Social Media Marketing


ROI for Social Media Marketing

Social media marketing has become one of the most effective tools in online marketing for creating brand awareness for any business. It helps in building relationship with the existing customers as well as the potential customers. However, for any business it is important to know the profitability of social media marketing.

Therefore, there are two important aspects which should be determined for social media marketing:

  1. The ROI for the business
  2. How to measure this ROI
  3. ROI- Return on Investment is how much money any business is making with respect to the cost involved in the social media marketing expense.
  4. Measuring ROI- Measuring this ROI is equally important to know about the net expense done on Social Media Marketing and the net profit achieved with it.

How to do that-

There are various methods through which the ROI can be calculated for any business.

  • Determine the SMS (Social Media Spend) i.e. money plus time invested for Social Media Marketing. It is important to calculate the total expenditure first in terms of the money and time involved in doing social media marketing.
  • Determine the CLV (Customer Lifetime Value) for the business- it is one of the most important factors to know about any business, which determines the net profit from the entire future relationship with the customer. The CLV for any business surely increases if the business is successful in getting its information shared by the consumers on their communities. This increases the customer retention more effectively than customer acquisition.
  • Track conversions and sales using Google analytics or any other tracking software. These tools help in finding out the entire journey of the consumer till conversion. Hence, these tools give a clear picture about how many times a person has interacted with the brand before making a purchase.
  • Determine the IP (Impression Value)- Add up impressions from all the social media, divide the total by 100 and multiply it by CPM (Cost per thousand impressions).
  • Reduced Customer Service Value- Social media is the most cost effective medium for building relationship and providing customer service to them. It decreases the cost of customer service as well, since there is no calling cost involved in it. This surely is connected to the ROI.



Social Media Marketing Expert

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