As a small business, you’ve invested much of your budget into social media. You have a dedicated social media manager, a packed social media calendar, and a consistent posting schedule.
You’ve poured time, money, and your brand’s heart and soul into stories, lives, tweets, and posts. But the question remains. Are you getting your money’s worth?
Unquestionably, the world is moving online. So, building a strong digital presence is as consequential to branding as creating a great product or service.
In the fast-evolving world of digital marketing, social media is no longer an afterthought. Today, it drives brand visibility and customer engagement and directs revenue. It has become an essential marketing tool.
Global trends reveal that small, medium and big businesses are earmarking 30-50% of their total marketing budget for digital marketing efforts, most of which go towards social media. Therefore, measuring ROI or Return on Investment on social media is pertinent to business success.
But what is ROI? ROI is a performance metric that helps businesses understand how much value they’re gaining from what they’re spending.
The formula for calculating ROI is as follows:
ROI = (Return – Investment) / Investment × 100
But why is measuring ROI on social media pertinent to business success?
Presently, social media has evolved into a self-sustaining marketing tool. Some might even call it a full-fledged business engine. Amidst the reels, memes, and influencer collaborations sit tangible business impacts that convert, connect and engage consumers. ROIs then assist businesses in:
- Justifying the value of your campaigns, budgets, or ad spends
- Optimising your content strategy
- Driving more meaningful, profitable outcomes.
It is important to note that meaningful social media ROIs lie beyond likes, follows, shares and comments. Meaningful ROIs come from knowing if your social media campaigns are achieving tangible business results and the value they’re creating compared to your spending. Since ROIs don’t depend on the number of likes, follows, shares and comments, how do you measure meaningful ROIs on social media? Here are Dolphin Branding, a specialist branding agency’s top 6 tips:
Set Clear and Achievable Goals Aligned With Business Outcomes
Always start by defining your objective. Your ROI is only as strong as your strategy. These goals can look like:
- Increase website traffic by 25% in 100 days.
- Generate 50 qualified leads from LinkedIn.
Ensure your goals are SMART:
- S- Specific
- M- Measurable
- A- Achievable
- R- Relevant
- T- Time-bound
Without clarity, you’re just shooting in the dark and wasting your precious time and budget.
Identify And Track the Right Metric
A hundred thousand likes and followers on your social media page may look good, but they don’t always translate into business value. You must match your goals to the right metrics for the most meaningful ROIs. For instance:
- Brand Awareness Metrics: Reach, Impressions, Follower Growth
- Engagement Metrics: Shares, Comments, Saves, Click-Through Rates (CTR)
- Lead Generation Metrics: Email sign-ups, Form submissions, Download counts
- Sales Metrics: Conversions, Revenue, ROAS (Return on Ad Spend)
Focus on what truly budges the needle for your business. Don’t fall into the trap of vanity metrics.
Utilise UTM Parameters and Google Analytics
UTM or Urchin Tracking Module are tags you can add at the end of a URL that tell you:
- Where is your website traffic coming from?
- Which campaigns are working?
- How are users interacting with your content?
They track these metrics without disrupting the user experience. When you’re running a campaign on multiple platforms, UTM parameters help you:
- Specify which platforms are driving the most traffic.
- Identify your top-performing content or ads.
- Compare campaign results side by side.
You can also use Google Analytics to analyse:
- Where is the website/social media traffic coming from?
- How are those visitors behaving on your site?
- Do they convert to customers, and how much do they spend?
These metrics are essential for tying your social media activity to measurable outcomes.
Go Further Than Just Sales
To understand the long-term impact of your campaigns, you must factor in customer acquisition costs and lifetime value. Measure:
- Customer Acquisition Cost (CAC) refers to the cost of acquiring one customer via social media.
- Customer Lifetime Value (LTV) refers to the amount a customer is expected to spend throughout their relationship with your brand.
If your LTV significantly exceeds your CAC, your social media campaigns are delivering excellent value. Even if the initial ROI looks modest.
Consider Non-financial ROIs
Not every campaign is about immediate conversions. Some are focused on building brand awareness, shaping public perception, or growing your community. These are just as important, but a bit trickier to quantify. To measure them, use tools and metrics like:
- Brand sentiment analysis.
- Share of voice.
- Influencer lift studies.
- Engagement quality.
While these metrics don’t directly feed into sales figures, they contribute meaningfully to the long-term health of your brand.
Test, Test, Test
Social media is a dynamic platform governed by ever-evolving algorithms. The trends, formulas, and practices that flourished one month may severely tank the other. It is, therefore, essential to consistently and constantly test, measure, and refine your social media strategies. Ensure you regularly run A/B tests on the following:
- Creative assets.
- Ad copy.
- Targeting options.
- Posting times.
Track what delivers the best ROI and continuously adjust your strategy to optimise returns.
Social media success isn’t about going viral; it’s about delivering value. We, at Dolphin Branding, understand that measuring the ROI of your social media campaigns doesn’t have to be overwhelming. With a clear strategy, the right tools, and a focus on meaningful metrics, we turn your social media presence into a powerful performance engine.
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