Calculating ROI for your Social Media Marketing Campaign March 7, 2014 19:24
The attached PDF is from a recent Power Point presentation that I did on "Calculating ROI for your Social Media Marketing Campaign". This blog post is a compilation of my notes from the presentation. Calculating ROI for your Social Media Marketing Campaign
Definition of ROI:
To start, we have to have an understanding of ROI (Return on Investment). On paper, ROI could not be simpler. To calculate it, you simply take the gain of an investment, subtract the cost of the investment, and divide the total by the cost of the investment. Or:
ROI = (Gains – Cost)/Cost
Return on investment - or ROI - is the rate of revenues received for every dollar invested in an item or activity. In a marketing sense, knowing the ROI of your advertising and marketing campaigns helps you to identify which techniques are most effective in generating income for your business. It's also important to note that your time invested in your marketing campaign also has a cost co-efficient.
Social Media Marketing Campaign:
Decent ROI requires a minimum commitment to having active Facebook, Twitter, and Linked In pages as well as a brochure presence on Google+. As demonstrated by the graph in the attached PDF, social media brand engagement improves rapidly with the number of platforms being used. The goal is to have an effective & robust campaign that is well-integrated with your overall marketing campaign for your business.
Creating an effective Social Media Marketing Campaign:
To have any kind of return requires a comprehensive and robust social media marketing campaign. I constantly hear that “Social Media is just not effective for my business”. The actual reality: most haven’t put the time and/or resources into building an effective campaign, they aren’t consistent, don’t follow best practices, etc.
Typical Marketing Campaign:
As with conventional marketing campaigns, results are often not realized until long after initiation, resulting in a campaign starting to gain traction and become effective right when enthusiasm is waning. If this is factored into the campaign, this can be avoided and/ or accounted for.
Calculating ROI Using Simple Statistics:
You can evaluate your ROI using the above mentioned statistics, but this doesn’t tell the whole story Notice in the attached PDF, there are different “Calls to Action” with sales being only one of the 5 stats measured.
Use Google Analytics’ Social Analytics to track network referrals, conversions, landing pages and social plugins:
With Google Social Analytics, you can track the engagement and what that means for your website traffic and ultimately your sales.
Complete Picture of Social Media ROI:
Efficiency, Reputation, Differentiation, Risk Reduction, Client Retention, Brand Association, Long Term Revenue, Environmental Impact, Economic Development, Opportunity Creation, Immediate Revenue, Perception Shifting, PR & Exposure, Client Education, Network Growth, Building Trust, Innovation…Notice that out of the 17 listed elements in the attached PDF, there is only one that you can measure right away. Remember, Social Media is soft marketing & about casting a wide net.
Social Media Added Value:
Ultimately, the difficulty in calculating ROI lies in how closely specific revenues can be tied into their source. For example, if you engage in a specific social media marketing campaign, you may not be able to accurately determine how much an increase in your revenues was a direct result of that campaign because you may have had other sources that resulted in increased traffic to your website or into your business. Also, if you have a comprehensive (and therefore well-integrated) marketing campaign with Social Media being only part of the whole campaign, it is difficult to specify exactly where each dollar in revenue is generated.
According to Hubspot, social media produces almost double the marketing leads of trade shows, telemarketing, direct mail, or PPC. Thereby proving once again, that a recommendation from a friend is golden.
In the end, it’s all about the results…Calculating ROI for your Social Media Marketing Campaign