What is the return on investment of social media?
Social media return on investment (ROI) is heavily debated within the music industry. Is it worth the amount of time spent? Can it make your brand bigger? What benefits does it actually provide? Those are all questions that we’re going to cover in this article.
First of all, what is a return on investment in social media? The answer will depend on what your goals are. But by definition, it is the return on your time, money, and resources that you spend within a marketing campaign. This includes (but is not limited to):
- How much money did you invest in social media marketing?
- How much money will it take to achieve your goals?
- How many hours are you putting into marketing?
Now that you understand the concept of social media marketing, it’s important to recognize why measuring success/failure is extremely important. After all, unless you are able to track how/where your money and time are being spent, there isn’t really a way to evaluate the success of it. By measuring the ROI of a campaign, you can easily adjust the budgets and time spent for any future campaigns. Likewise, if you’re using good analytics, you’ll be able to use trackable links so that you’re able to “double down” on the platforms generating the most revenue.
All of this article is great theoretically. But how does it apply from a practical standpoint? Let’s create a scenario in which you’re an EDM producer looking to sell merchandise in preparation for an upcoming show. If you used different trackable links for your own social media profiles, and different links for influencers promoting the products, you would be able to view which source of traffic was performing the best, and subsequently which had the best advertising spend.
Finally, you’ll want to be able to define your goals within social media. Keeping with the above scenario, there are many questions you may want to ask in order to evaluate your return on investment. For example:
- How many units of merchandise were sold?
- How many people attended the event?
- What was the conversion rate for purchases?
- What was the best performing traffic source?
Essentially, all of you goals should be measurable so that they can be tracked, and thus measured for analytical purposes. Because once you’re able to track & measure results, you can adjust targets when necessary in order to perform exceptionally well. This video from Gary Vaynerchuk perfectly explains the concept of this article:
In conclusion, the return on investment of social media is totally dependent on you. It’s dependent on your talent, and your ability to engage and interact with the consumer. For some people, social media is absolutely amazing and can make them millions of dollars. But in contrast, some people simply aren’t talented at it, or can’t be bothered to put in the time required to understand how to convert your audience into customers. What was the ROI of a Digital Audio Workstation (DAW) for Marshmello? The return on investment in social media is what you make of it.