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What is Social Media ROI? With social media getting used as a great device in enterprises to grow, it's been more and more vital to track the effects of your social media efforts. The most pressing question now is how to comprehend the consequences of your social media strategy. Are you on the right track when it comes to your content strategy? To understand this you would want to see what is called as “Return on investment”, or ROI.It is nothing more than the returns a company would expect from the time, resources, and minds invested in the company's entire social media strategy. In terms of math, it boils down to: Revenue-Costs/Costs*100. Now imagine you were running a grocery store and you purchased the groceries for $100 and sold them for $150, then you'd get: 150-100/100*100= 50% by plugging these numbers into the formula. Isn't it easy enough? But, in terms of social media marketing, how do you apply this concept? The return on investment (ROI) on your social media campaign is the amount of money you've made.But not all social media efforts are directly attributable to monetary benefits. As a result, all marketers must be able to extract and apply relevant data, as and when required. Why is it important to measure social media ROI? It's crazy how many marketers have no idea what kind of ROI they're getting from which channel or how their social media practices are impacting their enterprise. Since every step, every effort you put into your business has repercussions, this underestimation of social media can cause havoc for your business. As a result, it's past time for you to start treating your social media sites with the respect they deserve. If you've figured out which social media activities are yielding the best results, you can start planning strategies in that direction. For example, you will discover that posting stories on Instagram or running competitions on Facebook generates more momentum on specific days, resulting in increased monetary benefits to your company; as a result, you'll know what you need to do in the future. That’s the power of studying ROI. How to measure social media ROI? Step-1 Identify your goals: Always determine the goals you want to achieve from your activities before calculating returns or even thinking about analyzing the consequences of your social media efforts. Do you want to increase your following? Do you want more people to sign up for your newsletter? Do you want to increase your sales? Following that, you should consider calculating the ROI. Step-2 Understanding marketing funnel: After you've figured out your marketing objectives, you should move on to understanding your marketing funnel. Understanding how social media metrics connect to the customer journey is a crucial first step. Engagement with the consumer, which translates to reach in social media terms, is the first step in the customer journey, as it is in the early phases. Similarly, while learning about your audience in the middle stage, it translates to CPC, or cost per click , and CTR, or click through rate . Finally, at the last stage, encouraging your audience to purchase equates to conversions like sales, subscriptions, downloads, etc. Step-3: Calculate! Now that you have targeted your KPIs and understood what to calculate, now comes the tricky part, calculating them. In order to determine your ROI, you'll need the correct tools. Many built-in technologies, such as Facebook insights, Instagram insights, and LinkedIn insights, provide granular information on how people interact with your material. With these, you can keep track of all of your engagement. You can observe when your audience is active, where they are from, what demographics they have, so on and so forth. You can check how your audience reacted to your ad using Facebook Ads Manager. Another significant tool is Google Analytics. To find out how much traffic and conversions your social media marketing efforts are producing, add Google Analytics UTM parameters to the URL of your social media ads. Why is measuring social media marketing ROI difficult? Due to a variety of factors, social media managers and executives are finding it increasingly challenging to measure social media marketing ROI. Executives are unsure about what to measure. Many people believe that if their content gets a lot of likes and shares, their strategy is good enough; however, this is not always the case. We need to see if our efforts are yielding any quantitative results. Is your product being purchased? Is the quality of your online orders improving? Is your ebook gaining popularity? Always measure all the relevant KPIs and do analysis accordingly. Wrap up: Social media marketing ROI is a parameter that should never be overlooked, if you are putting in genuine efforts in it, and want good results out of it, keep measuring and keep analyzing!