and how it will increase the profits of your business
Social media marketing and advertising are obviously never getting out of fashion, or at least not in the foreseeable future. On the contrary - now, with the unusual situation that the world is facing, social media is once again proving to be the most effective channel for achieving a number of goals for the business.
Proper targeting, powerful message, and added value can guarantee astounding results of your social media advertising campaigns. Yet how exactly can you make sure that your efforts are paying off? Cost-effectiveness and intelligent profit management equal survival these days, so we are here to once again remind you of the importance of monitoring the metrics that actually matter.
What exactly are the KPIs of your advertising campaigns?
Key performance indicators (KPIs) are essentially numbers you should follow in order to track the success and the progress of your social media advertising strategy. Those metrics are intended to show advertisers whether or not had they managed to target the proper audience and deliver the appropriate message to make “viewers” convert into “buyers.”
Monitoring the proper KPIs rather than focusing on vanity metrics is vital for both newbies and experienced marketers so that they could keep their conversions high and their costs - low. Because competent advertising is all about returning the investment, isn’t it?
Which are the KPIs you should be measuring?
There is actually a solid bunch of metrics that indicate your social media ads performance, and explaining them all in detail takes a university course rather than a short article. Yet, we can sum up the most important among them as:
● KPIs that measure your reach
This group of indicators includes metrics such as Number of impressions, Post reach, Audience Growth Rate, and more.
Did you know that your Post reach can significantly increase if you schedule your posts according to the time corridors that are proven to be most effective for social media activities? As of 2019, those corridors are said to be somewhere between 9 AM and 12 AM, at the beginning of the workweek (Monday to Wednesday generally).
The easiest way to measure your monthly Audience growth rate, on the other hand, is to divide the number of new followers for the given month by the number of total followers. That’s an effective way to understand the long-term impact of your campaigns. Good reach but bad audience growth? You should change either your targeting or your creative message.
● KPIs that indicate engagement
Reaching the audience is not enough - you need to engage it. You can monitor your success in that uneasy task by measuring a number of KPIs such as Social Share of Voice, Average engagement rate, Virality rate, and tens of others.
The dream of every advertiser out there is to produce content that goes viral (for all the good reasons, of course). But do you know how to measure the “virality” of your post in numbers? No, it’s not just the number of shares. It’s the number of shares divided by the number of impressions and then multiplied by 100. So, a post with 1000 impressions and 100 shares has a 10% virality rate.
● KPIs that measure conversions
These are your Social media conversion rate, Click through rate, your Bounce rates, etc. Their idea is to show whether or not your campaigns managed to trigger sales, how did they do that, and where did they fail.
Good reach but bad conversions is a well-known and quite painful scenario. That's when you should start reconsidering your call to action, your copywriting game, and even the web design of your landing page.
● KPIs that measure cost-effectiveness
That’s the “real deal” here. Because your clients won’t care much about a campaign that went viral if it didn’t result in increasing their profits. Two of the fundamental KPIs that measure cost-effectiveness are your Cost-per-click and your Simple Return of Investment Rate (ROI). We are going to focus on explaining the second one in detail since we find it to be the most crucial of them all.
The most basic way to calculate the ROI of an advertising campaign is to integrate it into the overall business line calculation. How do you do that? You take the sales growth, subtract the advertising budget, and then divide by the same advertising budget.
(Sales Growth - Marketing Cost) / Marketing Cost = ROI
So, if the sales of the business grew by $1,000 and the campaign costs $100, then the simple ROI is 900%.
Monitoring those KPIs (along with a bunch of others) is not a one-time-adventure. It is an ongoing process that serves as a base for improved efficiency and increased profits. So brace yourselves - because metrics are here to stay.