Digital marketers have been on a quest to find the ROI or return on investment for social media marketing for years. However, finding the answer to this has been rather difficult. In fact, only 28% of organizations feel they can attribute business outcomes to social media marketing. In this article, we cover how you can prove social media ROI confidently.
Many social media platforms like Twitter, Instagram, Facebook, and TikTok offer various insights for business accounts. These insights typically include audience engagement, reach, and a content overview. However, these metrics don’t show lead conversions, or website actions, which are the most common ROI statistics businesses want. Being able to track and prove social media ROI effectively can show if your social media content and campaigns are generating revenue or not. Agorapulse is here to help.
Agorapulse offers powerful automated UTM capabilities that translate Google Analytics into actionable social media insights. The dedicated social media ROI tool and dashboard allow businesses to pull data from various resources. This data can then be converted into helpful reports and hard data to show ROI from social media campaigns. Businesses can utilize advanced link management tools to create and organize shortened links, and tracking codes for social media. Below is more information on how to calculate and track social media ROI.
The basic formula for calculating ROI for social media marketing is;
For a service-based brand, you would need to consider your LTV or lifetime value for each customer that becomes a client. This means if your average client stays working with you for 5 years, and spends $10,000 per year, then the value of a client is $50,000.
To accurately determine where the sales come from, businesses should set up tracking pixels or tracking codes. By using tracking pixels, the customers' journey is tracked from clicking on the advert, until they leave your website. This allows you to see how long they spent looking at the advertised product, whether they added it to the cart, or if they looked at anything else. If a customer clicks on an advert but doesn’t buy, they could still convert later. After all, many people require several visits to a single website before they purchase. By tracking each interaction, you can see how many visitors convert. A conversion can be any of the following;
As a social media manager or marketer, understanding how to prove social media ROI is crucial. As technology evolves, and more people utilize the internet for shopping, calculating the ROI is becoming easier. Using a tracking tool like Agorapulse can be helpful, however, you should ensure you fully understand how the reports are calculated. This will ensure you can continue to build effective campaigns that will give the best ROI for your business.