Guide To Measuring Social Media ROI & Tracking Social Media Metrics

Understanding the real impact of ads and social media on product or brand success means closely examining the Return on Investment (ROI). A higher ROI indicates more significant gains from investments made.

This article will guide you through measuring social media ROI using analytics, explore the advantages of calculating ROI, and offer strategies to enhance the ROI for your platform or product.

What Is Social Media ROI?

Return on Investment (ROI) is a measure used to evaluate the effectiveness of your marketing campaigns in helping your brand meet its objectives. Specifically, social media ROI refers to the benefits you gain in comparison to the time, effort, and resources you invest in social media.

In the context of social media marketing, ROI calculates the net gain from an investment relative to its cost. Unlike simple profit calculation, which just subtracts expenses from revenue, a positive ROI indicates that your campaign generated more revenue than its expenses, while a negative ROI suggests the opposite.

While this concept might seem straightforward at first glance, accurately calculating your social media ROI involves careful consideration of your goals, the metrics you track, and the total investment you make. Before diving into how to measure your social media marketing ROI, it's important to understand the KPIs and metrics that help in getting precise measurements.

KPIs & Metrics That Demonstrate Social Media ROI

1. Boosting Brand Awareness

• Goal: Increase the visibility of your products and brand on the internet and social media.
• Actions: Use ads on Facebook, Instagram, and other social media platforms, engage with journalists, seek sponsorships, and ramp up content production.
• What to Analyze:
  • Social media recognition of your brand.
  • Audience response to your content.
  • Campaign reach and impact.
  • Audience comparison with competitors.
• Key Metrics:
  • Mentions: Frequency of brand mentions and shares on social media.
  • Impressions: Total potential views of your messages.
  • Reach: Unique potential viewership of your content.
  • Visits/Traffic: Website and social media visit counts.
  • Share of Voice: Visibility comparison with competitors.

2. Acquiring New Customers

• Goal: Expand your target audience on social networks.
• Actions: Engage directly with fans, use newsletters, share content, host contests, and focus on targeted, appealing content.
• What to Analyze:
  • Online community size and growth.
  • Comparison of "owned media" share of voice with competitors.
• Key Metrics:
  • Community Performance: Size of your following on each social channel.
  • Community Growth: Rate of audience increase.
  • Channel Shares: Distribution of your audience across platforms.
  • Voice Share: Audience size comparison with competitors.
  • Traffic: Website and blog visits from social media.

3. Enhancing Engagement

• Goals: Build stronger relationships with your audience and increase the number of brand ambassadors.
• Actions: Publish high-quality content, engage in timely topics, promote your brand as an employer, and highlight community interactions.
• What to Analyze: Interactions between your brand and online communities.
• Key Metrics:
  • Engagement: Number and growth of interactions (likes, comments, shares).
  • Content Impact: Effectiveness of posts in generating interactions.

4. Improving Customer Satisfaction

• Goals: Enhance the perception and satisfaction with your brand, products, and services.
• Actions: Develop customer case studies, improve response rates on social media, and share innovations and customer experiences.
• What to Analyze: Consumer perceptions of your brand and offerings.
• Key Metrics:
  • Perception: Sentiment towards your brand compared to competitors.
  • Response Effectiveness: Effectiveness in addressing social media inquiries.
  • Service Performance: Resolution rate of customer support issues.

5. Converting Leads

• Goal: Convert social media leads into business opportunities.
• Actions: Distribute targeted content, engage with influencers, offer trials or samples, and organize events.
• What to Analyze: The number of leads generated through social media.
• Key Metrics:
  • Lead Volume: Count of social media-derived leads within a set period.
  • Lead Growth: Monthly increase in lead conversions from social media to sales.

How To Calculate Your Social Media ROI?

General Formula to Calculate Social Media ROI

Social media marketing includes key areas such as building brand awareness, engaging customers, retaining them, and acquiring new ones. However, these aspects don't directly translate into immediate financial gains, which makes it challenging for marketers to measure success in monetary terms.

To navigate this, marketers often turn to various social media Key Performance Indicators (KPIs) and assign their monetary values to gauge the 'Return from Social Media' or social media ROI.

The formula for calculating social media ROI is:

Social Media ROI (%) = (Return from social media - Cost of social media marketing) / Cost of social media marketing * 100%

While this formula offers a starting point, accurately determining your social media ROI involves a detailed analysis of both the direct and indirect benefits derived from your social media efforts.

Components for Calculating Social Media ROI

Understanding which metrics to focus on is confusing due to the sheer number of them available. However, by concentrating on a few key marketing metrics, such as the ones listed below, you can monitor your social media impact.

Clicks

Track the number of customers coming from social media clicks through attribution modeling. It's crucial not only to count the clicks but also to observe what happens post-click. This insight allows you to determine the conversion rate of social media interactions into potential leads.

Engagement

Engagement includes comments, shares, retweets, and mentions from your social media posts. Analyzing these interactions helps you gauge the following:

If your content resonates with your audience
Your audience's preferences or issues with your products or services
Current conversations and trends within your market

Share Of Voice

To measure your social media ROI, compare your campaign's performance with that of your competitors.

Evaluating the frequency and sentiment of your brand mentions relative to your competitors provides insight into your position in industry-related discussions.

Tools For Tracking Social Media ROI

Statusbrew

Statusbrew offers a comprehensive dashboard that tracks your social media performance across all the major platforms. Our analytics offer a clear vision of your social media trajectory to transform your raw data into actionable insights.

Key Features:

• Unified Dashboards: Monitor your social media activity on Facebook, Instagram, Twitter, and more from a single place.
• Detailed Engagement Reports: Dive into metrics like post reach, impressions, likes, shares, and comments to truly understand your audience's preferences.
• Competitor Insights: Benchmark your position relative to your competitors and glean insights from their strategies.
• Campaign Monitoring: Keep a close watch on your campaigns and back up their success with solid data.
• Social Listening: Stay alert to every brand mention or relevant conversation to keep your finger on the community's pulse.
• Tailored Reports: Customize reports to align with your goals.
• Sentiment Analysis: Gauge the sentiment of your audience towards your brand.

Brandwatch

Brandwatch acts as an all-seeing eye for your brand, catching every mention, whether a whisper or a shout-out, across digital platforms. It's an ideal tool for brands that have a significant online presence or are going through social media crises.

Key Features:

• Comprehensive Social Listening: Keep tabs on mentions of your brand across the web, with the ability to filter by keywords, locations, and demographics.
• Influencer identification: Identify influencers who can amplify your brand message and help you reach new audiences.
• Trend Spotting: Identify emerging trends and topics that matter in your industry.
• Competitor analysis: Gain insights into your competitors' social strategies and learn from what they do well and their missteps.
• Crisis Management: Equip yourself to respond swiftly to any negative buzz or potential PR issues.

To explore similar platforms, read our blog on Top Brandwatch alternatives

Google Analytics

While primarily known for website analytics, Google Analytics also links your social media efforts to your website's performance goals.

Key Features:

• Website Traffic Analysis: Monitor the flow of visitors to your website from social media posts to gauge their impact.
• Goal Tracking: Evaluate how social media activities contribute to achieving your business objectives, like generating leads or sales.
• E-commerce Insights: Observe how social media drives purchases to assess the direct sales impact of your posts.
• Audience Demographics: Get a deeper understanding of your audience's interests and behaviors to tailor your content more effectively.
• Content Testing: Employ A/B testing to refine your social media strategy and allow data-driven decisions to guide your content and campaign optimizations.

6 Steps To Improve Your Social Media ROI

Boosting your return on investment in social media is an ongoing task that demands attention and strategy. Here are five key strategies to help you get more from your social media efforts:

1. Understand Your Audience Deeply

Get to know your audience as if you are becoming their best friend. What do they enjoy? Where do they spend their time online? Dive deep into their preferences and behaviors to tailor your social media strategy. Take a cue from Wendy's, known for its witty and humorous social media presence, which resonates well with its audience. This also leads to higher engagement and improved ROI.

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A post shared by Wendy's 🍔 (@wendys)

2. Be Bold with Your Content

In the crowded world of social media, your content needs to stand out. Focus on creating unique and engaging content that appeals to a broad audience. Quality always trumps quantity. Look at Apple: their posts may be infrequent, but they are impactful and get significant attention.

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A post shared by apple (@apple)

3. Leverage Social Media For Lead Generation

Investing in social media will yield significant returns, especially when you use it for lead generation. Share valuable content like e-books or white papers with embedded lead generation forms to provide value while capturing customer information.

4. Continuously Optimize Your Strategy

Don't be afraid to experiment and adjust your social media strategy. Regularly update your posts with fresh images, keywords, and headlines to see what works best. Experimentation is key, both in organic and paid social media efforts.

5. Collaborate With Influencers

Influencers can dramatically enhance your brand's visibility and credibility. Partner with micro influencers who share your brand's values for authentic promotion. Daniel Wellington's successful influencer campaign is a prime example of how well this can work together to turn influencers' posts into a trend and drive sales.

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A post shared by 𝐈𝐋𝐒𝐄 𝐙𝐖𝐀𝐑𝐓 (@ilse.zwart)

6. Stay Updated on Social Media Trends

Social media and consumer behaviors are always evolving. Keep your finger on the pulse of the latest social media trends and adjust your strategy accordingly to ensure your efforts are directed in the right direction.

Final Thoughts

Many brands hesitate to dive into social media marketing due to its indirect path to conversions, unlike the more straightforward results seen with pay-per-click (PPC) advertising. It's crucial to understand how users actually interact with your social media content and to interpret the data with this behavior in mind. Often, people aren't ready to make a purchase the first time they come across your ads on social media.

By setting achievable goals, thoroughly analyzing your data, and carefully selecting your analysis methods, you can get a clear understanding of the value your social media efforts bring to your brand.

FAQs (Frequently Asked Questions)

Here are some commonly asked questions about social media ROI: