Measure Small Business Ad Spend on Social Media
Small business owners work hard for their money - over 70% of small businesses are owner-operated which means the owner is on-site, everyday!
When you spend a dollar, you want to know that dollar is working hard for you.
Business schools teach a simple calculation called Return on Investment (ROI) to help small business owners keep their money working hard for them!
This post from Boast.io distills the ROI from social media ad spend very nicely:
You can measure the ROI of online reputation management through social media using improvements to your traffic and social score.
For example, if your engagement grew 100%, traffic from social media increased 50% and your average conversion rate is 5%, total sales increased by 2.5%.
This also indicates that an 100% increase in engagement means a 2.5% in sales.
To measure your ROI, divide this increase in sales by the total amount spent for online reputation management.
To understand your numbers from Followers, Engagement, Sentiment and Tra][ffic, we’ll need to use the definitions provided by Boast.io:
Followers: Whether you’re looking at Facebook, Twitter, Instagram or another platform, followers are a fairly good indicator of customer approval on social media. According to Sprout Social, your followers are about 57% more likely to be customers. Keep in mind that bots and other businesses will skew your organic follower numbers somewhat.
Engagement: Likes, retweets, reposts, mentions, comments and other types of engagement are also a measure of social media approval. This, like followers, is a fairly easy number to gauge, and requires only basic social media monitoring services. However, remember that not all engagement is positive.
Sentiment: This may be the most difficult social media KPI to measure, but it’s also the most accurate assessment of online reputation management on social media. If your total mentions and engagement is relatively low, you can skim through your mentions to get an average, or set up keyword filters including your brand name and positive or negative words. Social media management programs like Hootsuite or Sprout Social also have special algorithms to measure the public’s view of your company on social media.
Traffic: The total website or store traffic you get from social media isn’t a direct link to your social reputation. However, it is an important metric for measuring ROI. This means you’ll want to measure traffic from social alongside one or more of the previous three reputation indicators. You might use tracking codes, link click-through rates, or Google Analytics to measure your traffic from social media.
Hard-working business owners need to make sure every dollar counts. You don’t to be a expert on the above terms - most social pages have analytics that simply tell you how many Followers, how much Engagement, Sentiment and Traffic you have.
Social Media Analytics Are Not Enough
For Facebook, simply go to https://www.facebook.com/analytics while logged into your Business Page (not Personal Page - although in many small businesses, these are one and the same).
Google Anlaytics is very powerful but may require aeparate setup and monitoring - easier said than done for the busy small business owner!
Track Leads at Your Point of Sale
This may be your checkout counter, office or clinic - whereever your customers enter and exit your local storefront.
Track periodic changes in new leads on a separate spreadsheet. Consider a Weekly or a Monthly tracking spreadsheet. Use this Small Business Owners’ New Lead spreadsheet to help you start tracking.
Then, when you spend money on social media advertising in a period, say, October 2018, your spreadsheet should record an increase in new leads for that same month.
Return on Investment (ROI) is simply the return in dollars for that period, subract the return in dollars for the previous period and divide by the return in dollars for the previous period.
Let’s say your small business spent $1,000 in social media ad spend in October 2018 for a return of $25,000 in total monthly sales. If your September sales were $20,000 then, all things being equal, your ROI on social media spend was $5,000/$1,000 = 5 times.
Five times is often expressed as 500%.