Social media campaigns drive brand engagement, spur customers to take action, and even improve product sampling. This is why most brands run periodic contests on multiple platforms. However, while using these platforms as a marketing tool has become quite commonplace, very few marketers and business owners know how to identify and measure their ROIs. Though you may think that a high volume of likes and comments may be murky territory while assigning dollar values to each activity, the reality is that measuring your ROI on these campaigns is quite simple.
Identify your Key Performance Metrics
Is your goal to increase revenue or spread brand awareness? The two present vastly distinct pictures of success, which is why it’s best to identify your goals before putting on your creative cap to come up with a campaign. If your goal is to increase profits and drive more sales, then you must assign dollar values to every conversion you gain from your campaign to ascertain whether it’s a success. If your goal is to boost brand awareness, then assigning a value to the number of eyeballs on your campaign (by measuring shares and exposure) can help you determine your ROI.
Make sure your campaigns align with business objectives
Every campaign drives an action, and if it fails to do so, then one may say that the campaign was ineffective. In order to clearly measure your social media contest ROIs, you must identify the action that you want the campaign to drive (and the business objective you’re aligning it with). For instance, if your business objective is to map your revenue to your social media activity, then your campaigns must drive results like sign-ups for product subscriptions, free trials, or purchases. The sales you generate from such campaigns can help you determine whether you’re getting your money’s worth!
Assign monetary values to your KPIs
Apart from measuring the results driven by each social media campaign, you must also measure what these results are worth to gain an accurate picture of your ROIs. For instance, if your KPI is to drive people to download your app to make a purchase, you must measure the lifetime value of a customer and the cost of a campaign to understand whether you’re paying too much or too little. Let’s say Brand A calculates its customer lifetime value to be $70, and also knows that close to 40% of customers using its app tend to make purchases. Based on this, Brand A determines that each app download is worth $28 to it, which helps the brand measure the overall ROI of a campaign designed to boost downloads.
Measuring the ROI of your social media campaign won’t just tell you whether the money you’re spending on the communication is worth it, but also whether the campaigns are resonating with your audience in the right way.