How to Show Social Media Marketing ROI to your Boss

If you feel like the concept of social media ROI is too big to fit into your brain, you’re not alone.

Which is why we’ve created this short guide to help you with the ins-and-outs of proving social media marketing ROI to your boss! Let’s dive right in.

What Does the ROI of Social Media Look Like?

Simply put, social media marketing ROI is what you get in return for all the time, money, effort, and resources you apply to social. All of which is best calculated with dollar amounts.

Which is where the confusion can arise – there are no price tags hanging from retweets or likes. So, in order to accurately measure ROI of social media you need to keep an eye on two key elements:

  1. Identifying your monetary investment in social.
  2. Assigning a dollar amount to your social media marketing goals.

How to Measure Your Social Media Marketing ROI

(Return – Investment) / Investment = ROI

This simple formula is the basis for measuring your social media marketing ROI. It has only two parts: your investment and your return. Here’s how you determine what each of the values are for your social media marketing efforts.

Calculating Your Return

Step One: Choose a Conversion Goal

When it comes to conversion goals, there are tons to choose from. Some goals may include:

  • New followers.
  • Clicks on link in update.
  • Online orders.
  • Contact information.
  • Newsletter sign-ups.
  • Time spent on an important website.

Step Two: Track Your Goal

Once you’ve chosen a goal (or a few), it’s time to start tracking. You can easily track website activity (sales, downloads, sign-ups, etc.) with Google Analytics by adding goals and event tracking. When it comes to social media interaction tracking, each platform offers their own analytics tools, or you can use one of the plethora of social tracking tools available to marketers.

Step Three: Assign a Dollar Amount

Now, it’s finally time to tackle those dollars-and-cents! There are a few options available here:

  • Lifetime value – How much do you earn on average per customer?
  • Multiplied by conversion rate – How much is each potential visit worth?
  • Average sale – How much is the average purchase made through your site?
  • PPC costs – How much will you end up paying if you were to use paid social media to reach the same goals?

Calculating Your Investment and ROI

It may be true that creating a profile on Facebook or Twitter is free, but the time you spent on it is not. Your social media tools might not be either. And your ad spend is definitely paid in real world money.

  • Time – Multiply your labour-costs per hour by the number of hours that have been committed over a specific time period (are you measuring social media ROI for the week? Month? Per social media campaign?
  • Tools – Add up the total costs of all the tools and services you use for your social media efforts. A little math will help you find your weekly or monthly cost.
  • Ad spend – The total amount you spend on social media advertising. This may include things like promoting tweets, boosting Facebook posts, Facebook ads, etc.

Add these three numbers up, and you’ve got your investment. Now, simply plug all your numbers into that simple equation, and you’ve got yourself a real-world, dollars-and-cents figure to show your boss the actual return on their social media investment!

Looking for someone to help boost your social media strategy and ROI? Give Asset Digital Communications a call to book your free consultation today and let us help enhance your return!