How To Measure Your Social Media Advertising ROI


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As one of the most powerful digital marketing channels, social media is essential to your company’s success. Your team should monitor the return on investment (ROI) of social media marketing and advertising.

How can you measure social media advertising’s ROI?

Read on for a step-by-step guide to measuring the ROI of social media advertising. Tips to convince company decision-makers that social media is worth it.

Kobe Digital offers professional assistance in Social Network Advertising. Give us a shout or send us an email! 

What’s the ROI of social media marketing?

Each business has a different return on investment for social marketing. But, it’s the same:

Return on Investment/Revenue x 100 = ROI

For your reference, here is a breakdown of the ROI formula:

  • Revenue is the revenue generated by social media. If 25 sales are made, your business could make $300.
  • Investment is the amount your company spends on social media campaigns. For example, you might spend $200 on advertising, and $50 on software subscriptions.
  • ROI: This is the return on your investment (ROI). If your company makes less than zero percent, you haven’t. 

This example shows the ROI of social media advertising.

$300 / $250×100 = 120%

Your company will earn 120 percent of its investment.

Although ROI formulas are intended to maximize your bottom line and increase profits, companies also consider other benefits such as brand awareness and user engagement. 

Before you can measure your ROI, your team needs to decide what is most important for your business.

What’s the ROI of social media marketing?

Every digital marketing channel must be measured by your team to determine if it is having a significant effect on your company.

The social media advertising ROI provides insight into the performance of your campaigns. 

If you don’t monitor the performance of your advertising campaigns, you risk losing your investment. Regularly measuring your social media ROI can help you maximize your success.

How do you measure your social media advertising returns

Ready to learn how to measure social media advertising ROI? These eight steps will show you how to measure social media advertising ROI.

1. Create a budget for social media

Many companies are open to social media experimentation without putting aside a budget. It can be hard to calculate your true ROI when you launch a strategy with no budget.

A company might start an advertising campaign with $50 per day. However, you don’t have to stick to that budget.

Determine the amount of money you want to invest before you launch any campaign.

You and your team need to coordinate with company decision-makers to set a budget for large-scale social media advertising campaigns. 

Budgeting should consider a few things:

  • Advertise
  • Software
  • Labor
  • Training

If your company is interested in partnering with a social media agency, you should research its costs. This can help reduce your staff’s workload and improve your marketing strategy.

2. S.M.A.R.T. Goals

Now that you have set a budget, it’s time to decide what you want from social media advertising. What is your timeline for the six-month campaign?

Concentrate on building S.M.A.R.T. To get the best results from your campaign, focus on building S.M.A.R.T.

  • S: Be specific in your social media marketing goals You should address the five Ws (whom, what, where, and why). This goal will give your team a solid foundation for promoting your company on social media.
  • M: Establish a Measurable goal for social media advertising. This could be the number of followers, sales conversions, followers, or followers.
  • A. Set a social media advertising goal. Talk to a consultant to help you determine a realistic goal.
  • R – Create a Relevant social media marketing goal. If your goal isn’t in line with the company’s current strategy, it can be difficult for people to support you.
  • T: Set a time-bound social media goal. A one-year goal can be tied to a three-to-six-month goal.

Think about your goals for your social media marketing campaign. This will help you achieve the best results.

3. Calculate a monetary value

After your team has set your goals and budget it is time for you to look at the impact of user actions. User actions can include a sale, follow-up, or sign-up. All have an impact on your social media ROI.

Customers and your team can easily calculate the sales value. If you don’t know how to determine if a follower will be a customer,

The industry averages might be used to refer to your team. A social media marketing agency may give you insight into the value of paid followers.

Consider the lifetime value of each customer. 

If your team can compile this information, it can greatly impact your social media advertising ROI calculations. This information could also be used by company leaders to prove that social media marketing is worthwhile.

4. Set a benchmark for your starting point

Next, measure your social media advertising ROI. Take a “before” snapshot.

It is possible to measure the impact of your social media marketing strategy and establish a reference point. 

Keep track of your performance, even if your campaign is an old one. You can see the effect of your new campaign on your previous campaign.

These are some metrics that you might be interested in:

  • Click here to take action on the page
  • Post engagement
  • Likes on Page
  • Followers
  • Conversion rate
  • Mentions
  • Revenues generated

You can access these metrics from your account dashboard on each social media platform such as Facebook, Twitter, and Instagram. The data can be quickly compiled in Excel or Google Sheets by your team.

5. Track social-media ROI with tools

Tools that track social media advertising ROI are crucial. Next, choose the one you need and test them.

These are the top tools to improve social media advertising ROI.

  • Google Analytics Your team can monitor the traffic to your website and track your progress towards achieving conversion goals such as generating leads or sales. 
  • Hootsuite Social media ROI Calculator: To calculate your campaign’s return on investment, you can use Hootsuite social media ROI calculator. This calculator considers multiple factors like ad spend, labor, and other variables.
  • Facebook Pixel: This tool will be essential for businesses that are focused on Facebook. Facebook Pixel allows you to measure your ROI and optimize the effectiveness of your advertising campaigns.

The tools listed above are all free, so your team doesn’t have to worry about needing to spend more on these tools. 

6. Important Monitoring metrics

No matter how new you are to social media advertising, it doesn’t matter. It doesn’t matter if you are new to social media advertising.

To increase sales via social media advertising, you need to focus on metrics like conversion rate and cost-per-click (CPC) and not just page views. 

But vanity metrics shouldn’t be ignored. Maybe your ads get more views than conversions. 

Your team can use this data to improve and reassess their campaign.

As you launch, track, and monitor your social media advertising campaigns, keep your team’s eyes on the most important metrics. Your S.M.A.R.T. can be described.

7. Monitor social media advertising costs

You can only improve your social media advertising ROI if your team monitors your advertising expenses. 

Your company may advertise on Facebook or LinkedIn. However, when you calculate your social media advertising return, you’ll find that advertising on LinkedIn generates a greater return than advertising on Facebook.

This data can be used by your team to create a data-driven, performance-driven ad campaign.

Based on the results of your Facebook or LinkedIn campaigns, you may decide to spend more advertising on LinkedIn.

This is a great opportunity to make the most out of your advertising spending across different platforms.

8. Publishing an actionable report

Reports are an integral part of social media advertising ROI. The report shows the company the results of its advertising campaigns. You may also be able to review your strategy and offer suggestions.

Reports can be created on a monthly, quarterly, or annual basis depending on the business.

To ensure the best results, your team should create a monthly performance report. This report can be used by your team to monitor monthly performance and spot potential problems.

These tips can help you maximize your success in sharing your report with business leaders

  • Remember that even though your team may understand every aspect of social media advertising, they are not able to comprehend the needs of your audience. Make sure your report is easy to read for everyone.
  • A template saves time.
  • Discuss what is important. You could have your team create a S.M.A.R.T. This will help you gain the support of decision-makers in your company. 

Each report your team creates should be actionable. Your business leaders and department must see how your team can improve the campaign’s performance to get better results.

How do you improve your social media ROI?

Businesses that are focused on continuous improvement have the best social media ROI. 

How do you increase your social marketing ROI? Here are three quick tips:

If your team doesn’t keep up with the latest social media trends, they will fall behind. Read about the most current social media strategies and news to improve your ROI.

Try A/B testing

A/B Test allows you to see which version of an ad works best on Facebook.

Be inspired by your competition

While you shouldn’t copy a competitor’s strategy in the social media advertising marketing, you can look at their examples to see how you can adapt it to your business. 

Are you looking to increase your social media advertising revenues?

Do you struggle with low social media advertising ROIs? Kobe Digital could help.

Businesses that want to use social media more effectively can trust us. We have over a decade of experience and a 91% retention rate. Find out how we can help your company improve its social media advertising ROI.

To discuss your strategy, call us or email us.

About the author

Kobe Digital is a unified team of performance marketing, design, and video production experts. Our mastery of these disciplines is what makes us effective. Our ability to integrate them seamlessly is what makes us unique.