How to measure the effectiveness of advertising on social media?

Many factors determine the brand's success. Among them are the idea, marketing strategy, financial capabilities, competition, and situations beyond the company's control, such as political and economic changes. In today's article, we will focus on the process of reaching customers. Learn how to measure the effectiveness of advertising on social media!

Social media advertising - where to start?

Let's say you run a service business that services 3D printers. You have opened a point in a medium-sized city and would like to attract new customers who bring their devices to repair or replace selected components. 

You should start your marketing efforts by answering these questions:

Advertising on social media - supporting questions

Let's assume you answered the above questions as follows - you plan to spend PLN 800 on Facebook advertising, reaching people who may own a 3D printer. The goal is to click on and fill out a contact form regarding a defect in the device, which would be given for repair. As a measurement tool, you will use Facebook's campaign statistics and the number of completed forms you receive in your company email inbox.

KPIs - Key Performance Indicators

The next step is to determine KPIs, i.e., indicators that measurably track the effectiveness of advertising. The most commonly used KPIs include:

  • the number of website views,
  • the number of products or services sold, 
  • the number of leads acquired,
  • the number of newsletter signups, 
  • the number of contact forms filled out.

Other more complex performance metrics that are widely used in brand promotion are:

Measures of social media advertising effectiveness

Does advertising pay off?

Let's assume that the owner of a 3D printer service promoted 4 ads for one month, allocating the previously mentioned budget of 800 PLN. It resulted in 30 forms being filled out. The service seller contacted customers, then managed to get 20 customers from the 30 leads. They gave their printers for repair at an average cost of 200 PLN. Did the advertising pay off? Let's use ROI (return on investment) to find out. It refers to the return on the investment made.

ROI - how to calculate

In the case described, the calculations have been simplified. Profit is revenue minus expenses. The cost of running advertising campaigns can be not only the expenditure of the advertisement itself but also, for example, the time of a specialist who configures them, the cost of a graphic designer who prepares the ad from the visual side, etc. In such a case, these expenses should be included in the costs, as they will affect the result.

You can also use the ROAS (return on ad spend) indicator. It includes the revenue generated by the ads divided by their cost. Then, in the example described above, we would divide 4,000 PLN by 800 PLN, resulting in 5 PLN of revenue for every PLN spent, i.e., 4 PLN of profit (400% profit on advertising expenses).

ROAS - how to calculate

Summarizing - social media is the ticket to getting customers

You already know how to measure the effectiveness of social media advertising. However, this is only one of the steps that need to be taken for advertising to deliver results. Other essential elements of the process are the creation of the ad according to the medium's characteristics and the campaign's precise configuration. 

If you would like to receive a ready-made advertising campaign from specialists in this field, contact us.


Autor Case Study

Przemysław Olędzki

Technical Writer

Doświadczony Technical Writer w obszarze blockchain mający w portfolio współpracę z licznymi projektami. Publicysta w dziedzinie ekonomii, psychologii i kryptowalut. W WMI zajmuje się realizacją wszelkich form wypowiedzi pisemnej - od dokumentacji technicznych, po artykuły blogowe.

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