When it comes to building effective social media ad campaigns, the biggest question isn\u2019t \u201chow much should I spend?\u201d<\/p>\n
It\u2019s \u201cfor every dollar I spend, how much do I get back?\u201d<\/p>\n
In other words, it\u2019s all about return on investment (ROI) \u2014 how are ad spending and customer conversion linked? Understanding this connection makes it less important how much you spend, and instead lets you focus on the impact of your social ads. In this piece, we\u2019re taking a look at how to measure social media marketing ROI and offering a look at eight tools to help streamline the process.<\/p>\n
<\/a><\/p>\n<\/p>\n ROI is a measure of spend versus value: If I spend \u201cX\u201d amount, how much do I get back? The best-case scenario is an ROI greater than one, where companies get back more than they spent on an investment.<\/p>\n Consider a manufacturing company buying a new piece of production line equipment that costs $10,000 but brings in $20,000 worth of revenue each year. The result is a positive ROI and a worthwhile investment. While measuring social media ROI isn\u2019t quite as straightforward since companies need to account for the reach and impact of specific ad campaigns, the underlying concept is the same: Over time, the goal is to get back more than you spend.<\/p>\n While specific measurement timelines and media metrics will differ, the role of ROI remains the same.<\/p>\n One of the most popular and data-driven ways to measure social media marketing ROI is through paid advertising. The problem arises, though, when there isn’t a sound strategy in place to yield a positive return on investment.<\/p>\n How does this happen? Typically, social media marketers build an AdWords campaign to rank for important search terms. The campaign drives clicks, traffic, and leads, but ultimately the ad spend outweighs the impact of the ads which is bad news for ROI.<\/p>\n These marketers end up learning a really expensive lesson, one that could be easily prevented by following these simple steps:<\/p>\n Ads aren\u2019t right for everyone. Some industries have extremely high competition with astronomical CPCs. Some products have too low of an average sales price for the economics to work.<\/p>\n To determine if ads are worth your time, start by building a budget. This isn\u2019t always an easy task, especially considering the hit many marketing budgets have taken over the past two years. According to Tequia Burt<\/a>, Editor in Chief of the LinkedIn Marketing Solutions Blog, market knowledge is a key component of this process. \u201cAs marketing leaders evaluate their budgets and organize their plans for the year ahead,\u201d she says, \u201ca bit of context and clarity can lend helpful structure.\u201d<\/p>\n Consider that 76% of companies plan to boost spending across areas such as branded influencer content, ads in social media stories and ads in social media feeds. Knowing where and when this spending makes the most sense is critical to drive ROI.<\/p>\n <\/a><\/p>\n Download Free Marketing Budget Templates<\/a><\/p>\n Try not to look at ads as a shortcut. It\u2019s possible to get to a place with ads where they become a recurring source of profit, but typically that\u2019s not how things start.<\/p>\n Don\u2019t be surprised when a week after your campaign launches your ads aren\u2019t generating tons of profit. \u201cAround 80% of businesses online feel that they deliver great assistance via social media, but only 8 percent of their customers agreed,\u201d says John Kopanakis, professor of Business Intelligence at Hellenic Mediterranean University<\/a>. \u201cDespite putting in a lot of effort, many marketers hardly reach their targeted sales. It is because they struggle to measure the impact of their social media efforts on their sales.\u201d<\/p>\n As a result, incremental improvements in clickthrough rates and conversion rates can have a huge impact on profit. Use the ads calculator to explore the impact these changes could have. Watch your ads like a hawk for the first month and you\u2019ll avoid big mistakes.<\/p>\n Ads act like a megaphone to amplify your marketing campaigns and content. The more complete and well-developed your campaigns are, the better your ads will perform.<\/p>\n As noted by Samuel Bu, Marketing Director at FortuneNote Chinese Business Magazine in a recent LinkedIn Pulse post<\/a>, it\u2019s also critical to find the right channel for your business. While he highlights LinkedIn as a great way to generate leads and calls out Facebook\u2019s huge impact on the social market, he also highlights challenges with platforms such as Instagram. Why? Bu says \u201cMost likely, Instagram falls short of producing strong ROI due to its more intangible metrics \u2014 such as brand awareness, reputation, loyalty, and consumer engagement.\u201d<\/p>\n Think about it: Which ads do you think perform better? Those promoting your homepage or those promoting a remarkable piece of content that helps someone?<\/p>\n Bingo. Those promoting awesome content.<\/p>\n Campaigns that use ads should be treated like other campaigns. Establish your goals first, build great content, focus your message and optimize your landing pages, then figure out how ads can help amplify your message. Taking this combined approach and only using ads as a strategic component of your marketing campaigns will pay off.<\/p>\n Assuming you\u2019ve run the numbers and now know what you can expect in terms of profit and ROI, it\u2019s time to launch a campaign. To do this you\u2019ll have to make two budget decisions, regardless of where you are advertising:<\/p>\n Total campaign budget or duration: How much do you plan to spend in total? How long will the ads run for? Be aware that if you don\u2019t set a limit there will be no maximum or end date. There are two ways most marketers use ads, short-term and long-term. Let’s take a look at both …<\/p>\n When marketers use ads for a short-term goal, it\u2019s usually to jump-start a campaign or boost content that needs a bump. These ad spends are generally smaller and shorter, but can be large.<\/p>\n If you have a few hundred dollars to spend, spend it this way. Create a social post that promotes a piece of content and then use your ads to boost the post. Facebook, Twitter, and LinkedIn all have good solutions for this. Make sure you use the social network that gives you the best targeting for your persona and returns the most valuable leads. Measure this by assessing the quality of the leads generated after the campaign.<\/p>\n Ads can be a great solution in a pinch but if you really want to use ads strategically build them into your overall marketing strategy. This means more consistent, quarterly ad spends.<\/p>\n Consider how potential customers make purchase decisions and use ads to influence them. This may mean always relying on search ads or retargeting to make sure prospects find you when they are ready to buy. You\u2019re more likely to accumulate better data taking this approach, which will allow you to get more sophisticated in how you optimize your ad spend.<\/p>\n Given the quickly-changing nature of social media platforms and posts, it\u2019s worth considering social media ROI tools to help stay on top of spend and revenue measurements. Here\u2019s a look at eight great options.<\/p>\n <\/p>\n The HubSpot Advertising ROI Calculator<\/a> makes it easy to narrow down when and where it\u2019s worth spending on social ads.<\/p>\n Start by inputting your projected monthly budget, then your expected cost-per-click (CPC), target conversion rate, average sale price and lead to customer rate to get a general idea of your ROI on advertising spend. Use the calculator regularly to reevaluate your campaigns and make sure they\u2019re delivering on key metrics.<\/p>\n Hootsuite<\/a> also offers a free Social ROI Calculator that lets you input ad spend data to determine potential ROI. While it uses slightly different metrics and has a different setup than the HubSpot version, the general function is the same: Input your data to see where it makes sense to spend on ads and where the return may not justify the investment.<\/p>\n While both offer a solid starting point for ROI, we\u2019re naturally biased toward the HubSpot version.<\/p>\n Next up is Sprout Social<\/a>. Unlike HubSpot and Hootsuite, you\u2019ll need to sign up for a free trial to access Sprout Social\u2019s ROI calculator. After 30 days, it\u2019s $99 per month if you want to keep using the tool.<\/p>\n Depending on your current ad campaign and ROI goals, however, the cost may be worth it. Sprout\u2019s tool offers message-level insights to see which posts are proving their worth along with follower, engagement, and keyword analytics that cover the entire publishing process from draft to queue to posting.<\/p>\n Cyfe<\/a> provides a set of all-in-one business dashboards that provide insights across key social platforms such as Twitter, Facebook, Instagram, and LinkedIn. Easily monitor what ads are being posted, how they\u2019re performing, and how users are interacting with your campaign efforts.<\/p>\n Cyfe comes with a 14-day free trial. After that, it\u2019s $19 per month for two dashboards and one user.<\/p>\n Google Analytics<\/a> is familiar, free, and functional. While it doesn\u2019t have the same laser-focus on social media as some other offerings on our list, it comes with the advantage of access to massive data sets, and also helps inform social advertising SEO, which is critical to any effective campaign.<\/p>\n To see how your social ads are performing at a high level, first log into your Google Analytics dashboard. From there, select Acquisition, then All Traffic, then Channels. This will bring up a list of your traffic sources, including those from social sites, in turn helping you get a general sense of how social ads are working to drive revenue.<\/p>\n <\/a><\/p>\n Download Now<\/a><\/p>\n Buffer<\/a> is an all-in-one social media marketing and ROI tool that\u2019s designed to simplify the process of measuring and managing ads. The tool streamlines the creation of social ad content and lets you measure impact in just a few clicks to see what\u2019s working, what isn\u2019t, and what needs to improve.<\/p>\n If you\u2019re just getting started with social media ads, Buffer has a free plan that lets you manage up to three channels with basic tools. From there, plans start at $5 per month for \u201cEssentials\u201d, $10 per month for \u201cTeam\u201d and $100 per month for \u201cAgency\u201d.<\/p>\n Keyhole<\/a> lets you accomplish two key tasks: Listen to what people are saying about your brand in real-time and monitor the impact of your influencer marketing campaigns.<\/p>\n The first is critical because customer sentiment is a solid bellwether when it comes to ad effectiveness. If the number of people talking about your brand is going up \u2014 and if most of what they have to say is positive, you\u2019re on the right track.<\/p>\n Influencer marketing reports, meanwhile, help keep tabs on influencer partners who exist outside your business ecosystem but offer potential benefits for your brand, as long as they\u2019re posting consistently and in line with your messaging.<\/p>\nHow to Measure Social Media Marketing ROI<\/h2>\n
1. Develop a Budget.<\/h3>\n
Featured Resource: Budget Templates To Manage Your 2022 Spend<\/a><\/h4>\n
2. Continually Evaluate Ad Performance.<\/h3>\n
3. Make Sure You\u2019re Amplifying the Right Message<\/h3>\n
How Much Should You Spend on Ads?<\/h2>\n
\n Daily budget: How much do you want to spend a day? <\/p>\nShort-term ads. Budget = at least a few hundred dollars over a month.<\/h4>\n
Long-term ads. Budget = at least a few thousand dollars over a quarter.<\/h4>\n
1. HubSpot<\/h3>\n
<\/h2>\n
2. Hootsuite<\/h3>\n<\/p>\n
3. Sprout Social<\/h3>\n<\/p>\n
4. Cyfe<\/h3>\n<\/p>\n
5. Google Analytics<\/h3>\n<\/p>\n
Featured Resource: The Ultimate Google Ads PPC Kit<\/a><\/h4>\n
6. Buffer<\/h3>\n<\/p>\n
7. Keyhole<\/h3>\n<\/p>\n
8. Social Mention<\/h3>\n<\/p>\n