Social media has become a very important part of every companyâs marketing campaign. Obviously, you need to make a certain investment to ensure that your social media marketing campaign is effective and profitable. The basic rule of business is that if you make an investment, you should be able generate returns from it. This is called ROI or return on investment. The general consensus is that ROI calculation is very complicated, as there are many factors to be considered in the equation. However, that is not true. Here are a few tips that can help you in simplifying ROI calculation on social media.
Dissect Your Campaign into Manageable Parts
If you look at your social media marketing campaign closely, you can notice different ways in which you can categorize your activities. Using this method, you can dissect your campaign into small, manageable parts. By doing this, you ensure that you calculate the ROI on a small scale and add everything up to get the bigger picture. This is a very simple approach and a less time consuming one as well. The probability of you missing a factor or going wrong in calculations with this approach is very less.
Calculate the Quantifiable Returns First
When you invest on advertising using social media platforms, you can classify the returns that you get into two parts: quantifiable and non-quantifiable. Take the example of a sale that you are promoting using Facebook, Twitter and Pinterest. You are investing certain amount of time, resources and manpower on this. You have a fixed sum for the total investment that you made to ensure that the news of the sale reaches as many people as possible. After the sale is over, you have a fixed figure on the money you managed to generate. Using this, you can calculate the quantifiable returns.
Estimate the Non-Quantifiable Returns
On the other hand, take the example of a contest that you conduct on Facebook. This is something that will not generate instant profits. But it will give you a fan following, which is much more valuable than the instant profits you make through sale. At the same time, it is very difficult to arrive at the exact ROI in this type of investment. As a result, you have no other option but to make an estimate.
Never Club Social Media Campaigns with Other Marketing Platforms
Another mistake that marketers commonly make is to consider social media campaigns as a smaller part of the bigger marketing campaign. This is wrong and will definitely mess up ROI calculations. Keep each marketing vector separate while calculating the ROI. Since social media in itself has a number of platforms like Facebook, Twitter, Google+, Pinterest, Instagram, etc. to be considered, you will have a number of factors to deal with as it is.
The bottom line in calculating the ROI on social media marketing is that each team would have developed a method that they are comfortable with. It is important that you stick with that method while you use the small tips, like the ones mentioned above, to simplify calculations. Radical changes will only further complicate things and make your job even more difficult.