Campaigns and Measuring ROI
ROI = (return – investment) / investment
The key elements to tracking ROI are:
- Identifying your monetary investment in social media.
- Attaching a dollar amount to your social media goals.
Step One: Choose a Goal
What is your overarching goal? How can you specify the right actions to meet this goal?
- New followers
- Clicks on links in update
- Online purchases
- Fill out contact form
- Signup for newsletter
- Download a PDF
- Time spent on website
Step Two: Track Your Goal
Choose one or more of the above conversion goals and start tracking. You can track website actions (sales, downloads, signups) in Google Analytics by setting up goals and event tracking. You can track social media interactions (shares, likes, follows) through SocialReport (or Buffer, Hootsuite, etc.)
Step Three: Assign a Monetary Value
Once you’ve chosen a goal and tracked the actions, its time to tackle the dollars-and-cents side to ROI. There are several different methods to choose from:
- Lifetime Value – How much do you earn on average from a customer? (There’s a quick calculator here, and a helpful article here.)
- Lifetime value, multiplied by conversion rate – How much is each potential visit worth to you?
- Average sale – How much is the average purchase through your site?
- PPC costs – How much would you end up paying if you were to use ads to achieve the same social media actions?
If it costs $0.50 to gain a single new fan to your Facebook page, then your organic gain of 50 fans is potentially worth $25.
Through experimentation and research with the Buffer accounts we found some benchmarks that might be helpful for comparison. (You can run a 5-day campaign with social ads to get a baseline specific to you.)
- Facebook like average – $0.50 per page like
- Facebook reach average – $0.59 per thousand impressions
- Facebook click average – $0.50 per click
- Promoted tweet – $3.50 per thousand impressions
- LinkedIn – $2.00 per click
How to Calculate Your Investment
While it’s true that participation on Twitter, Facebook, and the like is free, your time is not. Your social media tools may not be. And your ad spend is worth real dollars.
- Your time – Multiply labor-cost per hour by the number of hours you’ve committed over a given period (depending on whether you’re measuring social media ROI for the week, the month, per campaign, etc.).
- Your social media tools – Add up the costs of all the tools and services you use for social media. Find the weekly or monthly costs using a bit of math (divide annual fees by 52 for the weekly cost, by 12 for the monthly cost).
- Advertising spend – The amount you spend on social media advertising—boosting Facebook posts, promoting tweets, etc.
All these costs added together will equal your investment.