- ROI stands for return on investment. Social media ROI reflects the time and money your business spends creating and managing your social media presence.
- A successful social media strategy will vary from company to company; there is, however, a variety of tools that can help you track your progress.
- Focus on engagement, not vanity metrics like follower counts.
- This article is for marketing and communications professionals who want to assess their social media marketing efforts and determine their return on investment.
"Are my social media efforts successful?"
It's a question we've asked ourselves since the advent of social media; even now, more than a decade after social media became a part of everyday life, we're no closer to having a cut-and-dry answer. Because every business and every social platform is different, success has a different meaning for business professionals and brands. Plus, social media's changing algorithms means that the metrics for success – and the tactics to get there – need to be reevaluated on a frequent basis.
Social media has proven itself to be a mainstay of modern business, so you should have a strong, active online presence that engages with customers regularly.
And while there is no one way to know if you're "successful," there are plenty of ways to track your engagement rates, identify and fulfill your goals, and get a general idea of where you stand among your competition. Here's how you determine if you're hitting the mark.
What is social media ROI?
ROI stands for return on investment. Your company's social media ROI means that the time and capital you invest into it is creating the value you need to grow. The work put into social media includes personnel time, hours spent creating content, ad spend, and time spent managing those ads and building a social media presence. If the amount of time and resources you put into social media exceeds the new leads or sales you're making, you may not be justifying the ROI enough to continue.
How to track social media ROI
There are several factors to consider when formulating, setting up and tracking social media ROI:
1. Have a plan.
The first step in determining your success in social media marketing is developing a detailed plan that addresses the following:
- What you want your social media to do for you
- How you plan to accomplish your goals
- How you plan to track engagement, i.e., which metrics you plan to use
- How you plan to analyze your results
"I would recommend starting with the objective," said Aalap Shah, founder of 1o8 agency. "Is it brand awareness? Is the campaign meant to drive in-store retail? Based on that, pick awareness or conversion metrics."
Once you know the goal, next, you'll want to pinpoint the metrics you want to track – like engagement, audience, reach, or sentiment – and then how you will apply that information to your strategy.
From there, there are several media management and sentiment analysis tools available to help. Google Analytics is a comprehensive website tool that is easy to set up and use. Hootsuite Insights helps you track engagement and build custom reports, and Keyhole shows you when your users are most active and likely to engage.
2. Determine your goals.
Many organizations that report having difficulty measuring social media ROI have not defined specific, tangible goals. The key to successfully measuring ROI is establishing specific goals and then building your strategy to specifically accomplish those goals.
"Set a clear outline around the metrics you are tracking," said Dan Willis, founder of the Millennial Motivator. "Each marketing effort should have clear community growth that is dialed in on actual engagement and conversion."
Try the SMART method – Specific, Measurable, Actionable, Realistic, Timed – to set your goals and decide how you will accomplish them. You should be looking to increase engagement (likes, shares, comments), website traffic, brand awareness or in-store traffic, for example.
"For small businesses, goals should be established based on short-term goals, and built out incrementally and scaled from there," said David Azar, co-founder and CEO of Outsmart Labs.
You can also look back at what your company has done previously to help determine your goals.
"How effective has social media been for your business?" said Ellen Borza, SEO and PR manager for Web Talent Marketing. "What can you learn? Take a deep dive to establish a baseline first. From there, you can define attainable but challenging goals.'
3. Have a defined vision.
"One of the most common mistakes I see is that small businesses don't have a clear vision of how to measure the success of their social media marketing efforts," said Kaisa Suojanen, head of growth and marketing at Startuplifers.
Have a vision or end goal in mind that you want those smaller goals to work up to or achieve. This unifies your social media efforts.
Try to ensure that your end goal is in keeping with your business's branding and communications guidelines so that everything is uniform. You can also use your company's mission and vision statements to spark ideas for your social media strategy.
4. Ignore 'vanity metrics.'
There are several metrics to track once your campaign gets underway. Some of these metrics are referred to as "vanity metrics," because they are visible to the naked eye, but these metrics don't necessarily tell the whole story of the success of a campaign.
Willis cautioned against "vanity metrics," such as a high follower count or page views, where none of your followers engage with your content.
"The reality is [that] your reach, likes, and followers are relatively insignificant if that community is not engaging and converting," said Willis. "Scrap the vanity metrics, and double down on engagement."
Consider tracking more in-depth metrics, such as conversions from the traffic generated by a campaign, to tell the full story of your success and therefore properly measure ROI.
Commit to examining your analytics and understanding exactly what they mean. It takes time to learn what comprises a successful post. Monitor your social media over an extended period until you see trends. You should see what works, what doesn't and things like the best times to post.
You may also want to consider using advanced tools to help you dig deeper into your metrics. These platforms help you pull together information from many sources into one reporting tool, making it easier to glean in-depth insights into your campaign.
5. Build relationships with your followers.
"When it comes to organic strategy, it's about building up your brand image, cultivating relationships with your audience and proving yourself trustworthy," said Kiara Martilla, founder of Kiara Jennifer & Co. Marketing. "Your audience should feel comfortable enough to like, comment and DM you without being blasted with a sales pitch."
When your followers feel that they have a relationship with you, they are more likely to engage with your content and follow through with a purchase or commitment to your business.
In this age of consumers favoring authentic content, relationships are vital to your social media strategy. Respond to comments and messages, and offer frequent opportunities for followers to engage, like giveaways, asking for responses in the comments or featuring followers in your posts.
Martilla said that staying true to the origins of social media – being social and making connections – helps you to stay authentic and avoid overdone posts that alienate followers.
"The more ways you can relate and connect, the more points of connections you can create with [your followers], the more they are going to feel drawn to you."
6. Focus on quality, not quantity.
"Many small businesses use social media to establish an online presence," said Borza. "And while that's a valid reason to use it, don't just post for the sake of posting. Low-quality posts lead to low reach and poor engagement. Instead, focus on creating engaging content, even if that means you're only posting once a week."
Make it a part of your social media strategy to give good thought to and have a reason for every post. Your social media is there to serve your business and achieve a goal, not just to exist. Spend time considering your photo, caption and hashtags as is appropriate for each platform. Publishing tools like Hootsuite or Later help you set up and preview posts before they go live.
"Don't be impatient," said Azar. "While it may be tempting to jump to conclusions about the success of your campaigns early on, patience is essential. Rome wasn't built in a day, and neither is a robust social media marketing strategy."
7. Analyze spend against your success rates.
Dollars are one of the easiest metrics to measure. As you analyze the success of your campaign, be sure to consider all the money spent and how it was spent. Key areas in which you can spend on social media campaigns include:
- Ad dollars. How much money was spent on the campaign? Did the amount spent per click pay off against the number of conversions that resulted from the ad spend?
- Time spent. What were the billable hours spent developing and executing a campaign, including time managing each component and creating the content? How does that spend compare with the effort that went into the campaign?
- Sponsorships. Did you pay an influencer to create content for your brand? If so, how well did the influencer deliver? Did they produce the brand awareness, email signups, conversions or other results that were desired as a result of the campaign?
Key takeaway: In determining your social media ROI, be specific about what you ultimately want to accomplish and what metrics you'll focus on to evaluate your progress. Rather than be caught up with "vanity metrics," like the number of followers, focus on engagement (or conversions), and, finally, be patient, it takes time to develop a successful social media strategy.
Stella Morrison contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.