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Guide

How to Gauge ROI on Your Social Media Marketing Campaigns

As businesses scramble to incorporate social into their marketing mix, learn how to gauge a Return on Investment (ROI) for social media marketing initiatives.

Social media marketing is hot, with many businesses scrambling to incorporate social into their overall marketing mix. In the process, they are dealing with at least one big challenge: figuring out how to gauge a return on investment (ROI) for social media marketing initiatives.

Does Social ROI Really Matter?

Some marketers have said that ROI isn’t important with regard to social media marketing. They believe that businesses today must have a social media presence — that social is the equivalent of marketing “table stakes.”

Not so fast. Any marketer who implied that gauging ROI isn’t important for print, TV, radio or Internet advertising probably wouldn’t have a job for long. The fact is, gauging ROI is important for any kind of marketing or advertising campaign, including social media.

But how can you measure a financial return on investment for something as vague as Facebook likes or Pinterest pins? It’s not always easy, but it can be done.

 

Gauging ROI on social media marketing starts with setting goals for your social media marketing initiatives. In addition, these goals must be specific and measurable. For example, saying that you want to gain more Facebook fans or Twitter followers isn’t a measurable goal. Saying that you want to increase your Facebook fans or Twitter followers by x percent or that you want to accumulate x number of fans or followers, however, is measurable.
 

 

Who’s Visiting Your Website From Social Platforms?

One of the main ways social media helps generate sales is by having customers click on links from social platforms that take them directly to product pages on a website. With Google Analytics, you can determine which visitors accessed your website directly from a social media site, thus giving you a good idea of how much website traffic your social media marketing efforts are generating.

 
You can even measure how much time these visitors spend on your site compared to visitors who access your site from other sources, as well as how these visitors are engaging with your content. These are both good indicators of the effectiveness of your social media marketing efforts in drawing qualified customers to your website.
 
A tool is now available that enables you to take this measurement a step further and see actual online sales that result from buyers who visit your website via a Facebook post. Facebook has added a call-to-action button to some of its business pages that takes visitors directly to an online store where they can buy products and services. You can choose from several different call-to-action buttons, such as Shop Now, Sign Up or Contact Us. Using this tool, you can determine the volume of sales generated from your Facebook posts and links and compare this to the cost of using the button to get a true ROI number.
 

 

What About Bricks-and-Mortar Sales?

These methods are designed for gauging social media ROI as it applies to online sales. But can ROI also be determined for social marketing that leads to sales in your physical store?
 
This gets a little bit trickier. There are tools that track customers’ activity in the store via their mobile devices and then tie this into their use of social media on these devices. For example, one major retailer uses technology that sends coupons to those who follow or like them on social media platforms when they enter the store. These customers can then redeem the coupons on their mobile device at the point of sale.
 
This technology is currently cost-prohibitive for most small businesses. However, the cost will likely come down in the near future, which could make it available to small businesses within the next couple of years.
 
Gauging return on investment is important for any marketing or advertising campaign you launch, including social media. Take the time to decide how you will determine ROI before you plan and implement your next social media marketing campaign.
 
For more information about growing your business, visit Cadence Bank Fresh Insights.

 

 

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

 
 


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