I had a hard time understanding social ROI when I first started reading about it. I questioned how other corporate executives evaluated the factors that affect a campaign’s return on investment and how they determined success. I’ll be the first to say that I struggle with math and formulas. But I also saw that while addressing social media measurement, the majority of specialists had done so at the expense of thoroughness and excessive complexity. I made the decision to clarify this subject at that point.
In this post, I deconstruct the procedures for calculating social media ROI and talk about how consumer insights may help companies take their advertising to new heights.
The Importance of Social Media ROI
If you’re running a social media campaign without taking the time to use an analytics tool to both better understand your audience and assess if you’re getting the results you want to achieve, then you really don’t know where you’re going, as Lewis Carroll (and later, George Harrison) so famously said.
In order for your marketing strategy to be successful, you need to know where you are, where you want to go, and where you should be headed. This is why social ROI is important. If not, it would be like to throwing all of your time, money, and effort into a very deep hole.
How Consumer Insights Improve the ROI of Social Media
Over the past two decades, there has been a significant change in how customers find, evaluate, and purchase items. The widespread use of the internet initially altered the way we shop, and the introduction of smartphones expedited this transformation even further. The worldwide pandemic of 2020 completely flipped everything on its head once more as marketers were still attempting to make sense of this rapidly changing reality.
The same issue currently confronts marketers all across the world: what do customers want?
It might feel tough to figure out how to draw clients’ attention in a crowded environment where things change too quickly for any of us to keep up with. Consumer Insights seeks to address this issue by providing answers to important queries like:
- Who are we trying to reach?
- What drives and piques their interest?
- Exist distinct groups or communities among my target audience?
- What changes are there in consumer trends?
Social listening versus consumer insights
Although they are comparable, social listening and consumer insights are not the same.
Consumer insights take social listening a step further by including qualitative analysis to better grasp the meaning of the data and what they might reveal about customers. Social listening, for instance, can reveal that individuals on social media discuss Scotch whisky more frequently from October to February. Consumer data, on the other hand, indicate that consumers like whiskey for its warming properties during the chilly winter months and that they’re also curious to learn about new whisky cocktail ideas. With the help of this social media data, companies can create more relevant and tailored messages that are more likely to resonate with customers, resulting in more sales.
By better comprehending the Tribes that make up their consumers, marketing professionals may use platforms for consumer insights like Meltwater to find new sources of income. Tribes are groups of like-minded people who are part of a larger audience and who share more than just demographics. They may be similar in a variety of ways, including the media they watch, the influencers they follow, the products they buy, the online discussions they take part in, the material they publish, the social media platforms they utilize, and more. You can more successfully target campaigns towards your tribes if you are aware of everything. In this way, since tools for consumer insights help you receive the answers with a high degree of precision, you no longer need to hazard a guess as to which medium to advertise in, which influencers to engage with, or what sort of messaging you should employ!
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How to determine social media marketing’s return on investment
Here is where you should begin if your company has been attempting to understand how to calculate the return on investment for social media marketing.
1. Determine your destination.
Choosing your destination, or your aims and company objectives, is the first stage in determining the ROI of social media marketing. What do you hope to accomplish with your social media campaign in the end? For instance, you may decide to concentrate on one or more of the objectives listed below:
- Increasing website and blog traffic
- rising call volume and leads
- Increasing brand exposure and reach online
- enhancing your authority and establishing your brand as a thought leader
- increasing conversions and sales
2. Make a social media campaign plan
In the end, the social media campaign you choose to undertake will be determined by your objectives. For instance, if you choose to target leads, you will need to develop a lead magnet—an incentive that will persuade your prospects to give you their email address or phone number. In the event that you choose this course of action, you might want to spend money on some primary research and leverage the insights you uncover as gated lead gen material. Or you may decide to start a blog as a long-term campaign to create leads from organic traffic while simultaneously running a Twitter card campaign or a Facebook ad campaign to get leads from these two channels right away.
The greatest alternative for short-term sales on your eCommerce website may be Facebook carousel advertisements, but app downloads are a better long-term strategy for getting information directly to the buyer’s mobile devices.
As was already discussed, you must also tailor your social media approach depending on customer information. You can focus on the kind of content you need to be producing once you know where your audience hangs out. For instance, Instagram, Facebook, and Pinterest are the greatest platforms for photos. You will need to reassess your campaign and creatives if the majority of your target audience is a B2B audience that frequents LinkedIn and Slideshare.
3. Follow everything
The days of “Post and Pray” content sharing and aimlessly stumbling around the social media landscape in search of the most effective postings are long gone.
The beautiful thing about web marketing is that practically everything can be measured. Everything from the social media material that performs best to the route that visitors take on your website to signups, leads, purchases, and follow-up! The client experience may be improved by monitoring, measuring, and customizing everything.
Using a CRM, such as Hubspot’s Inbound Marketing Software, allows you to personalize and monitor the whole visitor experience. In reality, the majority of effective marketing CRM systems will provide you the choice to link your social media analytics tool with your internal CRM data through APIs. This makes it simpler than ever to identify trends where prospects leave the customer journey and fail to convert by enabling you to track “moments that matter” touchpoints along the customer journey. With this information, you can design campaigns, monitor which ones are effective, and allocate time, energy, and resources to social media initiatives that are delivering the desired outcomes.
4. Identify the lead or sale’s worth.
What does return on investment (ROI) in social media mean to you? In the end, calculating ROI is all about figuring out whether your marketing efforts were profitable by calculating the cost of a lead or a sale. Whether the ROI from social media efforts was worthwhile to you is entirely up to you to determine.
The only method of calculating social media ROI that actually makes sense is to consider whether it was worthwhile to spend $5 on a Facebook ad in order to acquire a lead that later resulted in hundreds of dollars’ worth of sales on your website. There are many social media tools, methodologies, and complex formulae for doing this.
You must choose which social media marketing initiatives are worthwhile to invest in and which you can ignore.
Don’t overlook the cost of your social media marketing firm or, if you’re doing it in-house, the salary, time, money, and effort it takes to go from point A to point B when calculating ROI.
5. Create a plan for success.
Once you have determined your social media marketing ROI, it is time to use a social analytics tool to examine your results, determine whether they are leading you in the right direction, and then adjust and fine-tune your campaigns to put you on a path to social media success.
Benchmarking your performance against data from a different time frame is a smart idea; typically, brands do this every three months. They may use this to determine where their social media initiatives have had an impact. If you choose to benchmark against your rivals, you can also do this for them. A major social statistic to employ is social media share of voice.
