Companies have been able to get a great return on investment (ROI) from their marketing campaigns since the rise of social media in popular culture, with sites like LinkedIn.
Nevertheless, 34 percent of marketers admit they don’t know how to measure the success of their social media marketing efforts. The topic of “what is marketing ROI?” arises frequently.
What is social media marketing?
In order to advertise a good or service, businesses might turn to social media marketing. While e-marketing and digital marketing are still more common in academic circles, social media marketing is quickly gaining traction among industry professionals and students alike.
Explain the concept of return on investment (ROI) in relation to social media marketing.
A marketing campaign’s ROI is calculated by dividing the amount of money gained from the campaign by the total amount of money spent on the campaign. The percentage is the standard way of expressing something.
Establishing your social media marketing’s end goal is an important first step in calculating your campaign’s return on investment.
Your Key-Performance Indicators (KPIs) for brand awareness should be the number of likes, shares, and impressions your content receives, while your KPI for sales should be the number of social media leads that are converted into actual sales.
In addition, your social media marketing effort will be more successful if you have clear, measurable objectives. These objectives should be measurable, and their application should be predicated on such acts. Here are few instances that illustrate this point.
- Sign-ups for the campaign’s email list in total.
- The total number of campaign-related online form submissions.
- Free trial signups made during the campaign as a whole.
- The sum of money spent by customers during the promotion.
- Your white paper or ebook’s download count.
- Because of the measurable nature of these objectives, you can readily assess the success of your social media marketing campaign by monitoring their growth or decline over time.
Marketing Return on Investment: The Pros and Cons
In addition to the previously mentioned data point, 60% of marketers have claimed that assessing ROI was the largest obstacle facing their social media programmes.
A Forbes survey shows that salespeople who use social media outperform their rivals in terms of revenue by a significant margin (78 percent).
Why Most Marketers Blow Their Return on Investment?
Despite the fact that 63% of marketers say they often discuss ROI with business leaders, there is a serious issue with assessing the return on investment (ROI) of marketing efforts.
The failure of marketers to consult with their superiors on ROI measurement is a major source of problems, as the objectives for ROI and the appropriate measurements should be discussed in tandem with upper management. Marketers should explain to upper management what metrics are available and how they should be used.
Another issue with marketers and their return on investment on social media is how their brand is perceived by its target audience. When consumers experience bad online customer service (56%), irrelevant material (51%), or excessive advertising (43%), they are more likely to stop engaging with the brand altogether. Treating clients well, creating useful content that isn’t clickbait, and not going overboard on advertisements are all crucial.
Correctly Measuring Marketing Return on Investment
Assigning monetary values to key performance indicators is one approach to calculating Marketing return on investment accurately.
How much do your customers, on average, make you over the course of their lifetime?
How much is each social media visit worth to you in terms of lifetime value and conversion rate? If the lifetime value is $200 and the conversion rate is 10%, then each visit is worth $20.
How much, on average, do customers spend when shopping on your site?
How much would you have to spend on paid social media advertising to achieve the same outcomes as PPC?
Finding your conversion rate for the leads generated is essential if you are spending money on social media advertising. Then, calculate the average lifetime value of a customer to your business.
The return on investment (ROI) per sale would naturally be greater if advertising costs were zero. Whether or not your in-house marketing team can reliably develop material that can connect with your audience will determine whether or not you invest in a paid social media strategy.
With pay-per-click advertising, your content will be promoted more aggressively to the target demographic. To maximise your return on investment, it’s a good idea to talk about your strategy with the marketing department.
A marketer can use a variety of technologies to establish and track digital marketing key performance indicators (KPIs). The return on investment of your social media marketing efforts can then be calculated.