In part one of our Instagram series, we covered the best strategies for increasing brand awareness on Instagram. Now I’d like to discuss how to prove whether or not your strategy is working by measuring your Instagram ROI.
Related Post: Increasing Your Company’s Brand Awareness on Instagram
First, it’s important to define ROI and what it means in terms of your social media strategy. Return on investment (ROI) is a ratio between net profit and cost of investment. As a performance measure, a high ROI means that the investment’s gain compares favorably to its cost. Therefore, as we talk about evaluating your Instagram ROI, we’re going to measure the return on your objectives against all of the resources you’ve put in.
By developing an Instagram strategy that defines specific objectives and sets SMART goals, you can provide quantifiable data that demonstrates the potential impact that social media can have across the business—not just throughout the marketing department.
Set SMART Goals and Objectives
What do you want your company to achieve and how will social media help get you there? The answers to these questions will define the objectives of your social media strategy. Once you know what you want to achieve, you need to set goals to keep you on track for how and when you’re going to achieve it.
Using the SMART framework will help you through the goal setting process, ensuring that each goal is specific, measurable, attainable, relevant and timely. For example, if your goal is to grow conversions, a SMART goal would be to increase landing page conversions by 10 percent by the end of quarter. This goal is easily measured by tracking the conversion rate of people who land on your page from social channels.
Track Progress Through Metrics that Matter
Social media metrics help you determine whether you’re on track to achieve your objectives and goals. It’s easy to get caught up with vanity metrics such as likes, comments and shares—which don’t get me wrong, have value. They garner insight into your overall social media presence and help you determine the content your audience wants to see.
The metrics you’ll need to track to prove Instagram ROI would include any that align with the business objectives you outlined above. Some examples include:
- Audience engagement
- Site traffic
- Leads generated
- Revenue generated
The metrics you track will be unique to your business goals and objectives and will help you make decisions like what to do more or less of
Evaluate Instagram Spend
To determine Instagram ROI, you’ll need to evaluate all of the resources you’ve utilized to execute your strategy.
- Tools: Do you pay for a social media management platform, like HubSpot?
- Paid Ads: Instagram makes it easy to track ad spend in the ad dashboard.
- Content Creation: How much does it cost to produce your Instagram content? Consider how long it takes the team member to create the content and how much that person makes per hour. Also, how much time was spent in meetings to determine campaigns and themes? These are all resources that contribute to your Instagram spend.
Once you’ve evaluated these factors to determine your spend, you can measure it against the goals and metrics you defined above. So, if you’re using social media to increase landing page conversions—to support the business objective of growing conversions, for example—you can determine the cost of each conversion by using the following formula:
Profit (landing page conversions via Instagram) / Total Investment (tools, paid ads, content creation) x 100 = Instagram ROI Percentage
Track Results to Adjust and Improve
Your Instagram ROI shows you what’s working and what’s not—allowing you to shift resources and tactics to be more effective. For example, you may notice that Instagram posts get more conversions when accompanied by a post to Instagram Stories, when there is an emoji in the caption, or when you tag a location, etc. There are countless ways to tweak your content to see which delivers the best results.
The most important thing to remember is that social media is always changing. Your strategy and content must also be adaptable to remain successful and continue earning a positive return on your Instagram investment.
Having trouble wrapping your head around all of this? Leave a comment below and someone on our team will reach out!