How to: Measure Your Social Media ROI

Social media is becoming more and more relevant in the marketing industry.

Besides big brands like Dell, Whole Foods, Pringles and Zappos, many small businesses are pouring time and money into this new media.

However, the big brothers didn’t just throw their money in without sophisticated matrices to measure their ROI. But how about us, the small beings? In this article you will find some ways to go about measuring your ROI.

–

Define Your Business Goals

To successfully anchor your ship to the correct shore, you have to be clear about your business goals right from the start. There are independent measurement methods catered to different business goals, such as those below:

1. Web Traffic & Sales

Google Web Analytics is really useful when it comes to measuring traffic and sales. It also provides you with valuable insights on your traffic sources. The data collected in the table below is gathered from Google Analytics, telling you clearly how many visits to your website did each source bring you.

Say if you invested $3,000 on social media marketing per month and assuming your sales conversion rate is 0.5% and your average unit profit is $50, your ROI calculation would look like this:

• Cost Per Click (CPC): 3,000 ÷ (82,284 + 52,465) = $0.022 (Probably cheaper than an Adwords Campaign)

• Converted Clicks: (82,284 + 52,465) x 0.5% = 673

• Total Sales: 673 x 50 =$33,650