Social media marketing efforts is one of the most confusing campaign types to measure return on investment for, but is just as important as measuring any other type of business building effort. While many social media marketing events do not require a financial expense, unless you are paying staff members to facilitate them or content creators to create materials, they are still a cost of time and effort. There is also the importance of understanding the metrics in order to optimize time and effort to get the best results.
One of the reasons social media marketing can be so hard to measure for ROI is knowing how to decipher so many of the new measurements and determining what equates to the best ROI for your business. Metrics such as Return on Influence and Return on Engagement measurements both are numbers relating to the success of your social media marketing. How they fit into your ROI reports will depend on how you measure success. If you measure by conversion rates, knowing you have a high return on engagement that lead to site traffic and then to sales will be critical to know if any part of the process is failing to convert social media followers, to site visitors and on to be paying customers.
Being able to show quantifiable results for your social media efforts will clearly portray where marketing budgets should be allocated. For example, if your business is active on three social media sites and one is booming, one is “okay” and the other isn’t getting any engagement at all, you might decide to put your budget into advertising on the social media channel that is giving you the most success, or investing in advertising as a means to create more success on the weakest social media channel. Knowing which one is best will depend on your business model. Some businesses, such as an accounting firm isn’t going to do as well on some social media sites as others and putting the money into creating more success on the weaker sites would be a waste. But, for example, you know accounting firms do well on LinkedIn and are trying to establish a better reputation there, and then advertising dollars could lead to a great return on investment.
Being able to review your ROI with social media marketing will allow you to see what areas can be optimized and what needs to be adjusted, or put aside. If ROI for any particular social media site is low no matter what extensive efforts you made, then continuing to spend time and advertising money there is a waste of your time and resources. Replicating what you see is working out to be the highest ROI will bring exponentially bigger profits than attempting to create social media marketing success without knowing how effective it actually is.
