To measure your social media’s performance, you must track its ROI. This shows its value and the engagement of your content. 

Social media is a very useful tool for a marketing strategy to boost brand awareness, social commerce, and engagement. 

In this blog, we’ll learn about social media ROI, how to track it, and tips for improving it! 

What is social media ROI

Return on Investment (ROI) is the value of social media activities divided by the investment rate. It measures the measurable benefits and revenue generated by a brand’s social media efforts and campaigns compared to the cost of those campaigns and efforts.  

Calculating the ROI of social media is very complex because you should track many metrics and attribute them to specific social media campaigns. Some of the important metrics to calculate ROI are conversion rate, no. Of likes, no. Of comments, followers’ growth rate, customer acquisition cost, etc. By tracking these metrics and calculating the ROI, you want to create more strategies to optimize your social media strategies, enhance online visibility, and boost revenue. 

How to track the ROI of social media 

34% of marketers stated they are uncertain about their ability to measure the ROI of social media. The formula to calculate ROI is 

(Gain from investment – Cost of Investment) / Cost of Investment 

For example, Gain from investment is $10,000 in revenue generated by social media marketing and the cost of investment is $2,000 in social media ad spend. So the ROI is ($10,000 – $2,000) / $2,000 = 400% ROI. 

If your ROI value is more than 0%, then you are making money and if it is below it means you are losing money from social media campaigns. 

Calculating ROI depends on the objectives of your campaign and the metrics you are using. For example, if your goal is to track the follower’s growth rate then your metrics will be different as they will be for tracking brand mentions, etc. Engagement is one of the most important metrics because it shows how much users are interacting with you. Altimeter research found that over a third of content executives use engagement to track the performance of their content. Some of the engagement metrics are like, share, click, etc. 

Another way to track ROI is by using Google Analytics. You have to set a goal or event tracking in Google  Analytics. 

How to improve the ROI of social media

Irrespective of your average ROI, let us learn some of the ways to improve your ROI

• Target Audience: For enhancing the performance of social media campaigns and ROI you must understand your target audience. Learn which platforms they use and what type of content they consume. Provide them with content that keeps them engaged. 
• Content: Plenty of content is available on social media, to get noticed your content should be unique, relevant, creative, authentic, and provide some value to the users. Create content that your users consume and target them on their preferred channel. 
• Lead Generation: According to a study, In the U.S., marketers stated that social media marketing accounts for 15% of their budget. As your budget is more focused on social media, you expect higher results from it. To attract more leads you must attach a lead generation form on important assets such as ebooks, contests, etc to capture users’ details. 
• Test: Track the performance of your social media and optimize your campaigns, posts, etc. You can include more hashtags, keywords, etc. Add elements of animation, AR, and VR to keep the users engaged and improve their user experience.
• Backlinks: Try to collaborate with industry experts, media channels, etc. Request them for a backlink or share your profile on their stories. You tag them or send a personal message. Always connect with the pages that post content aligned with your brand’s objective. 
• Social Media Profile: Your profile is the first thing that a user will notice when they first visit your profile. Make sure you leave a good first impression. Optimize your content. Use attractive images and reels. Always be consistent with your branding guidelines. 
• Trends: New trends keep emerging with time. With new trends, users’ style and type of consumption of content also changes. Their needs, preferences, and interests also change. Keep track of all the new emerging trends to meet users changing preferences. 
• Influencers: Influencers enjoy a strong following on social media. Choose influencers that align with your brand’s objectives and philosophies and increase your brand awareness and engagement. 

To measure the effectiveness of your social media efforts, you must consider the ROI of your social media. It ensures your efforts are well aligned with the goal and your resources are utilized efficiently. By calculating the ROI of your social media you can optimize the budget, make wise decisions, identify opportunities for growth, improve accountability and accessibility, minimize risk, etc. Lumia 360 provides digital solutions to small and medium businesses. Our solutions have achieved a high success rate for our clients. 

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