Let’s talk about social media ROI. We know, we know, not the easiest of subjects. But of the utmost importance. Listen, you can know all the tricks and gimmicks and implement the most creative campaigns on Instagram. However, if you don’t know how much revenue you’re getting out of them, you’ll never be able to adjust the budgets and work at full efficiency. Not only that, but you won’t be able to prove the necessity of Instagram campaigns in your overall marketing strategy.
But how can you correctly assess your ROI on Instagram? What are the insights and analytics that can get you the best measurements? How to overcome the challenges of measuring the value of your marketing efforts? It’s easy to get overwhelmed by questions, but don’t fall into the trap of stressing out. We’re here to give you a chill-infused article that will turn assessing your ROI from a nightmare to a pleasure. Or at least a bearable nuisance.
Let’s start with the beginning…
What exactly is social media ROI?
Okay, so ROI is an association of letters that is often thrown around on the social media marketing scene. Of course, always accompanied by serious-expressions and worried attitudes. But, beyond the hype, nobody can quite agree on the specifics. Every expert has a different expert opinion on what social media ROI is. And that’s because the return on investment for every campaign depends on the initial objectives.
Of course, it all starts with knowing exactly how much money, time and resources went into the creation of a specific post or campaign. If so far, you haven’t been in the habit of keeping track of your Instagram expenses, then you should start right away and never stop. You cannot even begin to think about a professional marketing strategy without carefully tracking expenses. Next, you’ll have to compare your inputs with the outputs. That means you’ll have to compare the resources you invested with the results for specific posts, ads and stories in terms of engagement, number of followers and conversions to name a few.
In short, social media ROI on Instagram is closely connected to your objectives. To measure it you need to compare the resources you invested with the insights that can measure your objectives, be it engagement, lead generation, conversions or followers.
Reasons to carefully measure ROI on Instagram
If you’re not convinced that ROI on Instagram is a must, think again. Don’t just go with the flow. That might only get you as far as the stream goes. But you want to venture further and discover new grounds for your business. And that means seeing exactly what you’re doing right and specifically what you’re doing wrong so that you can improve your efforts.
Knowing exactly how much ROI an Instagram post or Story brings you will let you in some valuable insights. By assessing that, you’ll be able to do more of what works and less of what doesn’t. And, of course, invest your time, resources and money into what matters.
Just having a social media presence is important in itself. However, since you’re already here (because you must be here), do it right! That’s the kind of person you are, right? Sure, you might say that it’s hard to gather all the data and even harder to analyze it. You might even say that you don’t have the time and resources. You’re right! But these are challenges to overcome and not excuses to live by. So, here’s how to assess your ROI on Instagram.
Steps to measure marketing ROI on Instagram
1. Know your objectives
Assessing your ROI on Instagram depends on your objectives. Without having a clear idea of what you’re trying to achieve, there’s no way to measure your achievement. Makes sense, right?
Actually, it makes a lot of sense since an engagement campaign will use very different tools and tactics than a conversion campaign or a lead generating one. And, since the tools and tactics are different, so will the measurement tools be. Not only that but knowing your objectives is mandatory no matter if you plan to assess your ROI or not. Without a clear direction, you’ll end up spinning in circles, not knowing how or when to act.
What’s more, try to set your objectives in such a manner that they can be calculated. Try to think of your overall actions as directing followers through a funnel, from potential followers to followers, leads and ultimately, customers. That means that, when measuring the results, you’ll have to focus both on data from Instagram and outside the platform, from your website. But more on that, later. For now, draft your objectives as clearly and accurately as possible.
2. Track your social media expenses
There’s no way of knowing your ROI on Instagram if you don’t keep a close eye on what you’ve invested. And that means more than what you’re spending in financial terms.
When calculating your investment in Instagram, you should always also take into account the human-resources and the time they spent on thinking, creating and implementing the campaigns. Think about the specific number of hours and the fee for each professional per hour. Add them up and note them down! Another you must take into account is, of course, the actual cost of promoted content on Instagram or any other payments made to, let’s say, influencers or industry experts that are related to your content. And, last, but definitely not least, if you’re using third-party apps to help you with managing your Instagram account, you should also add this cost as well.
3. Dig into Instagram Insights
Instagram Insights are your first step into the wonderland of ROI on Instagram. Here you’ll find valuable info about how your account and posts are performing. To learn more about how to interpret and make the most out of them, make sure to read our article on the power of Instagram Insights. You’ll find everything you need to know and more!
4. Get your analytics straight
As we’ve already mentioned, you’ll have to measure more than what Instagram offers you and even go outside Instagram to do so. For this, we recommend Ink361 as a way of grasping more powerful analytics about your Instagram. To measure results and conversions outside Instagram, Google almighty is your best friend. From the Google Analytics dashboard, you’ll be able to go straight to your Conversions’ statistics and even set social media goals, from newsletter sign-ups, traffic or leads, you name it!
In order to use the analytics from Google, you’ll have to set the URL destinations corresponding to your campaigns. For example, if we’re talking about a newsletter sign-up, create a separate URL for the final step of the sign-up. Make sure to create a specific funnel for each campaign and introduce the corresponding values to each so that you can calculate the exact return for each conversion.
5. Tie everything together
Now, with all the info in front of you, it’s time to crunch the numbers! Luckily, it sounds harder than it is. To figure out your ROI on Instagram, use the following formula:
[100 x (Earnings – Costs)] : Costs = ROI on Instagram
Where the costs include everything we’ve mentioned at step 2.
That’s it! It wasn’t that hard, was it? But it was totally worth it! Now, get to work and let us know how it goes!