Digital Marketing

5 Steps To Calculate Your Social Media ROI

By Just Digital Team
5 Steps To Calculate Your Social Media ROI

Most social media brands are measured by their amount of followers, likes, views, or subscribers. There are a variety of ways you can measure the effectiveness of your brand online, but it all depends on the platform. For some, referral traffic from social media is the key indicator to the effectiveness of a campaign. A good measurement to define their success. But the simple question is, how do you calculate social media ROI? How do you know when good is good!

There is no common denominator in measuring your social media ROI. What can be a hurdle is identifying the behaviors of your traffic, and understanding the effectiveness of your social media marketing efforts.

So what’s the best way to go about the problem? Here are five steps to properly measure the effectiveness of your social media strategy.

  • The first thing you have to do is identify your key performance indicators or KPIs. This means you have to determine what your goal is. Is it to drive revenue, build brand awareness, or solely for sales? Your KPI’s are defined by your goals.
  • The next step is aligning your objectives with your goals. In order to properly calculate, you need to break your long-term, big picture goals down into short-term check-ins. What is important to you? Mentions, shares, views or could also be monetary profit from product purchases, signups, or emails. What are you going to do to drive growth?
  • All of your goals can be measured, you just need the right information and the right strategy. You need to know the behavior of your audience in order to retain and convert them. There are multiple tools you can use to calculate your ROI. Two of the more popular platforms:
    • Google Analytics – you can use this tool to find out how much traffic and conversions your social media marketing is producing. You can also use it to set up trackable goals and how many of your audience convert.
    • Facebook Pixel – This tool can be used to track how many people have seen your Facebook ad, and then tracks their visit right up to conversion.
  • Define your success and assign values to your KPIs. This will make it easier for you to track your goals and then you can quickly get the projected monetary value of your goals to better plan for the future.
  • The proper way to calculate your ROI is by following this simple formula. Remember this formula is only effective if you want to calculate your monetary profit from you social media strategy. It’s different if you want to calculate your social media mentions, shares, views, etc.

Profit / Investment x 100 = social media ROI %

Although calculating your social media ROI is hard and vague, it isn’t impossible. Was this article helpful? Sound off in the comments below.

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