How to Measure Social Media Marketing ROI [With Expert Advice]
By fneedle@hubspot.com (Flori Needle)
When building effective social media ad campaigns, the biggest question isn’t “How much should I spend?” It’s “For every dollar I spend, how much do I get back?”
In other words, it’s all about return on investment (ROI) — how are ad spending and customer conversion linked? Understanding this makes the amount you spend less important and instead lets you focus on the impact of your social ads.
In this piece, I’m taking a look at how to measure social media marketing ROI, how to improve it, and offering a look at eight tools to help you streamline the process.
Feel free to jump ahead to:
How to Measure Social Media Marketing ROI
Expert Tips on Measuring Social Media ROI, According to Experts
How to Improve Social Media ROI
How Much Should You Spend on Ads?
8 Best Social Media ROI Measurement Tools
ROI is a measure of spend versus value: If I spend “X” amount, how much do I get back? The best-case scenario is an ROI greater than one, where companies get back more than they spent on an investment.
Consider a manufacturing company buying a new piece of production line equipment that costs $10,000 but brings in $20,000 worth of revenue each year. The result is a positive ROI and a worthwhile investment.
While measuring social media ROI isn’t quite as straightforward since companies need to account for the reach and impact of specific ad campaigns, the underlying concept is the same: Over time, the goal is to get back more than you spend.
While specific measurement timelines and media metrics will differ, the role of ROI remains the same.
How to Measure Social Media Marketing ROI
One of the most popular and data-driven ways to measure social media marketing ROI is through paid advertising. The problem arises, though, when there isn’t a sound strategy in place to yield a positive return on investment.
How does this happen? Typically, social media marketers build a Google Ads campaign to rank for important search terms. The campaign drives clicks, traffic, and leads, but ultimately the ad spend outweighs the impact of the ads which is bad news for ROI.
These marketers end up learning a really expensive lesson, one that could be easily prevented by following these simple steps:
1. Develop a Budget.
Ads aren’t right for everyone. Some industries have extremely high competition with astronomical CPCs. Some products have too low of an average sales price for the economics to work.
To determine if ads are worth your time, I recommend you start by building a budget. This isn’t always an easy task, especially considering the hit many marketing budgets have taken over the past two years. According to Tequia Burt, Editor in Chief of the …read more
Source:: HubSpot Blog
