If you’re serious about your digital marketing, you’ll want to know about your social media ROI. Return on Investment (ROI) is how you determine whether you’re getting good results from the money you’ve spent on a social media campaign.
Suprisingly, only 28% of businesses are able to show how their business outcomes are driven by social media.
Traditionally, you’ve needed a whole host of tools to prove whether you’re getting a good return on your social media investment. You may have found yourself searching through any, or all, of these for answers:
- Google Analytics
- Tons of spreadsheets
- Multiple open browser windows
- Oodles of UTMs to track
- Rummaging through each social platform’s analytics data
Over 98% of the links shared to social media aren’t being tracked and therefore cannot be attributed to driving revenue. So it’s no wonder that some business owners don’t understand the value of social media marketing.
But recently, I’ve been exploring Agorapulse’s new social media ROI feature. I’ve used Agorapulse for scheduling social media content for clients for a while. With their ROI tool, I can give clients more accurate reporting and a true sense of how wisely their social media marketing budget is being spent.
Why do you need to understand social media ROI?
It’s a major headache for business owners, and social media managers, who can’t prove that the work they’re doing is creating revenue. Being able to put all that complex data into one easily-understood report is time consuming too. And it’s frustrating when you’re in a meeting with the ‘bean counters’ and you can’t justify your strategy.
The basis for ROI is fairly straightforward though:
Investment – total cost of social media marketing
Profit – money earned from social media marketing
Profit/Investment x100 = social media ROI%
This is a great equation to use if you’re marketing physical products on social media But what do you do if you run a service based business?
You simply need to shift your focus to Lifetime Values (LTVs). This means you’re taking into consideration that there are no single payments but instead there are many payments over a set period of time/months/years.
Agorapulse helps to put multiple KPIs into perspective:
So the next time you’re faced with the headache of having to justify your social media marketing budget, remember there’s an easier way to prove your campaign ROI.
If you’ve got questions about social media marketing ROI, email me your questions.