Social Media Return On Investment And How To Measure It
Marketing is a massive job for any business, but it can be a monumental task for most small business owners. In addition to everything you must do to run your business, you must also develop and execute a marketing strategy. Sure, people say you can post on social media, and that’s easy, but how do you know it’s working? How do you know it is worth the time and money you spend doing it? This is what’s known as return on investment, or ROI. ROI is a vital consideration in all aspects of your business. But how do you measure ROI, especially on social media marketing? Read on to learn more.
What Is The Investment?
The investment in any ROI scenario is what you’re putting into the process. In most cases, this is money, but with social media, you also have to consider the investment of time. There are many opportunities to spend actual money marketing on social media, including targeted social media ads, but there are just as many opportunities to market for free. Just remember that responding to the questions and comments on your business Facebook page may seem accessible, but it is taking your time away from something else, so it isn’t. When calculating the return on investment of Social Media activity, don’t forget to include the cost of the time you spend doing it.
What Is The Return?
The return is what you reap from the social media marketing that you’ve done. More often than not, this is looked at in dollars as well, since you should have access to metrics telling you which ads had clicks that lead to sales online or something of that nature. The return does not have to be expressed in terms of revenue if you are more interested in another factor, such as new website visitors, new newsletter sign0ups, or something else. In the end, the return needs to be something measurable, but it should be whatever is the most crucial factor for your industry and business.
What Constitutes A Positive ROI in Social Media?
A positive ROI is when you get more return than you invested. ROI is usually expressed in dollars because it is a ratio that compares what goes into what comes out and works best when it is in the same units. A $20 investment that nets you a $100 sale is said to have an ROI of 400% (return-investment/investment*100) because you’re comparing dollars to dollars. You can compare other factors but not create a percentage similarly.
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