“How are we going to measure the ROI of our social media marketing campaign?” This question is often asked and I’m sure you have thought about it yourself if you are busy with a social media campaign. This medium isn’t something new, even though it’s still trending online and a buzz word to many. Many businesses have started integrating social media in their current marketing campaigns, but how are they calculating what gains they have made from their marketing spend?
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Before we start calculating ROI for social media, let’s look at how to work out ROI in general. The ROI of a campaign is usually measured as a ratio and derived from this formula: ROI = ((earnings – initial invested amount) / initial Invested Amount ) × 100 . Simple? If you have invested R5 000 into a direct email marketing campaign and you have made R8 000 in sales because of your campaign, your return on investment would be 60% (R3 000). This is how it’s worked out: ((R8 000 – R5 000) / R 5000) x 100 = 60%.
Which channels are you going to measure?
Working out the calculation above is pretty straightforward when you have a clear definition of the total spend and the income. With social media it’s not that simple, especially when you are starting with your campaign and you are using many social media channels such as Twitter, Facebook, YouTube, and LinkedIn. Are you going to measure each channel on its own or are you going to group them and measure them collectively?
Online you will find many articles, blog posts, whitepapers, and books offering advice on measuring social media ROI. Some offer good advice, some do not. There is not concrete answer to measure the ROI of your social media campaign, but the easiest method I have found is when you tie in your social media campaign directly with your business and other marketing goals.
Here’s a post I published on Memeburn a little while back that explains this in detail: You can (and should) measure social media ROI: here’s how.
Calculating the ROI of your campaign
There is no definite answer on calculating ROI with your campaign and it will vary from what goals you are chasing, but here are a couple of variables you can use to calculate the ROI with your social media campaign.
- How many visitors are generated to landing pages on your website and blog from your social media campaign?
- How many of those visitors were converted into a sale or lead? Use tags and shortened URL’s to measure this.
- Use special coupon codes and use a different one with each channel you are targeting to measure exactly which network and content the conversion came from.
- Use a specific email address and telephone number for each social media channel you are using.
If one of your goals is to increase targeted traffic that leads to sales it can be measured as you can directly see where the traffic originated from. If you want to measure anything other than physical sales or leads, you can measure other variables such as engagement score, sentiment analysis, increase positive mentions, and even increase cost savings.
Working out the ROI of your social media campaign might sound like a tricky calculation, but if you know what you want to measure and you have clearly defined your goals with your campaign, you will be able to calculate if your campaign is actually working or not.
