Six Metrics to Tell Whether Your Social Media Advertising Is Working

Stretch each marketing dollar a little further and generate a higher return on investment.

Haven
October 20, 2021
Business

So you’ve finally decided that this whole social media thing isn’t going away and that if you can’t beat ‘em, you might as well join ‘em.  Your business has its own social media presence now, complete with a Facebook page, Instagram page, LinkedIn page, and Twitter account.  So what now?

If you’re like most businesses, then your next step was probably to start posting your own content.  How much time and energy you’ve spent posting how much content you’ve developed likely depends on the type of industry you operate in and the nature of your target market.  B2C businesses may feel more compelled to make a larger investment here in order to acquire new customers, whereas other businesses may prefer just to maintain a sufficient baseline to maintain the brand and recruit new employees.

Let’s say that you’re in the first bucket and you’ve further decided that you need to spend more on social media advertising in order to achieve your strategic objectives.  After you’ve spent the money, how will you know whether your objectives are actually paying off?

Here are six metrics to track so that you can measure your success:

1. Net New Customers

All the money you spent on marketing over the last month ultimately went toward getting you this particular number.  So make sure that you have a sense for how many new customers you actually acquired for all of your troubles.  It may be easy to track this number if your customers place orders through your website or sign an engagement letter, but it may be a little more difficult in a high-volume business like a bar or restaurant.  Either way, think about how your customers actually purchase your products and find a way at a minimum to count the transactions, and ideally to count unique customers, and track how that number grows over time.

2. Social Media Followers

Getting more customers means that you’ve successfully moved more people through your sales funnel; i.e., the process between when the person first hears your message and when the person actually becomes a customer by making a purchase.  One of the ways you can increase the number of new customers you add every month is to get more people into the funnel.  You can start to do this by inviting people to like or follow your social media accounts.  Start off by inviting members of your own network and asking your employees to do the same.

Once you’ve started adding followers, keep an eye on the aggregate number every week.  Is that number going up or down or is it flatlining?  Facebook and LinkedIn both have decent analytics pages for business accounts that allow you to track your followers and gain some insights into how they interact with your content.

3. Impressions

Having more followers is good, but the whole point of having followers is to get them to see your content so that you can position your brand the right way in your customers’ minds.  So don’t just stop at counting followers.  Go one step further and analyze how many posts your impressions are getting.  (An impression is generally defined as any occurrence of your content appearing on a user’s screen.)  Ideally, the number of impressions should be a multiple of the number of followers you have because some of them should interact with your content, causing members of their network to see it.

Since impressions matter, this is where social media companies start trying to make some money.  They control the network, and they can cause more members of the network to see your content, but they aren’t generous enough to do that for free.  You’ll frequently encounter offers for social media companies to boost your content in their newsfeeds in exchange for a fee.  Hold off on doing this until after you’ve generated enough content for people to have something to look at and until after you’ve got enough data to determine a baseline level of activity for your social media accounts.  That will help you just the effectiveness of your social media advertising later on.

4. Cost Per Impression

When you’re strictly engaging in content marketing, you’re simply putting your content out there to develop some brand awareness for your company.  But you might decide to supplement that effort by putting real dollars into your marketing to generate more impressions.  The cost per impression is what you’ll pay to acquire those additional impressions.  Social media sites will generally quote you a certain dollar amount to run an ad campaign with a certain projected reach, so you can easily calculate the projected cost per impression by dividing the dollar amount of the campaign’s cost by the number of projected impressions.  Just be sure that you calculate the actual cost per impressions at the end of the campaign with actual numbers, not projected numbers, so you know what you actually paid for.

This is also where it helps to have figured out the baseline number of impressions that you could have expected anyway.  Sites like LinkedIn will generally distinguish between organic impressions, i.e., the ones you were likely going to get anyway, and sponsored impressions, i.e., thoe that you paid to get.  Other sites won’t be quite so upfront with this information, so check the numbers so you can judge what you’re actually getting for your money.

5. Click-Through Rates

Ah, yes, the ol’ CTR.  Social media advertising is a funnel, and impressions are just the first step in the sales funnel.  The next step is to get people to interact with it, generally by clicking and going on to read your content or going to your website.  Out of all of the people who say your advertisement, the ones who actually clicked are more valuable.  They’ve shown just by clicking that they’re more interested in your services than the average bear.  If your click-through rate is really low, then you either need to spend some time generating more relevant content or rethink whom you’re targeting with your campaigns.

6. Customer Acquisition Cost

Here’s where everything starts coming together.  When reviewing a month, divide the total marketing spend for that month by the number of new customers gained, and now you’ve got your customer acquisition cost for the month.  Keeping track of this number will help you understand whether you’re overpaying to acquire new customers.  If you’re paying more to acquire each customer than you earn from them in revenue, then your marketing strategy isn’t sustainable, and you need to make some adjustments.  If you’re paying less to acquire each customer than you expect to earn from them in revenue, then you now know that you’re on the right track and can start trying to optimize your processes for greater gains.

Note that the way we just described customer acquisition cost is an aggregate measure for the entire business.  But you can also calculate this metric on a more granular basis, and that will help you make more nuanced tactical decisions with your marketing.  If you can estimate how many people interact with each of your marketing channels and how many new customers you actually gain from each of those marketing channels, then you can calculate customer acquisition costs for each channel.  That’s powerful because they won’t always be the same.  Try shifting marketing dollars from avenues with higher customer acquisition costs to channels with lower customer acquisition costs.  You’ll stretch each marketing dollar a little further and generate a higher return on investment for your marketing dollars.