The amount of time, money, and effort brands put into their social media marketing is higher than ever before. With a significant amount of company dollars going toward social media initiatives, it’s a wonder what percentage of this spending is being put to good use — and how much isn’t.
Before pulling out their wallets, organizations should prove their return on investment (ROI) for different social media tools. This “return” comes in various forms: from customer satisfaction and lead generation to brand awareness. Most importantly, improvement in each of these areas generally leads to an increase in revenue.
Read on to find out the importance of proving the ROI of your content marketing and social media tools and figure out ways you can effectively analyze these channels.
Why it matters to track social media analytics
Figuring out the ROI of your social media strategy is key to seeing what’s working and what’s not in your marketing tactics. That way, you can decide how best to plan and execute spending to benefit the future of your organization. Social media analytics can help you locate your pain points succinctly, saving valuable time in the long and short term.
In addition, communicating the ROI of social media within the organization can help executives and other internal business leaders understand the value of this digital marketing technique. Not only can this set social media skeptics straight, but it can also influence them to increase their spending on social strategies as needed.
Basic measurement of social media tracking
If you’re unsure of how to find a precise amount or even an estimate of the value of social media tools in your organization, you might try out a few different tracking methods. The fastest way to measure a company’s social media ROI is by completing the following formula presented by Buffer:
Benefits – Costs x 100 ÷ Costs = Social media ROI (in %)
In this formula, “benefits” refer to the positive results from implementing a social marketing strategy, including:
- Number of impressions
- Conversion rates from social media (if available)
- Lead generation
- Share of voice
“Costs,” meanwhile, are connected with spending on social media in the following ways:
- Salaries for the social media team
- Amount spent on paid social strategies
While this can be a quick way to measure the value of social media marketing, this equation doesn’t take into consideration the intangible benefits of an excellent social media strategy, such as an increase in newsletter subscribers or lower website bounce rate.
To look more closely at how improved engagement can impact business outcomes, you might want to look at more precise measurement tools.
Advanced social media measurement tools
For more sophisticated ROI tracking, you might consider incorporating a few different social media tools in your everyday marketing operations. Some popular options include:
- Facebook Pixel: Helps track interactions and conversions resulting from Facebook ads
- Socialbakers Ads Benchmarkers: Measures your business’ Facebook advertising ROI across different industries and regions
- UTM parameters on Google Analytics: Tracks traffic and conversions generated by ads across multiple social media platforms
All-encompassing ROI calculator
MDG Advertising found that 73 percent of businesses consistently track their social media ROI, though many of these marketing professionals only locate likes, views, and comments, rather than their impact on business outcomes.
Meanwhile, only 21 percent of companies measure conversion rates from social media and 16 percent track amplification, the impact of sharing on social media. Customer service metrics are only acknowledged by 2 percent of surveyed organizations.
This is one majority you don’t want to be part of. To improve business’s spending, it’s imperative that you analyze spending across the organization as a whole, particularly social media marketing.
Use the PostBeyond social media ROI calculator to figure out your social reach. Our formula takes into account your industry, company size and social following, among other factors.