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ROI of social channels, what it is and how to calculate it

When you start social media marketing activities, you invest significant resources, both in terms of time and money. To publish content on the various platforms and manage communities and interactions with your audience, it is necessary to integrate specific professional figures into the team, to spread messages it may be necessary to launch advertising campaigns and much more. It is therefore always appropriate monitor the ROI of social channels, i.e. the return on investmentto correctly evaluate whether your initiatives are leading to the desired success or whether you need to review and modify your strategies.

ROI is one of the most important indicators: not only allows you to have feedback on your activity and performance but also allows you to make informed decisions, driven by data, in the medium and long term. Let’s find out what it is and how to calculate it.

  • 1. ROI of social channels, what it is and what is the formula to calculate it

    ROI is the acronym for Return Of Investmentreturn on investment, and it is a profitability indicator which precisely measures how much you earn compared to the capital invested initially. In the sum of the assets used for social media marketing activities, factors such as the budget invested in advertising campaigns on social platforms, i professionals’ feesany consultancy, the subscribing to subscriptions to use content creation tools, taxes, legal fees and everything that represents a cost to be borne.

    The formula to calculate ROI is as follows: (total profit/cost) 100. Profit refers to all the proceeds deriving from one’s activity on social media, while total cost refers to the invested assets. If you obtain a result of 100% it means that all expenses incurred have been covered. If it is less than 100% you are making a loss and if it is greater than 100% you are making a profit.

    As you can imagine, Precisely establishing the earnings from social activity is not easysince it is not always evaluated exclusively in economic terms, but changes based on the objectives we set ourselves.

  • 2. Define objectives to measure the ROI of social channels

    Defining the objectives to be achieved is the first step to take to be able to correctly measure ROI. These must be SMART: specific, measurable, achievable, relevant to the business and time-based, with set deadlines.

    The objectives that can be achieved through social media marketing can be different and each has different measurement indicators. You may want to increase your web presence, increase website traffic, generate leads with potential customers, build customer loyalty, increase sales, increase application downloads, increase engagement, strengthen customer support, improve your online reputation or much more.

    And must quantify the objective, that is, indicate with extreme precision the result you want to obtain and by which date. For example, you might determine that you want to increase visits to your website by 10% within the first three months of the year.

  • 3. Metrics for the ROI of social channels, which ones to use

    For every goal you want to achieve, there are several KPIs (key performance indicator), performance indicators that are able to provide, in a more or less clear manner, information on the progress of one’s activities.

    Among the most important metrics in the social field is the Reach, which indicates the number of unique users who were reached with a certain content published on the platforms. It can be particularly useful to know this data when, for example, you want to increase your presence on social platforms and brand awareness.

    Another important fact on social media is the Impression, the total number of times the content was viewed by the same user. The traffic indicates the number of visits to the site received from a social media, l’engagement user involvement and interactions.

    Lead indicates the number of contacts obtained from potential customers through a specific activity and the CTR (click through rate) the click-through rate on a piece of content. The quantity can then be measured downloadsubscriptions to a newsletter or a service, the number of sales and many other actions performed by users.

  • 4. Tools and platforms for calculating the ROI of social channels

    Monitoring the indicators and your own performance is necessary. The web offers numerous tools which allow you to analyze important metrics, some made available directly by social platforms and others easily available online.

    Google Analytics is particularly appreciated by many professionals, as it allows you to understand your audience better and obtain a higher ROI. Another good management platform for social networks is Hubspot, which provides tools for monitoring KPIs. Many of the tools available online allow you to generate reports for consultation.

    Through the analysis of the results, you can identify the data to use for calculating the ROI of your social channels and evaluate any improvements in your strategies in social media marketing.

    To know more: What is Social Media Marketing and how does it work


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