Ali Liaquat — January 20, 2017 Follow @a_liaquatEven though social media spending is projected to account for 16% of the digital ad market by 2017, how many of us really understand what we’re getting out of it? What is the return on investment (ROI) of your social media campaign? And how do you measure the ROI of your social media campaigns? This article will answer all these questions.
Imagine there’s a new cafe called Huzaifa’s Coffee that roasts and sells the finest coffee beans Kenya has to offer.
Huzaifa wants to raise awareness of his cafe, so he holds a social media contest where people guess how many beans are in a 50-pound bag. The person with the best guess wins the bag.
2,000 people submit their guesses via social media and Huzaifa gives away the $ 500 sack of beans. He had fun running the contest, but he’s not sure if it benefited his business. How would Huzaifa figure out if the contest was worth his time and money?
Huzaifa should first consider the time and money he put into the contest. Then he should pay attention to how many people engaged with his business by following his company’s social media accounts. The best leads are likely to be those who live near his cafe, since they’re most likely to become customers.
Social media contests can be a fun and effective way to build brand awareness and attract business, but running them takes time and money.
So, it’s important to determine if your contests are generating a good ROI.
There’s no magic formula for calculating ROI because every business has different goals for their contests. You may want to generate leads, increase social media followers, get people to sign up for a newsletter, or direct people to an online sale.
Once you set your goals, you can keep ROI in mind to help you judge the success of your contests. You can do this by comparing the amount of time and money you put into them versus what you’ve gotten in return.
Over time, you can get more and more ROI out of your contests by honing in on what helps you achieve your goals and avoiding what doesn’t.
Remember: Running contests can be legally complicated, so you may want to consult your lawyer or legal department before you get started. You certainly won’t get any ROI from your contest if it gets shut down.
When you think about the ROI of your social media contests, focus on quality over quantity.
Getting a lot of entries for your contests is exciting, but finding people who are actually interested in your brand is what drives ROI. 5 leads who give you business are more valuable than 100 entries who were only in your contest for the prize.
One good way to increase your chances of generating high-quality leads is to ask for user-generated content. For example, Huzaifa could ask people to upload videos of themselves drinking his coffee in interesting places as part of the contest.
Photos, videos, and other media that people contribute can then be used as future content that can be shared and create even more buzz for your business and your contests.
Tip: To attract quality leads, make sure your prize is relevant to your business. Huzaifa giving away coffee beans will likely attract his target audience of coffee drinkers. It wouldn’t make sense for him to give away something unrelated like a set of steak knives.
A good way to determine if you’re getting quality leads is to track conversions.
Conversions are when people take an action that leads to becoming a customer.
For example, Huzaifa got 2,000 entries in his contest and 500 newsletter subscribers. The subscribers are more likely to become customers than people who only entered the contest but didn’t engage further.
You can monitor which clicks and contestants lead to conversions by using web analytics platforms like Google Analytics, Crazy Egg or LeadzGen to create coded, trackable links. These will show you which posts lead to the most traffic.
While conversions are a good measure of your contest’s ROI, you should also think beyond conversions.
Other important measurements could be: how many people share your contest, how many pieces of user information you gather (names, emails, locations, etc.), or how many new social media followers you attract.
For example, let’s say Huzaifa’s contest goal isn’t just to get a lot of entries and increase brand awareness, but also to substantially increase his social media followers.
To calculate ROI, Huzaifa should divide how much money he spent on his contest (taking into account his time managing it) by how many new followers he received. This will allow him to figure out how much he spent for each new follower.
Imagine that Huzaifa spent $ 600 on his contest and got 200 new followers. That’s $ 3 per new follower. Huzaifa can use this number as a benchmark for future contests and try to achieve a better ROI next time.
Don’t stress if your social media contest’s results are significantly different from your competition. The important thing is to consistently work to improve your social media ROI. The first step to improving your performance is to understand the results of your actions.
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