from clients on the subject. Sorting through numbers can be a pain, but calculating ROI from social media is an achievable task!
Identifying ROI
Social media ROI can be easily defined as getting back the money and time spent on social media strategies. Many businesses and companies use ROI as it’s a key role in finances. You can’t really to attach monetary value to status updates or uploading photos. So, to keep track of the ROI you need to identify how much you are investing in social and then add a dollar amount of what you wish to gain from social.
Measuring ROI
As we know, ROI is the return of your investment you put into something. So to measure ROI you can apply the equation of
ROI = (Return-Investment)/Investment.
Calculating Output(or return)
Finding the return is really the hardest thing to figure out in social media ROI. The reason for this is that the return means different things to different people. Conversion goals must be defined to be able to calculate your return. To calculate your return you must first ask yourself what your goals are from implementing social media strategies. Once that is decided, the next question to ask is how much those goals are worth. By asking these questions you can form how much to invest to get the desired return. This all can be broken down into just a few easy to follow steps.
Step one: Form a goal
Your goal can take the form of many different things.
New followers
Purchases
Email sign-ups
Site visits
Etc…
To better organize them set them into steps!
Step two: Keep track of your goals
Pick one or a few of the above goals, or form your own, and begin to track them. You can track using Google Analytics for website related actions. And for the social platforms you can check using their site analytics.
Step three: Give value to things
Once you’ve completed the other steps, the last thing to do is assign values (preferably monetary) to them. There are a few different methods to pick from.
Lifetime value: The average of what you earn from a consumer
(Lifetime value)(conversion rate): How much is every potential visit worth?
Average sale: How much is the average purchase on your site/store?
PPC costs: How much would you have paid for ads to get the same result from social?
Calculating Investment
To calculate your investment there are a few different things to include.
Time: (Labor costs)(hours committed) is how to measure this over a certain period of time.
Tools: Add up all the costs of tools and services you may be using.
Advertising: Amount spent on boosting and promoting posts
Add up these three categories and you have yourself your investment.
Wrap Up
When it comes down to it, you just need to establish clear goals and track them to calculate social media ROI. Putting in the extra effort to add social to your marketing plan does not go in vain. Today, social media holds great influence in consumer’s lives and is an essential element to any marketing plan. According to @SMEXAMINER — 50% of brands source increased sales and revenue to social media.
The truth is in the numbers, social media can’t be forgotten when planning your marketing. Luckily enough, @GoodAudience we strive to dish out the best plan for your investment. Sign up online on http://www.goodaudience.com/ for a strategy sesh with us!