Influencer Marketing and R.O.I.
Influencer marketing is taking over the marketing world, little by little.
Every day, companies move away from traditional marketing tactics. Instead, they choose more modern marketing tools.
Brands don’t just want to boringly present products and services to their customers. They want to create communities that rely on them for great products, services, and information.
Every time I work with a brand, they want me to create images that convey a message. Mostly, they want me to tell a story that makes sense for the brand message.
Overall, influencer marketing becomes difficult to track results, especially if the campaign goals aren’t clear. One of the most important things for a brand to do is track R.O.I.
If you’re not sure what R.O.I. is, this term might be confusing. Don’t worry, here at Beauty Clout, we value brands and influencers that are working towards a goal.
Let’s get into R.O.I. and it’s importance.
What is social media R.O.I.?
R.O.I. means the return on investment.
Essentially, it means that when your brand invests in something, you should expect a return on that investment. Your social media strategy depends on your organization’s objectives.
Do you want to raise brand awareness? Increase revenue? Build community? Your R.O.I. depends on your overall goals, so it’s important to know that.
Many businesses that don’t depend on social media already have R.O.I. tracking tools. However, when it comes to social media, R.O.I. is the sum of all social media actions that bring value.
After all the time, money, and resources put into a social media campaign—what’s the return of that overall investment. Again, your total R.O.I. depends on what you’re measuring.
If you measured R.O.I. by revenue, your formula would look like this:
Revenue/investment (billable hours, budget) X 100 = social media R.O.I.
So, if you made $3,000 in revenue from social media on a $1000 investment, your profit is $2000. Just insert those values into the formula, and you’ve got your investment.
Not every organization will be able to gain direct revenue from social media. It’s probably smarter that they don’t. Value isn’t always dollars and cents. Sometimes, it’s community growth and website views.
R.O.I. doesn’t have a strict definition, especially in the world of social media. Thinking that R.O.I. should be just money prevents you from seeing other ways an investment is beneficial.
If your goal is to build brand awareness, you would measure success with metrics such as clicks, audience reach, and engagement.
If you’re not sure what to measure, ask yourself what your campaign is about.
Do you want people to buy, or engage?
Why you need to prove R.O.I.
It’s one thing for someone to promise that they can provide results.
It’s another thing to show it. Nothing will convince a brand more than data that shows results. When there are measurable and specific outcomes, people take you seriously.
Measuring social media R.O.I. is essential for many reasons. It can change the perception of social media within your organization, especially if your company is older.
Social media R.O.I. proves the potential impact social media has in the business, not just in marketing. It also helps you better understand your audience.
You get to learn about what they want, need and desire.
How to measure social media R.O.I.
After a campaign is said and done, it’s essential to prove the value of your efforts.
Social media spending has spiked tremendously since 2017. It’s expected to reach the multi-billions in 2019.
Still, only some brands say they can prove its value. This reasoning is why measuring R.O.I. is so significant. You can track R.O.I. by doing it yourself, or by using analytic tools.
Here are some steps you can follow:
Step 1: Have clear objectives
Brand awareness is one of the goals of a social media campaign.
Sometimes, companies think that’s the only thing they need to measure. While it is is valuable, it’s not always enough.
To show and feel value from a social media campaign, you need to set social media objectives that are aligned with your department goals. Your social media objectives could be based on business conversions such as leads.
They could also be based on customer experience, something that many companies forget to track.
Step 2: Set smart goals
The goals you make determine whether social media will help your brand grow.
Once your goals are established, you need to set goals
which represent what you’re going to achieve it.
Here are a few simple examples:
If you need help setting goal, try setting S.M.A.R.T. Goals. With this framework, each goal must be specific, measurable, attainable, relevant, and timely.
For example, rather than just saying what you want to improve on, set a number and a deadline for that goal. So, for example: ‘We will increase our followers by 3% by the end of the year.’
Another example of a conversion goal would be increasing sales by 10%. You would measure this by tracking the number of purchases that stem from your social channels.
Step 3: Track the right performance metrics
You need social media metrics to determine whether you’re meeting your goals.
Things such as likes, comments, and shares have value. It’s essential to use these metrics to gauge the overall health of your social media.
Other parameters you could track are reach, audience engagement, website traffic, and sign-ups and conversions. Make sure that what you’re tracking aligns with your goals!
Step 4: Know how much you’re spending
You need to be clear about the amount of your investment in social media.
You don’t want to spend too much if you hope to determine whether you’re getting a good return.
There are four key things you need to regulate, so you have a high return.
Cost of tools and platforms
Most networks are free to use, so you don’t have to worry about that, but not everything isn’t free.
Also, some items related to social media might cost money, such as editing costs and so on.
If you measure the R.O.I. of a campaign, you’ll need to think about that cost of those tools.
The budget allocated to social ad spends
This is the easiest thing to track since the cost of each ad is usually told to you before the ad goes live.
The cost of the ad also goes live as you move forward with it. If you’re running ads across multiple social media platforms, you can use a tool that will measure everything for you, such as HootSuite Ads.
How much did it cost to produce the creativity of the campaign?
Did you have in-house writers create blog posts around the campaign? How much did the influencer cost, if you used one? How many hours did it take to produce everything?
Make sure you also account for all things that are perceived as billable.
Time spent by employees for social media
How much time does your marketing team spend on social media?
As a business, it’s essential to add it all up. You should calculate how much time your company spends on social media every month or year.
It’s essential that you want to measure it against the goals and metrics you already committed to.
Social Media R.O.I. Tools
Now that you fully understand R.O.I., and why it’s essential, here are some tools you can use to track it.
These tools will help those without the time to track it themselves.
Social R.O.I. calculator
This tool makes it easy for you to calculate the return on your media investment.
All you need to do is input your numbers and see what you come up with!
This is the most popular amongst this list because tit’s reliable and useful.
Google Analytics track website traffic, conversions, and sign-ups from the social media sites that you use, as well as the websites.
Measure the R.O.I. of social media on different social channels.
Hootsuite has gotten bigger and bigger since it starts. Impact connects to your existing analytics systems but integrates everything, so you view all your social data.
It makes producing reports easy. Hootsuite also advises those wanting to improve their social media.
Facebook Pixel is a piece of code you embed into your website. It allows you to track conversions from Facebook ads that lead to sales.
Reporting the R.O.I. of Social Media and Best Practices
Now, it’s time to track and report results. This seems confusing because many people can’t read the information that goes into R.O.I., but it’s relatively easy.
Templates are great for a more organized look.
Creating analytics templates will allow you to track metrics for all campaigns without hassle.
It’s critical to have easy-to-understand reports so that you can share them with those without social media knowledge.
By making it easy, you’ll be able to showcase the value of social media.
Not everyone understands social media jargon and data as well as experts like you.
So, it’s essential to present information in a way that translates to your audience.
Hootsuite is a great source that turns data into understandable information.
Check your metrics daily
If you’re currently running a campaign, it’s essential to check your metrics daily.
Tracking analytics will help you avoid spending any more money on a failing campaign. By checking it daily, you’ll also be able to see what’s working for your audience.
If you need to, you can make adjustments and shift budgets.
Stick to a timeframe
You can have reports sent to your team daily, weekly or monthly.
The important thing is that you sent updates during a specific timeframe, so you don’t have to remember to pull them yourself.
Three Ways to Improve R.O.I.
If you see that your R.O.I. still hasn’t improved, it’s best to optimize your strategy going forward.
Here are some tips for improvement.
1. Test and optimize
Before doing anything, it’s essential to run tests.
Are you running social media ads? What are the results? When running ads, it’s necessary to experiment with different audience choices and ad formats.
Also, make sure you try out different content. Change up the copy or visuals you’re using and see which one works best.
There are countless things you can change to see the results you like.
2. Use data to test market
For example, you may notice that specific images featuring more than one product or a certain influencer produce more conversions.
If you notice this, then try testing that out to see if the audience enjoys that content more than other material.
Testing the market is a great way to see if the data you’re seeing is resonating with your audience.
Social media is always changing, which means it’s hard for companies to keep up.
The content, strategies, and channels that you use to connect with your audience today might not work tomorrow. To meet your goals, you’ll need to be able to adapt, quickly.
Customer needs are always changing, so why shouldn’t your strategies? New platforms and technology are always popping up, which means that audiences are ever evolving.
All these factors will impact whether your R.O.I. is high or low.
R.O.I. and Social Media Fun
Social media is a valuable tool that is always changing its landscape.
R.O.I. is essential no matter the platform, or avenue your business is taking. Measuring social media R.O.I. gives your business valuable insight into the success that social media warrants.
It also provides insight into what might work in the future. But there’s always more to learn, test, and gain. Don’t be afraid to look into all the ways to improve your R.O.I., and take your business to the next level.
Do you have tips for business owners when it comes to social media R.O.I.? Leave suggestions in the comments below! Let’s all win together!