What is Social Media ROI and what is its importance
Social Media ROI(Return On Investment) is seen as a metric or a typical parameter to evaluate the Success of a marketing campaign, it helps companies to calculate the revenue generated on amount Invested on campaigning held on various social media platforms like facebook twitter,linkedin etc
Marketers allocate resources and decide marketing budgets on various marketing campaigns based on Their previous performances calculated through social media ROI.
How to caluculate Social Media ROI:-
It can be roughly calculated from the below-given equation.
Social Media ROI= Revenue Generated From Social Media - Cost Of The Investment/Cost Of The Investment
For example, If the revenue generated from social media activity is Rs 1,00,000/- and cost of the investment is Rs 20,000/-
Social Media ROI would be 4:1, which implies revenue generated is 4 rupees for every one rupee spent.
Social Media Analytic Tools:-
Here we now discuss few analytics tools which will help us calculate social media ROI.
Google analytics;-It is the most widely accepted and used analytics tools used by professionals across The world, using google analytics we can track website traffic, signups, and conversions generated out of Social media campaigns.
Facebook pixels:- It is a small piece of java code which can be installed on all the pages of the website to Track various website metrics from lead to conversions, it also helps in remarketing the Target Audience.Using Facebook pixels we can also track website actions in particular like view content, search, Add to wishlist, add to cart, payment info etc.
HootSuite impact:- It helps us calculating social media ROI from our owned, paid and earned social Media Channels, it also provides us an option to create customize dashboards of leads generated and Conversions made through campaigns with creative graphs and tables.competitor bench marking is one Such incredibly useful feature on HootSuite impact, Through which one can closely analyze and monitor Their competitors content strategies about how to gain more followers and thereby increasing their Conversion rate.
Metrics to Calculate Social Media ROI:-
Metrics must be aligned to the objectives and goals which we would like to achieve through our social Media campaigns and hence metrics play an important role in calculating social media ROI and hence Must be chosen carefully.
Metrics like "Retweet", "Share", "CTR"(Click Through Rate),"Likes" are called to be as "Vanity Metrics" And are not considered seriously for calculating social media ROI and are often ignored by most of the Marketers,but they shouldn't be dismissed completely as they help us understand the strength of our Social media presence and the content which goes well with the target audience.
We can get more useful insights regarding the behavior of our target audience if we can focus more on Metrics like "Reach","Engagement","Leads" and "Revenue Generated" out of social media campaigns held
Now since we have learned about social media ROI and its importance, it's now the time to hit the board to make proper use of the analytic tools and start analyzing the metrics to find "Social Media ROI" and Value generated out of social media campaigns as nothing can guide us more than the results achieved.