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What is social media ROI?

Do you want to know everything about social media ROI? Want to understand how it works? This article will help you and your business get better.  Your real advantages live here Most entrepreneurs have no idea what money-making marketing is. Even at Harvard Business School, they are taught marketing theory, which has nothing to do […]

  • Rondesignlab Team

Do you want to know everything about social media ROI? Want to understand how it works? This article will help you and your business get better. 

Your real advantages live here

Most entrepreneurs have no idea what money-making marketing is. Even at Harvard Business School, they are taught marketing theory, which has nothing to do with reality. And I don’t even want to say how they teach marketing at our universities. Enough theory that yields no results. In this article, we will look at a real-world example of increasing revenue. these are not empty words. One step is much better than hours of useless conversion. This is the goal of this text and the goal is achieved. Do not believe? Then read on.

What do you choose: experience or luck?

Congratulations! You finally got to this important issue. In this article you will receive the most useful info on this topic. Only useful facts and tips are collected here.

It is important for entrepreneurs to measure the effectiveness and payback of advertising campaigns. One way is to consider the social media ROI. It will be about return on investment. And in this article, you will understand how this indicator can be calculated.

If you are not confident in your abilities, if you do not have free time, then you have the opportunity to order the necessary service from our specialists in order to get the maximum return on Internet marketing investments. Think about it, maybe saving on what you want to earn is not the best idea?

Our experts will advise you right now, answer all your questions and provide complete information. And yet, for a successful result, you will need experience. And our team members have the necessary experience to help you succeed in your business.

It is impossible to be a professional in all areas at once. Trust our experts. Trust those who have devoted more time to this issue. And then you will understand how important it is to trust the work of specialists, and not to hope for chance or luck.

ROI is …

ROI stands for Return on Investment. This is a coefficient showing the profitability or loss-making of a particular investment, in other words, the payback ratio.

Social media ROI must be considered for almost every investment, including advertising. For marketing events, there is another name for ROMI, which stands for Return on Marketing Investment. For example, the payback ratio was 1.5 or 150%. This means that each dollar invested paid for itself and additionally brought $1.5 profit. Most often, social media ROI is measured as a percentage. To calculate it, you need to know the amount of investments and the income received from them. This is all calculated quite simply. But of course, there are also some nuances here, of which it is advisable to know in advance so as not to blunder. In this article you will learn about them. But also, you can send us an email and get advice from an experienced specialist at a convenient time for you.

How to calculate ROI correctly?

For the correct calculation of the payback ratio, you must use the following formula:

ROI = (revenue – costs) / costs × 100%

This is your powerful tool. Sometime it even more useful than your analytics. The result of ROI sometimes more valuable than a report. It should become your new strategy. This indicator can be considered both for the entire event as a whole, and for its individual periods. Choose a period that is convenient for you and is calculated. It doesn’t matter how you do it. It depends on how you keep your records. This simple formula will change your perceive business or brand. Try counting now. Happened? Does your business pay off, or did it just seem to you? We hope this formula will bring you only positive emotions.

For example, your monthly Google ad budget was $500. For the same month, customers who made purchases worth $2,000 came to you from it. The calculation of the social media ROI will be as follows.

We need to subtract advertising costs from revenue, and then divide the resulting value by the amount of advertising costs. To translate the final result into percentages, we multiply it by 100%. It looks like:

(2000 – 500) / 500 × 100% = 30%

The payback of this advertising campaign was 30%. That is, every dollar spent at least comes back to you. Knowing all the necessary input data, you can calculate the social media ROI for a single period, that is, for the month, year, time of the action, and for the whole event. When this indicator is too small, advertising is considered ineffective and, as a rule, it is no longer funded. Think about it, maybe 30% is not such a big indicator!

Often the problem is that when calculating the social media ROI, many different factors are not considered. A good example is car sales. People do not buy cars right away. They take a long time to choose and can go to the site today, and make a purchase in a month. When calculating the social media ROI, it is impossible to consider such events. In addition, a single sale of one expensive car can turn all the calculations. And it is important to constantly remember such trifles. Of course, understanding such details comes with experience. Therefore, we once again recommend that you contact our specialists, which will save you from committing acts that will lead to errors.

Another good example is street advertising, that is, billboards, posters, banners, etc. It is not possible to find out which particular customer came from seeing this advertisement. Of course, you can conduct a survey, but will it show 80% or 10%? That we will never know. The mere fact that billboards continue to appear suggests that they are probably effective, but that’s for sure.

Also, the payback ratio does not show the overall usefulness of the ongoing marketing activities, how much the relationship with the consumer has improved after the campaign. In this regard, social media ROI is most often used to calculate individual, often one-time investments. Moreover, the result itself shows only financial usefulness. Want to know more about this? Then write to us and we will call you back!

When is ROI effective and when not?

Despite different opinions regarding this indicator, there are areas in which social media ROI is uniquely effective:

  • in direct sales;
  • loyalty programs;
  • sales promotion;
  • work with customer complaints, etc.

These are the main ways where you can safely apply this formula and expect it to work from it. For more accurate information, contact a specialist, because this may depend on completely different factors. Each business is unique, and therefore it is impossible to say exactly what needs to be done in your case without knowing the nuances. Tell our specialists about your business and we will help you work on the effectiveness of your business. More often than not, your business can generate more income than it brings. All you need is a specialist opinion, which will give some advice. The sooner you do this, the better for your own company.

How to increase ROI?

Increase the return on online advertising as possible, following a few simple rules. These rules work just fine. Try to remember them and try to apply them in your business, at least as an experiment. Often business experiments lead to unexpectedly positive results.

First, use different channels to advertise and track their performance. Of course, you need to track this, otherwise you will not control the process. When you do not control the process, everything can suddenly go wrong, and it will take you a lot of time not only to understand how to solve the problem, you will still have to look for what this problem consists of. No need to take that risk.

Secondly, it’s important to remember that the landing page or website that the user lands on must correspond to the ad on which the transition was made. Hope, you have chosen the right platform. This is extremely important, otherwise you simply will not achieve the desired result. Imagine yourself as a user. If you follow the link and get to some obscure site with completely different content, what will you do? You will definitely feel like a fool and leave the site, right? It is unlikely that you will be happy with the unpredictable content and start buying everything in a row. No, that doesn’t work like that. What is written in the advertisement must also be on the site. Make sure that in your case it works that way, and nothing else. Only then can you count on success.

Thirdly, make a competent advertisement that is most relevant to the user’s request. The better you compose your ad text, the more likely you are to get a good result. Do not spare time for this. Be responsible for composing your ad text. Consult or order this service from an experienced copywriter who knows what to do in such cases.

As you can see, the success of this campaign really consists of many small things. It is impossible to consider all the little things without proper experience, and experience is created from mistakes. If you do not want to make a mistake, then order a consultation at our agency. We know how to achieve the desired result and can even guarantee it. Email us right now. Things like raising income should not be postponed until later.

Remember, the payback ratio allows not only to receive information on past events, but also to build further strategies, predict the income of future campaigns, etc. This is not only financially beneficial, but also useful for your business. This will help you discover the weaknesses of your business and change them. Do not mask weaknesses, but turn them into virtues. We will help you do this.

Increasing audience reach is the key

If you are advertising only on one site, then why not try to make an advertisement somewhere else, for example, on social networks? If your goal is to increase profits, then start the path to this goal by increasing your audience.

So, you will attract more customers, see how this or that source of advertising will work and which will be more effective.

Being advertised at different sites, you will increase not only the number of potential customers, but also the cost of advertising, this must be considered! As well as demand, which will grow. You need to be prepared to sell at times more.

But first of all, ask yourself an extremely important question. This question sounds like this. Do you know who your potential client is? If the answer is yes, then try to describe it. What gender is he? What age Do you know his location and profession? What is his average salary? All this is extremely important data that will help you better interact with your audience. But what do we mean by interaction?

By mutual interest, we mean increased profits through communication with potential customers. The more distinctly you imagine your target audience, the more accurate approach you will find to it. The customer’s interest in your company and your product or service depends on the approach. Amazing right?

Get started now. Make an accurate portrait of your potential customer. Made up? Now look and think, would this person like your advertisement? Maybe you should change the colors or the tagline? Perhaps your potential client finds your product too cheap and is ill that it is of poor quality? Or maybe the price is too high for your potential customer?

Know, the best product is a product created with user care in mind.

Bottom line

Now you know that social media ROI is an extremely important part of your business. After all, it is social media ROI that helps to understand how effective advertising is. Social media ROI also helps to understand how to increase efficiency. The benefits of social media ROI do not end there. Also, social media ROI helps you find a new tactic, increase other metrics and even some organization skills. It will also becomes an excellent measure that shows whether you are moving in the right direction. Use this wonderful formula and it will lead you to success.

Use new approaches in order to achieve new goals. Evolve to remain a leader. Your success is up to you. Everything else is just an obstacle through which you are able to jump. Use new opportunities wisely and then the whole world will hear about your business. Never stop there. You can do more than you think. Increase revenue. Increase your audience. Determine who your potential customer is and get in touch with him. Everything is in your hands and nothing more.

Of course, social media ROI is more than just a formula. This is the path that will lead you to success.


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