Keys to Understanding and Tracking Social Media ROI


social media ROI

Social media return on investment (ROI) always comes up when talking to prospective clients.   Consequently, questions like what is the real value of a Facebook like, or a retweet always come up.  However, when it comes to ROI, “likes” and “retweets” are difficult to quantify because they don’t readily translate into sales.  Therefore, the best social media metrics must track to direct revenue or a verifiable lead.


ROI is ((TOTAL REVENUE – TOTAL COST) / (TOTAL COST)) x 100.  Clearly, from the ROI formula, we must track revenue generated from a social media campaign.  Fortunately, calculating ROI is easy if we are selling a product.  For example, I spent $1000 on Facebook ads promoting my new widget. As a result, I made $1300 in widget sales. My ROI is ((1300 – 1000)/(1000)) x 100 or 30% return on investment. However, when we are generating Facebook leads, we need to convert those leads into sales.

Define Your Social Media Goals

The best social media goals require a prospect to do something meaningful like sign-up for a newsletter, submit a contact form, download an e-book, or a whitepaper. Consequently, those actions require the prospect to submit an email address to get what they want.  The best practice is to build social media campaigns to track a particular social media goal.  For example, creating a newsletter campaign on Facebook, Twitter, and LinkedIn.  However, these social media goals generate leads.  We will need to covert social media leads into paying customers.

Track and Measure Your Goals

There are many tools available to track social media campaign goals, but nothing is better than Google Analytics; because Google Analytics is FREE.

social media tracking

Figure 1.

Now let’s do some simple math.  Based on figure 1, you spent $250.00 on our Facebook campaign.  We had 600 people click on the ad.  Of those 600 people, 275 people completed the form and saw our thank you page.  First, we calculate the cost per lead (CPL) = $250/275 = .91 cents per lead.  We need to know how many people saw our Facebook ad; this is known as ad impressions.  Our ad delivered 5000  impressions to our target audience.  Now we calculate our click through rate (CTR).  Facebook calculates our CTR. CTR = 600 total clicks/5000 impressions = .12 or 12%  Which is really good.  A CTR above 3% is good.  The final calculation is conversion rate (CR).  CR = 275 completed Optin Forms/600 total ad clicks = .45 or 45%.  Ready to learn more about setting up Google Analytics? 

Getting to ROI

Now that we have some leads, let’s look at the ROI formula again.  ROI = ((TOTAl REVENUE – TOTAL COST) / (TOTAL COST)) x 100.  We’ll start working those leads hard with our email campaign. To make the concept simple, we will just work with our original 275 leads.  Our email campaign is enticing your Facebook leads into paying customers.  I’ll mention there are many metrics to consider when evaluating our email campaign.  Check out HubSpot’s article on email analytics to get more familiar with email campaigns.  For example, our total cost of our email campaign is your Facebook ad spend + our time to create email messages +  the cost of our email platform = $300.00.  Your hard work won 2 paying customers totaling $800.00 in revenue.  Therefore our ROI is (($800.00-$300)/($300)) x 100 =167% for our Facebook campaign.

Interpreting ROI

Interpreting ROI is simple, anything positive is good, meaning we recouped your investment and made a profit.  A negative ROI means your investment lost money.  In our example, our ROI was 167% meaning for every dollar you invested you made a $1.67!  Let’s say, our ROI was 10%, then you made .10 cents for every dollar spent.  Likewise, if our ROI was -25%, then you lost 25 cents for every dollar invested.


Calculating social media ROI is simple when you are selling a product that customers can purchase directly from your e-store.  If your business is a service, then your social media campaign will generate leads which then will be converted into sales.  We are experts at setting up social media campaigns and turning your investment into positive ROI.

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5 Smart Ways to Use Business Videos on your Website

Business video;video;video;seo

Any company can benefit from using a business video on their website or social media.   However, many owners think their business video needs to go viral or be a Hollywood production to be effective. The sad thing is entrepreneurs miss opportunities to engage with their audience by publishing a simple business video. Here are 5 ways to use video in your business.

Create a short value proposition video for your website.

People need to know why they should buy from you.  So tell them with a business video. Your value proposition is a compelling reason why your business is the better than the rest.  In Michael Skok’s article  4 Steps To Building A Compelling Value Proposition Skok provides clear guidance on how to craft a compelling value proposition. The most powerful way to do this is for you to be in front of the camera telling people why they should do business with you.

Use video to train new staff.

Show and tell is the best way to train staff. But, not every topic is suited for a business training video.  The most impactful business training videos are reserved for important, and or complex topics.  Business training videos done properly are extremely effective because employees learn quickly and fewer mistakes are made.  Here is a great article from iSpring, 6 Tips to Create Engaging Training Videos.

Use quick video tutorials to help clients understand complex topics.

Using video to explain complex ideas or processes helps people understand what you do, or how something is done. For example, we helped a personal injury lawyer develop short explainer videos on the filing process of a personal injury claim.  The video was powerful because people knew what to expect, and that made things go smoothly.

Use video to bring testimonials to life.

It’s better to have other people praise you than to praise yourself.  Having written testimonials are good.  But having a sincere video testimonial is powerful.  People are willing to say a few kind words on camera when your product or service is great! So ask your best customers to help you with a simple video testimonial.  The added bonus is that people watching the video testimonial feel like it’s a friend telling them about a good deal, even though it’s a stranger!  WOW!

Use video to make yourself more visible in search engines.

Google loves video because they own YouTube.  That’s why Google’s search algorithm prioritizes video.   Therefore using business videos will improve your SEO rank.  Making a great video is the first step, the second step is to post your video so that it will be easily processed by Google.  Check out this great article to get you started: 12 video SEO tips to help improve your search rankings

Using video is easier than ever, just grab your phone and start recording.


Marketing, Everybody Thinks They Know It , But They Don’t

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Speaking from personal experience, I’m guilty of making all and more of the following mistakes.  I also believe the bumps and bruises I’ve suffered along the way could have been avoided if I had only…

Poorly Defining the Marketing Strategy

had a clearly defined marketing strategy, supported by well-defined tactics. For example, customer X’s marketing strategy was to generate more sales leads by running Facebook ads.  Most people will think “sounds good to me,” and so did I.  A better objective was to get 10 or more leads per month of single mothers earning more than $50k per year that live in county Y using targeted Facebook advertising.  We got 13 leads and saved $800 in spend with this tweak, then doubled our leads the second month!

Failing to Test your Digital Marketing Ads

I remember running my first Facebook ad.  After reading all the hype and the insane money, people were making online. I thought “piece of cake.”  I deployed the “Let’s run some small ads and see what happen” plan.  I ran quite a few ads with varying results.  When we tweaked our A/B split test approach by tightly controlling variable changes our results skyrocketed.

Conducting A/B split testing by changing too many variables.  For example ad A is composed of a picture, copy, with a call to action, and color scheme.  Ideally, ad  B should be the same as ad A except with dramatically different copy. We’ll keep improving the message  If instead, ad B has the different copy with a bolder color scheme, it will be nearly impossible to determine if ad B won or lost to ad A due to the color scheme or the copy.

Not Knowing the Numbers

Just about every marketing tool provides some kind of metric.  But if you can’t separate the wheat from the chaff you will be chasing ghosts.  Relying on ROI alone is not enough because it expresses a bottom line ratio of cost expended to gain a sale.  Converting a stranger into a customer has many intermediate metrics that should be evaluated to ensure your campaign stays on the right track.  Quite frankly keeping tabs on those intermediate metrics, and making tweaks along the way will guarantee better ROI results.

Getting more traffic to your website is an evident goal. More people looking at your offerings usually means more sales. Google Analytics provides a massive amount of site traffic metrics which is overwhelming.  Check out this informative article from Bplans, The 6 Most Important Web Metrics.   After generating sufficient traffic, understanding how well your site is converting traffic into actual sales gets you that much closer to boosting your ROI. Take a look at the 8 Most Important Conversion Metrics from Kissmetrics Blog.

Marketing is Tricky Without a Test and Verify Approach

Many entrepreneurs don’t lack the confidence or the work ethic to build a business. However when it comes to digital marketing many believe only building a website and running AdWords, or Facebook ads is enough to get sales.  The reality is digital marketing requires a thoughtful approach that encompasses keen knowledge of your customer base, testing and revising your marketing campaign through careful analysis of traffic and conversion metrics.









What I Learned About Web Hosting and Web Design

I started my digital marketing journey in earnest way back in September 2016.  I have been completely overwhelmed with the massive amount of information available.  At some point, I realized that I needed to cut through all the “fluff” and hone in on what’s really important.

Web Hosting

Having a technically sound, reliable website.  It sounds like a no-brainer, but in hindsight, I should have done more research on hosting companies. My primary consideration was cost, followed by consumer reviews on their service support.   I ended up choosing eHost.  The cost was great, and overall the reviews were pretty good.

But now that I have been working with eHost, I would have paid a little more money on the front end for built-in and configured performance tools.  For example, it would have been nice to have a built-in content distribution network (CDN).  CDN helps to greatly speed up your website by caching your site on servers around the world.  The end result is that your site becomes extremely fast to users no matter where their geographic location is.  Built-in security tools, and robust backup tools would also be nice.

Basic hosting packages will save you money in the short-term, but costs will grow when adding a la carte features. Another important consideration is that you have the responsibility to properly configure each add-on service/feature.  Not everybody can, has the time, or patience to do so.  Fortunately for me, I have extensive knowledge and training in technology. But even I had many profanity rants trying to figure out why something was not working!

The bottom line is how much are you willing to pay for convenience vs saving with a DIY approach?  The hidden benefit of DIY is that you will definitely earn your battle scars!  I have made so many mistakes, that I have learned what works and what doesn’t.  The downside of DIY is the time expended to learn, and the potential to make catastrophic mistakes.

Web Design

The second most import consideration is design.  Now that I have settled on a hosting company, I now needed to make my website.  My first choice was to use a drag and drop web design tool such as WIX. WIX is very easy to use, and even fun at times.  The nightmares began when I wanted to customize something, or the available templates were missing something I wanted.  WIX and similar tools are great for simple, well-defined sites.  However, getting under the hood to customize images, text, and many other things is challenging.

In the end, I decided to go with WordPress.  WordPress has a lot going on, and the learning curve can be steep.  But eventually, after many tears, I was able to create something I could be proud of.  I had a lot of help with YouTube videos, and hundreds of Internet searches on widgets, plugins, and themes etc.

I ended up using the Vantage theme, which has been very good.  However, each theme has its own idiosyncrasies.  For example, I bought another theme because it looked pretty cool.  After I installed the new WordPress theme, I had to learn how to use that new theme.  The layout was different, the methodology was different.  So I switched back to Vantage because I was familiar with it enough to be productive.

One serious consideration that came to light while working with WordPress themes is the theme’s overhead.  Themes are programming marvels in my opinion.  However, all that programming can dramatically effect page speed and page load times. To get your site’s performance optimized, you’ll need other programs to help.  consequently, adding additional complexity potentially making your site less stable.

What did I learn?

The take away is to spend more time clarifying your websites ultimate purpose (think big) and engineer your hosting and web design around that.