It’s all well and good being able to create a strategy for social media, but understanding the impact of your strategy is vital for sustainable growth and engagement. At Giraffe we quite often get asked about the best metrics for determining a campaign’s overall performance. For us, there are two key metrics often at battle with one another; ROE vs. ROI. Both focus on different aspects, ROI focuses on the financial return on a campaign, meanwhile ROE shifts the spotlight to the value of interactions and engagements. Both play a vital role in understanding and enhancing your brand’s online presence.
Understanding ROI in relation to Social Media
Let’s be realistic, we all want to know where our money is being spent, and that includes stakeholders of brands. ROI offers a universal way to measure the efficiency of a campaign. In relation to social media, ROI offers a quantitative overview of the financial benefits received from the campaigns relative to the budget for those campaigns.
However, tracking and calculating ROI when it comes to social media campaigns isn’t as simple as it may seem. A variety of tracking metrics can be used including lead generation, sales conversion, and the direct revenue generated. While tools like Google Analytics and UTM tracking can assist with tracking the above metrics, they often require the end user to click on a specific link. They often also require specific coding to be added to a brand’s website (such as a Meta Pixel – used to track social media campaigns on Instagram and Facebook).
As a result, ROI calculations may not always be a genuine reflection of how a campaign has performed, which is why we must also consider the ROE of a campaign…
The Growing Importance of ROE
At Giraffe, we know a lot of brands rely on ROI to determine their marketing budget, ROI doesn’t provide a complete picture of how the brand is performing on social media. This is when ROE or Return on Engagement should be considered. Focusing on qualitative metrics including user interactions, shares, comments, and overall engagements. ROE provides an indication of how well your audience is responding to the content being shared.
According to a study by Consumer Goods Technology, 82% of shoppers want a brand’s values to align with their own. In addition to this, 75% of shoppers have cut ties with brands they were once loyal to due to a conflict in values. But how can a brand showcase its values? By integrating a human-first approach. Brands that use a customer-centric approach to social media are on average 60% more profitable, according to a trend report by Adobe, than brands that aren’t.
This highlights the potential to convert high ROE into ROI through enhanced customer experiences. Want to learn how you can convert engagement into investment? Give our AIDA Model Revisited blog post a read.
Balancing ROE and ROI
The only way to get a 360-degree understanding of how a brand is performing on social media is through a balanced approach that values both ROI and ROE. Integrating a human-first approach into a brand’s social media strategy means prioritising content that resonates with the target audience, fosters stronger relationships, and builds a community of brand loyalists.
When it comes to truly balancing ROE and ROI within your social media strategy you must first clearly define what success looks like for each campaign and how it aligns with the wider brand mission. For example, the primary focus would be ROE if the campaign objective was brand awareness. Engagement metrics such as likes, shares and comments all offer a quantifiable way to track the campaign. However, ROI will continue to take precedence in a campaign focusing on direct sales as these can be tracked through conversions and revenue.
How Can You Improve Your Strategy for ROE?
- Personalised content: Utilise the analytics and data available to you to tailor the brand’s content to resonate with different audience segments. Personalisation doesn’t always require directly naming someone either, it can be naming a group of people.
- Talk to your community: Actively engage with your audience by responding to comments, hosting live feeds, and engaging with user-generated content. Creating a sense of community and belonging helps to enhance the emotional connection between the brand and its audience.
- Tell your brand’s story: Trust us people want to know what your brand’s value and mission is. Did you start your business in your childhood bedroom? Tell your audience about it. An emotionally compelling story can enhance engagement, build followers and build authentic trust between the audience and the brand.
- Leverage the data available to you: With in-depth analytics reports now available at your fingertips there is no excuse for not utilising them with your social strategy. Using these reports to analyse the types of engagements that are most likely to lead to conversions, allows for a much more targeted and effective strategy.
- Experiment with A/B testing: Not every piece of content you put out there is going to work but A/B testing offers the opportunity to measure the impact of different engagement tactics on sales based campaigns. So you can figure out how to maximise your budget and effectively improve both ROE and ROI.
Conclusion
Both ROI and ROE have their place in the realm of social media, each providing valuable insights into the efficiency of a brand’s campaigns. At Giraffe Social we combine strategy and data-driven content with a human-first approach to allow your brand to not only survive but thrive on social media. Get in contact with us today to find out how we can help level up your brand’s social media strategy.
