How does a marketer know if a campaign is working or not? By tracking ROI. That’s why calculating the return on investment is crucial. It lets you know how much you are getting out of the time and resources invested.
The formula for ROI is simple: (revenue growth – investment)/ invest *100.
But when it comes to social media marketing, like an influencer campaign, the lines get blurry. Brands struggle to quantify ROI because the impact of the campaign is not always in hard sales or profit.
With that in mind, we help you understand social media ROI and which platform is best for what kind of ROI.
What counts as social media ROI?
Most brands assume that a call-to-action is a return on investment. That is, if an influencer brings in sales, then the campaign was successful.
That is not true. Most social media ROI are intangible and can happen in layers:
- A post could stop a viewer while scrolling and watch your ad or video for 5 seconds.
- A Story registers the name of your brand in a viewer.
- A consumer remembers that your brand is good for the ‘X’ thing.
- A viewer remembers that your brand is offering a discount, offer, or even better product.
- A user searches your brand online after stumbling upon it on social media.
- A viewer clicks on the link attached to the social media post.
- And, of course, a user buys your product or service.
Simple said, there are too many ways social media marketing can give you a return. When broadly categorized, they fall into:
Your return will be based on your objective – what goal do you hope to achieve with the social media campaign?
Which platform suits which social media ROI?
It’s a cycle. The ROI depends on your goal, and that depends on the social media platform. For instance, if the ROI you hope for is increased invisibility, then your goal should be generating brand awareness, which means Facebook is the best choice.
In short, not every platform will give you the same results. Your goal has to align with social media if you want a great ROI.
For brand awareness, pick Facebook.
We know Instagram is the hot platform. But when it comes to reach, there is no better social network than Facebook. Reach here means more people seeing your campaign.
So, when you’re a new brand or launching a new product, it should be your choice for a campaign.
Facebook still has the largest number of users (2.74 billion). With one post, you’ll reach more people than anywhere else. Moreover, the chances of your target audience being active on it are far more likely.
There is an exception to this rule. If your target audience is young, below 24, another network would be a better choice.
For brand engagement, choose Instagram.
If the ROI you want is more people interacting with your brand, then leverage Instagram. Because Instagram is predominantly visual with snackable content, it doesn’t require concentration.
And that makes it more engaging – 10x higher than Facebook, 54x higher than Pinterest, and 84x higher than Twitter.
So, even though it has a lesser number of active users, the mentions, comments, likes, saves, followers, tags and shares your brand will get is higher. It makes the brand more discoverable.
For customer service, select Twitter.
Good customer service will get you on top of the consumer Everest. So, while rarely do brands consider it as an ROI for social media marketing, they should.
When you want to talk to existing customers and make them happier, Twitter is the water cooler of choice. It is the fastest of all social networks. Plus, because it is essentially all-public, the chosen place for people to drop in customer requests.
Summing up social media ROI
To sum up, the impact of social media marketing is not necessarily in sales. It is often in helping users move down the purchase funnel.
Pick which part of the funnel you want to focus on. Then create a campaign towards that goal. Use the right social network, and the outcome will be through the roof.
When you do sit down to crunch the numbers on ROI, don’t forget to consider other costs. Posting on socials may be free, but it does require resources like a tool (buffer, later, HubSpot) and humans (staff, creators and more). These costs and impact your ROI.