Since many of the tools used in social media marketing are free, the majority of your investment will come from time invested in creating content, syndicating it across the appropriate social media sites and then measuring and optimizing the program. When planning how much time you will invest in your program consider mapping out your investment per activities such as developing goals, listening and engagement, creating and syndicating content and tracking, reporting and team training. Remember that your level of effort and the cost of that time become the denominator in the ROI formula – ROI = Return/Investment.
In order to calculate the ROI of your social media marketing program, you also need to quantify the “return” part of the ROI formula. Again, ROI = Return/Investment. Since most of your social media activity will result in more web traffic, you can easily measure this traffic and the business value of the traffic. Using a tool such as Google Analytics, you can set up a segment report that shows the visits from specific social media sites. You can also see how many people “converted” on one of your landing pages.
You can measure brand impact through the number of positive and negative mentions you get on blogs or sites such as Twitter. Another measure is the number of times your content gets passed along or retweeted. Also, look at the conversion rate of the offers on your website. If more people are buying or requesting information as a percentage of the total visits, you can attribute this uplift to more effective branding.
Once you start tracking your program keep the key performance indicators organized in a marketing dashboard and be sure to track key metrics such as retweets, comments, clicks, followers/fans and conversions.
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