Calculating your social media is not just for the accountants and finance department. Knowing how much return you are getting from your activities is one of the most telling ways to understand your business.
Keep reading to find out why you should be calculating and monitoring your social media ROI, and how you can do it with an easy formula. Are you ready to optimise and boost your business?
What is social media ROI?
We’ve all heard the term ROI, or return on investment, before. But many assume that the return is only monetary. In the case of social media ROI, you can easily find out the return you get on your social media activities. These investments can include a large variety of things from the number of hours used on social media activities to the ad budget. This is a simple way to calculate social media ROI.
Why is it important to calculate social media ROI?
There are a few reasons why you should monitor your social media ROI. It is an effective way to optimise your business processes and become a flexible organisation that can adapt to any new obstacle or challenge.
What is working and what is not?
The main reason to calculate your ROI is to understand if what you are doing, all the money, time, and energy you are putting into social media, is worth it.
Say, for instance, you spend 40 additional hours on a social media project. You think it will be a sure success and that you will gain a lot of value from it. However, after you have calculated the social media ROI, you realise that your expectations have not been met and the return on all of your hard work is disappointing.
So, tracking social media ROI is a good way to know if your hard work and dedication are paying off and adding value to the business. You can use this information to prioritise your tasks. For instance, if one particular social media project does not yield much of a return, you can lower that to the bottom of your priorities.
Dedicate your resources
Another great reason to monitor your social media ROI is to discover your strengths and weaknesses. By understanding which projects have the biggest and best social media ROI, you can stop pursuing the projects that do not give a satisfactory yield.
Perhaps you have noticed that your Instagram Ads have a very large ROI percentage, whereas your Facebook Ads have a very low social media ROI. By calculating which has the best ROI, you can start to play on your strengths. In this example, you would invest more resources into Instagram, since the payoff is better.
Using social media ROI for this type of decision is an effective way to optimise your business and become more efficient.
What should you include in the calculation of social media ROI?
When it comes to calculating your social media ROI, you should consider which type of metrics to include in your calculations. What kinds of expenses/investments are relevant? Of course, your ad spend must be included, but there are also other items of expenditure that are relevant to your social media ROI.
Most companies use a social media management tool to make posting on social media easier and less time-consuming. These tools usually charge a fee if you have premium access. If you do, this should be taken into consideration when doing your social media ROI calculations.
The cost of content
Have you used a lot of resources to produce the content you needed for a particular project? Perhaps you worked with in-house writers or an agency. If so, you should include the details about the financial costs of each employee or the agency fees.
For example, how much does the employee get paid per hour, and how many hours did it take to write that specific blog post? Be sure to include all these small costs in your calculation as this will impact your result.
Add up your quick meetings
From quick catch-ups over coffee to longer sit-down meetings – it takes a lot to post and plan content for social media. Brainstorming sessions, setting up and running ads, and staff training all add up.
When calculating your social media ROI, include all of these small expenses to get an accurate number. To make it easier, you can include aspects that are specifically within a certain timeframe.
How to measure social media ROI
The formula for measuring social media ROI is relatively straightforward. After you have gathered all the figures you need, you can easily calculate your ROI using this social media ROI example.
This formula will tell you how much return on your investment you have earned and will express it as a percentage. This is a very straight forward formula and is largely determined by the metrics you choose to include in terms of total investment.
To get the most accurate answer, you should include all investment costs, no matter how big or small.
Using social media reporting in your ROI calculations with Agency360
Any well-written social media report should include all the data that is used in a social media ROI. The report is almost like the backbone to all your social media activities and justifies your decision to do certain social media-related tasks.
With Agency360, you can easily create customisable client reports that can assist you with monitoring your social media ROI. Simply click onto your desired client and enter their dashboard.
Click on Google Analytics and then Channels to see your client’s dashboard.
Along the top bar of the screen, you will see social media. By clicking this button, you will be taken to your client’s social media dashboard. You can see all the insights from your client’s different social media accounts. For example, the number of total visits, the percentage of new visitors, and how long they stay on your account.
To create a report, simply click generate report from the side menu. Then select your desired metrics. For social media ROI, you should consider selecting the social media metrics. Simply choose the period you would like to report on and quickly download the report.
Your report will contain all the details you need to manage your social media ROI. You can easily compare reports for previous periods to get an idea of what type of progress you are making.
Evaluate your results by setting goals for your social media ROI
The best way to effectively improve your social media ROI is to set realistic and achievable goals. There is no point in setting highly ambitious goals that are difficult to reach, as this can be highly demotivating and unappealing.
So, set a realistic goal for your social media ROI and work towards this with your team. You can test out your Facebook Ads to figure out what works best or see what traffic source is most valuable by tracking your UTMs.
Whichever method you use to improve your social media ROI, monitoring your ROI will help you work towards a more efficient and optimised business.