You’re managing the social media networks for your organization and in your opinion, it’s going great. You’re connecting with influencers, gathering fans, and getting lots of messages. Perfect, right? Actually, no.
Social media has become increasingly data-driven which means that social media managers today must prove social ROI (return on investment) to their boss. Businesses use ROI to calculate dollar/cents return on a dollar/cents investment and social media is no different.
Let’s add another layer of complexity. Your boss probably isn’t up to date with the latest social media developments– that’s why I’m going to show you how to prove social ROI to a boss who doesn’t deal with social on a daily basis.
Social ROI- A Story
Many moons ago, prior to starting my social media agency Contentworks, I worked as a social media manager for a large financial institution. I was spending €3,000 Euros per month on content marketing and social media.
One day, my boss (who didn’t get social media) summoned me to his office to prove social ROI. “The shareholders (who also didn’t get social media) have decided that it’s not worth spending money on social media” he declared. “It isn’t producing leads and they would rather redirect the budget to the sales team.”
I nearly spat out my coffee. It was producing leads, click-throughs, sign-ups, and registrations but here’s the thing– I hadn’t done a good job of proving it.
I convinced him to allow me three months to prove social ROI after which I got my budget increased to €5000 per month. Let’s look at how you can prove social ROI to your boss.
1. Set Social Media KPIs With Your Boss
The first thing you need to establish are your social media KPIs. Establishing KPIs is essential for you to understand where to put your budget and how to report on your activities.
Identifying your monetary investment in social media means attaching a dollar amount to your social media goals. Usually, with KPIs, you would measure Reach, Engagement, Conversions or Leads.
However, when it comes to proving ROI, reach and engagement are very tricky areas. Your post got super high engagement on Facebook but what dollar value did that bring to the company? This is how your boss will be thinking so you need to work with that.
Boss Tip. Get your boss involved at a ground roots level when setting your KPIs. Explain how each KPI will benefit the company and ask them to help you decide on the ones to focus on. A boss who is involved in social media decisions is less likely to question them later!
2. Establish CPC to Prove Social ROI
How much is your company spending on CPC (cost per click) via other methods like banner ads? How do your social media costs compare with this? Will your company enjoy better ROI from social media marketing compared to alternatives like pricey television commercials, radio ads, billboards, print advertisements or Google AdWords?
To find out, just log into your ads panel and look at your recent campaigns. You can see below that my latest campaign achieved a CPC of 44 cents on Facebook. That means that I spent 44 cents for every click through to my landing page. All the main social media channels provide this kind of reporting and CPC is a key indicator of performance.
Boss Tip. As a social media manager, you may not be privy to the costs of acquiring a client via other methods. Your boss will be though. Banner ads can be expensive, depending on your industry sector and social media is usually a more cost-effective CPC route. Have a discussion with your boss about this and get your costs in perspective in comparison with…
