Gone are the days where social media marketing was merely an experimental marketing tactic.
It has become a core part of any business’s marketing strategy, and it needs to support your business goals, and prove its value in comparison to other channels for resources, budget, and executive buy-in.
If you’re struggling to measure ROI for social media, you’re not alone. Over 60 percent of marketers identify measuring ROI as one of their top social media marketing challenges.
There’s a tremendous amount of work that must go into social media marketing for it to be effective—and it’s often underestimated by business leaders. Financial investments are precious to startups and small businesses, so it’s extremely critical that social media marketing efforts can be validated as to how they’re contributing to the business’s goals.
Sure, a financial return is a priority, but never forget that you first need a solid foundation to build your marketing efforts on. You must invest in the resources, tools, and technologies to measure and track your social media ROI. This will allow for you to allocate more resources toward what is working, and improve what is not. The ability to take such a proactive approach to ensure that paid efforts are as effective as possible is an enormous value-add to modern day businesses.
Here are several strategies you can do to easily track social media marketing ROI for your business.
Identify your business goals
We can practically hear the collective “duhs” through the interwebs. While it may seem obvious, it’s a step that’s often skipped by business owners and marketers alike as we’re scrambling to keep our content fresh.
Despite our heroic intent, the lack of planning results in scattered messaging, inconsistent posting, and—drumroll please—a lack of reportable metrics!
We’re not here to talk about vanity metrics such as likes, retweets, shares, and so on. We’re talkin’ real goals that prove their value by supporting core business objectives.
The most critical question to ask is: How are your social media marketing efforts supporting your business goals? Over 50 percent of marketers identify tying social media activities to business objectives as their second most challenging social media marketing task. Could it be chalked up to a lack of clearly defined goals?
Comb through your business goals one by one and identify opportunities for social media to support them. The answers you come up with will define how to use social, the type of content you need to create, how you distribute it, and the reporting metrics to measure success.
Next, create tangible goals. For example, say you need to increase the number of top-of-funnel leads for your B2B company. Consider developing an offer such as a whitepaper or an ebook, and create a campaign around it to incite email sign-ups. You’ll develop a beautiful landing page that begs for conversions, create ads tailored to your selected social channels, and continue to manage and optimize the campaign. Now, you have brand new contacts for your upcoming email marketing campaigns and can begin to move them down the sales funnel.
Define your social media metrics
Using your business goals as a guideline, define the metrics you’ll be measuring and reporting. There are several different metrics you can use to track your progress against such as:
- Reach: the number of people who have seen your social media posts
- Site traffic: the number of people who’ve visited your website
- Leads: the number of people who have filled out a form on your website
- Sign-ups and conversions: the number of people who’ve joined your email list, or downloaded premium content
- Revenue generation: the amount of sales generated from social media marketing
Bonus: Use S.M.A.R.T goals to help you truly define how your social media metrics will support your bigger business goals. They’ll need to be specific, measurable, achievable, realistic, and timely. See the S.M.A.R.T goal framework to create yours.
Know the role and impact of each metric
Let’s go through each metric and define when it’s a good idea to measure them.
If one of your goals is to increase social media engagement, definitely keep track of the number of likes, shares, comments, and retweets.
Is one of your core business goals to increase visibility and brand awareness? Track the number of people you have reached in your target region.
If you’re looking to increase the number of visitors to your website or remarket to visitors, measure the number of URL clicks and traffic from social media.
Generally speaking, you’re going to want to track the number of organic and paid leads that come in through your website and be able to attribute their source.
Sign-ups and conversions
If building your list of qualified leads or emails is a part of your goals, you’re going to need to track the number of sign-ups or conversions.
You’ll need to see how many dollars were generated from your social marketing efforts. It’s important to compare the spend versus sales to identify the cost-per-acquisition.
Validate your ROI
Hooray! You’ve defined social media goals and are acting upon them—now what? It’s time to prove the value of your efforts. Over 50 percent of marketers struggle with tying social media activities to business outcomes.
Additionally, a study conducted by Altimeter outlined the reasons why several organizations avoid focusing on social media ROI because of:
- An inability to tie social media to business outcomes—56 percent
- A lack of analytics, expertise and/or resources—39 percent
- Poor tools—38 percent
- Inconsistent analytical approaches—35 percent
- Unreliable data—30 percent
We say no more, compadre!
It’s critical to identify and implement the tools and processes required to measure your social media ROI once you’ve established your social media goals. This will more than likely involve UTM tracking codes to monitor where traffic is coming from, building custom landing pages, and more.
Here are some tools you should consider implementing:
- Google Analytics. Track website traffic, sign-ups, and conversions stemming from social media campaigns.
- A good CRM. Most CRMs allow you to see the URLs for incoming leads so you can determine the source of traffic and accurately attribute them. Furthermore, you’re able to determine which campaigns and messaging are working, and what’s not. The leads in your CRM are also a good way to verify the information displayed in Google Analytics. If you’re looking for something basic, Hubspot has a great CRM that is both functional and intuitive. The best part? It’s free!
- Third-party social media platforms. Platforms such as Hootsuite or Hubspot have great built-in analytics. You should be able to effectively track reach, conversions, and more insights about your social media activities.
Calculate your social media ROI
You’ve set your goals and selected which social media tools you’re going to use.
Now you need to calculate your ROI. All your social media efforts should be trackable so you’re never scrambling to prove the value of a campaign. Here are some tips:
Build out reporting templates to track the metrics that matter most to you
There are two different ways to monitor and analyze data: manual or automated. If you’ve opted to use a marketing automation platform like Hubspot, there are visual dashboards that allow you to quickly view and analyze the impact of your social media marketing efforts and how they tie into your sales.
If you’re not using a marketing automation platform yet, you’re most likely going to need to use a spreadsheet to track the progress and impact of your social media marketing efforts. You can use the built-in reporting tools from Google Analytics, Facebook Business Manager, LinkedIn, Twitter, and any other social media channels you use to pull the data you’re looking for.
Then, you’ll consolidate and organize the data into your shiny, new marketing spreadsheet to determine the effectiveness of your social media efforts.
Check your social media metrics consistently
Doing this well help you analyze the types of content your audience is most engaged with, identify the best times to post, and gain a deeper understanding of your audience demographics across each social media platform. You may be surprised to find out that you’re speaking to different audiences on Facebook and Instagram.
Automate reporting where you can
Social media marketing takes a lot of time, and a bulk of it is spent analyzing and reporting data.
The ideal solution that saves time on manual reporting is a marketing automation platform; however, these are not always the most affordable solution for small businesses—especially startups.
If you can’t afford a marketing automation platform yet, Google Analytics allows you to create custom reports that display only the data that matters most to you. Although it’s not a complete social media marketing platform, it will allow for you to keep an eye on key metrics such as which channels are contributing to your website traffic, which pages are most visited, how long users are staying on your website, and much more.
Proving social media ROI has never been so easy as it is now. With the right goals, metrics, and systems in place to support your social efforts, you’ll be able to quickly identify its value, pinpoint what’s working and what’s not, and ultimately maximize returns.