Digital marketers, especially digital natives, can usually take to social media strategies like fish to water, identifying tactics for driving engagement, and building a brand’s voice. But for as much as we can feel that our strategies are benefiting our brands, how do we go about demonstrating that with data? How do we calculate social media ROI?
Social Media as a Cornerstone of our Marketing Strategy
Social media has become such an ingrained part of our lives today that the concept of having a social media presence for your brand seems so obvious and maybe even second nature. Whether you’re managing an existing brand or building a new one from scratch, social is essential.
That being said, digital marketers still need to demonstrate the returns on their brand’s investments in order to justify future efforts, just like their more traditional forefathers.
The Challenge with Calculating Social Media ROI
The problem with identifying any social media strategy’s ROI is that more often than not, there isn’t really a direct way to do this. There are several variables at play in any situation, including platform, industry, and product, but social media strategies generally aren’t one-dimensional.
This means it can be difficult to directly tie any single tactic to a dollar amount, such as associating a given set of conversions to a set of Instagram posts.
Identifying our Strategy’s Purpose
Truthfully, social media strategies and campaigns have the capacity to do so much more than attempt to drive conversions. From building brand awareness to improving customer service, these are long-term benefits that aren’t simply valuated.
Therefore, the first step to identifying your social media strategy’s return on investment begins by acknowledging that those returns may look different. The returns could be increased website traffic, increased brand impressions, increased customer satisfaction ratings, and more.
After you’ve acknowledged this, the next step is to ask yourself – What’s the point? This means identifying your objectives.
- Why are you developing a social media strategy?
- What is your desired outcome?
- What does success mean to you?
Similarly to when we discussed identifying KPIs, after beginning with objectives, we continue through the process by identifying goals which feed our objectives and metrics that gauge our progress towards those goals. Lastly, having these objectives, goals, and metrics, we can analyze our data to determine the performance of our strategy.
The Future of Social Media Analysis
Truth be told, this may already be the present at this point. Social media platforms have been gathering mountains of data for years but digital marketers are only now really starting to understand how to manipulate it to find insights. Robust attribution models are the future for determining what the true ROI is on your social media investments.