When I started reading up about social ROI, I found it so confusing. I wondered how other business leaders understood what influences the ROI of their campaigns and how they went about measure success. I’ll be the first to admit, I don’t do great with numbers or formulae. But I also noticed that when discussing social media measurement, most experts had substituted simplicity and comprehension for thoroughness and over-complication. That was when I decided to make sense of this topic.
In this article, I simplify the steps to measuring social media ROI and discuss the role consumer insights play in helping brands reach new heights with their campaigns.
Table of Contents
The following blog is an adapted snippet from our latest whitepaper, “The Social Media ROI Playbook: Driving Growth with Social “. Download the whitepaper here.
Why Social Media ROI Matters
As Lewis Carroll (and later, George Harrison) so famously stated, “If you don’t know where you’re going, any road will take you there.” If you’re running a social media campaign without taking the time to use an analytics tool to both better understand your audience and assess if you’re getting the results you want to achieve, then you really don’t know where you’re going.
Social ROI matters because it tells you where you are, where you want to go and where you should be heading if you want your marketing campaign to work. Otherwise, you might as well be chucking all that time, effort, and money down a very deep well.
How Consumer Insights Enhance Social Media ROI
The way consumers research, discover, and purchase products has changed dramatically over the past two decades. First, widespread adoption of the internet changed the way we buy, and then the advent of smartphones accelerated this disruption further. While marketers were still trying to make sense of this changing world, the global pandemic of 2020 turned everything on its head once more.
Marketers around the world all face the same question now; what do consumers want?
The world seems to change too fast for any of us to keep up, and trying to figure out how to capture the attention of customers in a noisy world can feel impossible. This is the problem that Consumer Insights aims to solve, answering fundamental questions such as:
- Who is our target audience?
- What motivates and interests them?
- Do different communities or segments exist within my target audience?
- How are consumer trends changing?
Consumer Insights vs Social Listening
While similar, consumer insights and social listening are not the same things.
Consumer insights go a step further than social listening and add qualitative analysis into the mix, trying to understand what exactly the results mean and what they can tell us about consumers. For example, social listening might tell us that from October to February people talk more about Scotch whisky on social media. On the contrary, consumer insights tell us that people enjoy whisky for its warming quality during the cold winter months and that they’re also interested in finding new whisky cocktail recipes. Armed with this social media data, brands can build more relevant and personalized messages that are more likely to appeal to consumers, increasing sales as a result.
Consumer Insights platforms like Meltwater also enable marketers to identify new revenue streams by better understanding the Tribes that make up their audiences. Tribes refer to communities of like-minded individuals within a broader audience, who have more in common than demographics. They could have similarities in a number of different ways such as the media they consume, influencers they follow, brands they purchase, online conversations they participate in, the content they share, social channels they use, and more. Understanding all of this can help you to target campaigns at your tribes more effectively. That way you no longer need to guess which media to advertise in, which influencers to work with, or what kind of messaging you should use since tools consumer insights tools help you get the answers with a high degree of precision!
Want to learn more about Meltwater consumer insights? and we’ll be in touch shortly!
How to calculate the ROI of social media marketing
If your business has been trying to make sense of calculating the ROI of social media marketing, here’s where you should start.
1. Decide where you want to go
The first step towards calculating the ROI of social media marketing is to decide where you want to go AKA, what are your goals and business objectives? What do you want to ultimately achieve through your social media campaign? For instance, you can choose to focus on one or more of the following goals:
- Increasing blog and website traffic
- Increasing leads and calls
- Increasing brand reach and visibility online
- Enhancing reputation as an expert and positioning your brand as a thought-leadership
- Getting more sales and conversions
2. Plan your social media campaign
The social media campaign that you decide to run will ultimately depend on your goals. For example, if you decide to go after leads, you will have to create a lead magnet – an incentive for which your prospects will share their email address or phone number with you. If you go down this route, you may wish to invest in doing some primary research and use the insights you find as gated lead gen content. Or, you may choose to run a Twitter card campaign or a Facebook ad campaign to generate leads from these two channels immediately, while creating a blog as a long-term campaign to generate leads from organic traffic.
If you decide to go after sales on your eCommerce website, Facebook carousel ads might be the best option for short-term sales and app downloads a more long-term plan to deliver content right to the buyer’s mobile devices.
As mentioned above, you also need to customize your social media campaign based on consumer insights. Once you understand where your audience is hanging out, you can narrow down the type of content you need to be creating. For instance, images will do best on Instagram, Facebook, and Pinterest. If your demographic is largely a B2B audience that is active on LinkedIn and Slideshare, you will have to rethink your creatives and campaign.
3. Track everything
Gone are the days when you had to wander blindly around the social media landscape, trying to figure out which posts are working best, or use the “Post and Pray” method of sharing content.
The wonderful thing about online marketing is that you can measure almost everything. From the content that works best on social media, to the path your visitors take through your website, to signups, leads, sales, and follow-up! Everything can be monitored, measured, and customized to optimize the customer experience.
If you’re using a CRM like Hubspot’s Inbound Marketing Software, you can customize and track your entire visitor experience. In fact, most good marketing CRM systems will have the option of using APIs to connect your social media analytics tool with your internal CRM data. This allows you to measure ‘moments that matter’ touchpoints along the customer journey making it easier than ever to spot patterns where prospects fall off the journey and fail to convert. With this knowledge, you can create campaigns and track which ones are working and which aren’t so that you can put your time, effort, and money into the social media campaigns that are getting the results you want.
4. Decide the value of a lead or sale
What does social media return on investment (ROI) mean to you? Calculating ROI is ultimately about measuring the cost of a lead or sale and deciding if your marketing expenses were worth it. Only you can decide whether the ROI in social media campaigns was worth it to you.
There are a lot of social media tools, methodologies, and complicated formulae to calculate social media ROI, but the only one that actually makes sense is to ask yourself whether it was worth spending $5 on a Facebook ad to gain a lead that went on to convert to hundreds of dollars worth of sales on your website.
It’s up to you to decide what social media marketing campaigns make sense to spend on and what you can pass on.
When measuring ROI, don’t forget to factor in the cost of your social media marketing agency or, if you’re doing it in-house, the salaries, time, expense, and effort it takes to go from point A to point B.
5. Set a course for success
Once you have calculated your social media marketing ROI, it’s time to analyze your results using a social analytics tool, assess if they are taking you where you want to go, and tweak and fine-tune your campaigns to take you on a trajectory to social media success.
It’s a good idea to benchmark your results against a different period, usually, brands do this on a quarterly basis. This helps them see where they’ve moved the needle with their social media efforts. You can do this for your competitors too, if you decide to benchmark against your competitors, social media share of voice is a key social metric to use.
PS. Don’t forget to download our new whitepaper, The Social Media ROI Playbook, for more tips on growing your business with social media!
This article was written by Priya Florence Shah from Business2Community and was legally licensed through the NewsCred publisher network.