Social media has become an integral part of any marketing strategy. With billions of users across various platforms, businesses can no longer afford to overlook the potential impact that social media can have on their bottom line. However, simply having a presence on these platforms is not enough; marketers must be able to measure and demonstrate the return on investment (ROI) generated by their efforts. This article will explore key performance indicators (KPIs) that every marketer should track when measuring social ROI.
One of the most basic metrics for measuring success on social media is reach and impressions. Reach refers to the number of unique users who have seen your content, while impressions are the total number of times that content has been displayed. These two KPIs provide insight into how many people you’re able to engage with through social media.
However, it’s important not to get too caught up in these vanity metrics alone. High reach and impression numbers don’t necessarily equate to high engagement or conversions. Instead, use these figures as a starting point for understanding your overall audience size and potential influence on the platform.
To maximize reach and impressions, focus on creating valuable content that resonates with your target audience. Utilize trending topics and hashtags strategically to increase visibility. Experiment with different post types (images, videos, carousels) to see what performs best within your niche.
Engagement Rate
Engagement rate is another crucial KPI for measuring social ROI. This metric goes beyond just reach and impressions by indicating how many people are actively interacting with your content in meaningful ways.
The most common forms of engagement on most platforms include likes, comments, shares/retweets, saves/bookmarks, and clicks through to external links or website pages from the platform itself. Each action shows that users found value in what you posted enough to want others within their network also see it too!
To calculate your overall engagement rate for a given time period (day, week month), add up all instances of these actions then divide by total number people reached during same timeframe expressed as percentage:
Engagement Rate = (# Engagements / Reach) x 100%
Aim for an average engagement rate above industry benchmarks which typically fall between 1-3%. Anything lower suggests there may be opportunities to improve content quality or adjust posting frequency/timing based upon when target audiences tend watch most frequently. Regularly monitoring this KPI helps identify areas needing improvement such as more compelling headlines, better visuals, or interactive elements like polls/quizzes that encourage greater participation rates.
Conversion Rate
While reach, impressions and engagement are important social media metrics to track, they don’t necessarily translate into tangible business outcomes – unless those actions result in conversions! This could mean anything from signing up for a newsletter subscription list, completing a checkout process on ecommerce site, filling out contact form requesting more information about products/services offered by company.
In order to accurately measure conversion rates specifically tied back toward specific pieces of social content shared publicly online across multiple channels at once requires implementation robust UTM parameters tracking solution that enables marketers attribute new leads sales directly originating from organic posts versus boosted advertisements paid for promotions. Doing so provides critical data needed optimize future campaigns aimed increasing profitability overall while also demonstrating clear link between efforts made maintaining active presence on chosen platforms contributing positively bottom line results.
To calculate conversion rate, divide number of desired actions taken (signups/purchases/etc.) by total clicks-through originating from each platform expressed percentage:
Conversion Rate = (# Conversions / # Clicks) x 100%
Industry average benchmark percentages vary wildly depending upon which type activity being measured along with nature product/service being promoted. However striving achieve rates above 2% generally considered healthy starting point indicative content resonating well enough drive meaningful business results worth investing additional resources further development.
Customer Lifetime Value
Beyond initial conversions though, it’s also important look beyond short-term gains achieved via social media campaigns towards longer-term customer lifetime value (CLV). This refers total amount money expected spend over entire relationship period between brand and individual buyer after first purchase made.
Leveraging data collected from CRM systems allows marketers estimate approximate CLVs associated with customers acquired through various acquisition channels including paid search, display ads, email marketing AND social media. By factoring this into analysis along with other KPIs discussed above provides much more holistic view whether efforts dedicated toward maintaining active presence across chosen platforms delivering positive ROI overall.
In order accurately calculate CLV requires gathering key pieces of data over time:
- Average purchase value
- Number purchases made per year
- Estimated length customer relationship in years
Multiply together to arrive at approximate dollar amount represents lifetime revenue potential associated with average buyer acquired via social channels. Divide total cost attributed toward generating new customers (ad spend, influencer partnerships etc.) by overall CLV figure provides accurate picture whether efforts worth pursuing from profitability standpoint going forward.
Return on Ad Spend
Lastly but certainly not least important KPI to track when measuring social media ROI is return on ad spend (ROAS). This metric indicates how much revenue generated for each dollar invested promoting content paid advertising campaigns across chosen platforms like Facebook Ads Manager, Twitter Ads or LinkedIn Sponsored Content.
In order accurately calculate ROAS requires having precise data available related number clicks-through originating from ads as well cost-per-click pricing structured agreed upon between brand platform provider. By dividing total sales revenue driven directly attributable toward sponsored promotions by aggregate ad spend figure expressed percentage provides clear picture whether campaigns delivering positive ROI worth continuing investing resources further optimization testing.
ROAS = (# Sales Revenue / Ad Spend) x 100%
Industry benchmarks vary widely depending upon nature product/service being promoted along with specific audience segments targeted via ads. However aiming achieve ROAS above 300% generally considered healthy starting point indicative content resonating well enough drive meaningful revenue increases worth pursuing further optimization testing opportunities going forward.
In conclusion, tracking these key performance indicators (KPIs) – reach & impressions, engagement rate, conversion rate, customer lifetime value and return on ad spend – enables marketers accurately measure social media ROI while also providing valuable insights how to continually optimize efforts aimed driving positive business results over long term. By regularly monitoring this data alongside other relevant metrics like brand sentiment or competitor benchmarking provides holistic view whether chosen platforms contributing positively overall digital marketing strategy worth continuing investing additional resources further development going forward!
