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Measuring the return on investment of social media marketing

The world’s most well-known social media platforms, Facebook, YouTube, Instagram and Twitter have daily active users of 1.6 billion, 149 million, 600 million, and 134 million, respectively. WeChat, the most inseparable of us, has more than 1.2 billion monthly active users. According to statistics, people spend more than two hours on social media every day on average. It is no exaggeration to say that social media is already an indispensable part of our lives.

How to determine how much value social media marketing can bring to a company? Thousands of companies have solved this problem, and they can usually answer it with cents accuracy.

Not every social media return on investment (ROI) must be measured in money, but you should always tie ROI to your company’s goals. Of course, gaining more than investing is a desirable goal, but many companies are more concerned about how to spread their reputation. They may want to use social media to promote events, to increase the attention of upcoming large-scale events, and so on.

In any case, social marketing performance cannot be judged for granted.

Research shows that 44% of corporate marketers admit that they have no specific plan to measure the positive impact of social media on them. 36% of people said that they have some understanding of these positive effects, but only from a stereotypical perspective, not a quantitative perspective.

No matter what your goal is, you can define, set, and measure, and then carefully observe the results to determine what your return on social media investment is. You can use the following methods to achieve your goals.

 

Set social media marketing goals that can provide specific benefits

 

The first step in calculating the return on investment of social media marketing is to determine exactly what your “returns” are. The income may be a specific monetary return, which can be calculated using the conversion rate, which we will introduce in detail later. Or, it may be an intangible reward, such as turning social media into a loudspeaker for promotional activities.

Common goals for social media use include:
-Enhance brand reputation
-Improve customer service through social media connections
-Increase traffic to specific webpages
-Increase the redemption of specific offers
-Increase in application downloads or course registrations
-Promote other marketing channels, such as new videos or blog content
-Obtain brand-related social recognition from comments

No matter what goals are set, make sure they are related to actual specific business benefits. Don’t just target “many followers”. If your goal is to have a lot of followers to effectively broadcast and promote the latest promotions or blog posts, then what you really want is the actual response to these posts by the larger follower group in the entire audience segment .

Each goal should be linked with quantifiable marketing indicators. Likewise, think deeply about what your business wants to accomplish, rather than set goals for granted.

For example, you want to attract a large number of users to redeem the coupons you provide. In this case, the target can be the total number of redemptions (for example, 2,000), or the ratio of the number of times the coupon advertisement is seen to the actual number of redemptions, which is the conversion rate (for example, 16 out of all impressions). % Converted to convertors).

The goals you set will affect the way you deal with advertising and how you adjust facebook advertising hong kong to improve results.

 

For the amount of return on social media investment, please plan the user journey

 

If you are very interested in how much social media marketing or advertising can bring to your company, you can calculate the investment ROI in just a few minutes.

First, you need to track the user journey and the role that social platforms play in it. Since few people buy goods directly from social platforms or make appointments from social platforms, it is necessary to enumerate all the steps that users may go through between seeing social media information and finally paying for purchases.

The following is an example of a user journey:

A user found a local car wash shop on Instagram, which provides a monthly membership service for unlimited car washes
->The user clicks on the post to view the detailed information
->The user clicks on the link in the post description to arrive at the page where you can purchase members
->Users purchase membership

Each step represents a conversion rate. Tens of thousands of people may see your ad, but only 10% of them will choose to click to view more information. Among these 10%, perhaps only 20% have visited the provided link. Of these landing page visitors, perhaps 14% will eventually buy. If the membership fee is $240 per year ($20 per month), the company’s break-even point for each ad impression cost is calculated based on the overall ratio: $240 x 14% x 20% x 10% = per impression 0.67 USD

According to this calculation, as long as the cost of each advertisement to each user is less than 67 cents, then only 0.28% of the advertisements converted will still generate profits. Activities can also try creative methods to increase the conversion rate between each step, such as providing users with different car photos based on the brand page they are following.

For free advertising campaigns, the cost of running social media can be used to replace the cost of advertising when calculating ROI. For example, if you pay an employee US$673 a week and spend one hour a day managing and publishing social media content, you can determine that the natural cost is: (5 hours/40 hours) x $673 = $84.13 per week

It all depends on how to define costs, calculate benefits, and organize advertising campaigns so that the benefits exceed the costs. With the great influence of social media today, an excellent china digital marketing agency should know how to allocate marketing budget clearly and methodically to maximize profits for the company.