Optimize your social media marketing spend using data
25th September 2023 - Reading time: 3 min
As a company you set out a social media marketing strategy to decide which platforms (Facebook, Instagram, TikTok, Linkedin etc.) and what content you want to deliver in order to achieve the highest return on investment. A good way to maximize this ROI is through a data-driven approach.
We are going to explain how you can significantly increase your return on investment by using data to understand which content should be marketed on which platform.
Align your desired outcome and pick out metrics
First you need to establish the outcome you want to achieve through your data-driven approach. Is the goal to improve sales, reduce costs, increase customer retention? This is something that is very important to align within your team and possibly in the organization before taking the next step. The risk is otherwise that you spend countless hours trying to measure everything resulting in lots of data and graphs but no structure around what you need to look at and why. Let's associate this with a customer case.
An ecommerce social media marketing team had been running ad campaigns for a while, but it hadn't been going well and wanted to reduce the monthly ad budget, and hopefully maintain or improve total order value.
The next step is to pick out metrics that align with your desired outcome. These metrics will serve as a guide while taking strategic actions.
To reduce the ad-cost for each order, and maintain or improve order value, the team used return on ad-spend (ROAS), purchase value, purchase value derived from each social media platform used (Facebook, Instagram, Linkedin), ad-spend, and ad-spend for each social media platform.
Set up the process for generating the information and look for data patterns
After alignment on outcome and metrics you should include historical data to paint the picture of how your social media marketing spend has been performing.
The team realized that ROAS was stable until six months ago when it began decreasing and was now down 20%. At the same time monthly ad-spend had doubled. The ad budget was spent evenly across the platforms.
By getting data insights based on historical data you can look for patterns in your metrics to see how you can change your current strategy to achieve the desired outcome.
By analyzing the metrics, the team saw that ad-spend had increased significantly on Facebook. However, the purchase value had decreased. At the same time, Linkedin purchase value had increased while ad-spend had remained flat.
Maximize your ROI through a data-driven strategy
These insights will then guide you to take strategic actions and measure the progress over time to see if it aligns with your desired outcome.
The team reduced overall monthly ad-spend, and decided to allocate a larger portion of the budget to LinkedIn ads. As a result ROAS increased by 50% and total order value increased while the monthly ad budget decreased.
The story above was from a customer who went through this data journey and as a result they were able to improve business performance and recognize several more patterns to make further improvements within their social media marketing strategy.
Want to hear more possibilities on how to unlock insights from your current business strategy or automate the process to receive visualized metrics from your data? Contact us!