When it comes to building effective social media ad campaigns, the biggest question isn’t “how much should I spend?”

It’s “for every dollar I spend, how much do I get back?”

In other words, it’s all about return on investment (ROI) — how are ad spending and customer conversion linked? Understanding this connection makes it less important how much you spend, and instead lets you focus on the impact of your social ads. In this piece, we’re taking a look at how to measure social media marketing ROI and offering a look at eight tools to help streamline the process.

What is Social Media ROI?

Social media ROI is a measure of the benefits delivered by social media marketing campaigns compared to the total investment on these campaigns — including money, time, and effort.  

While specific measurement timelines and media metrics will differ, the role of ROI remains the same.

How to Measure Social Media Marketing ROI?

One of the most popular and data-driven ways to measure social media marketing ROI is through paid advertising. The problem arises, though, when there isn’t a sound strategy in place to yield a positive return on investment.

How does this happen? Typically, social media marketers build an AdWords campaign to rank for important search terms. The campaign drives clicks, traffic, and leads, but ultimately the ad spend outweighs the impact of the ads which is bad news for ROI.

How Much Should You Spend on Ads?

Assuming you’ve run the numbers and now know what you can expect in terms of profit and ROI, it’s time to launch a campaign. To do this you’ll have to make two budget decisions, regardless of where you are advertising:

  • Total campaign budget or duration: How much do you plan to spend in total? How long will the ads run for? Be aware that if you don’t set a limit there will be no maximum or end date.
  • Daily budget: How much do you want to spend a day?

There are two ways most marketers use ads, short-term and long-term. Let’s take a look at both …

Short-term ads budget = at least a few hundred dollars over a month.

When marketers use ads for a short-term goal, it’s usually to jump-start a campaign or boost content that needs a bump. These ad spends are generally smaller and shorter, but can be large.

If you have a few hundred dollars to spend, spend it this way. Create a social post that promotes a piece of content and then use your ads to boost the post. Facebook, Twitter, and LinkedIn all have good solutions for this. Make sure you use the social network that gives you the best targeting for your persona and returns the most valuable leads. Measure this by assessing the quality of the leads generated after the campaign.

Long-term ads budget = at least a few thousand dollars over a quarter.

Ads can be a great solution in a pinch but if you really want to use ads strategically build them into your overall marketing strategy. This means more consistent, quarterly ad spends.

Consider how potential customers make purchase decisions and use ads to influence them. This may mean always relying on search ads or retargeting to make sure prospects find you when they are ready to buy. You’re more likely to accumulate better data taking this approach, which will allow you to get more sophisticated in how you optimize your ad spend.

Given the quickly-changing nature of social media platforms and posts, it’s worth considering social media ROI tools to help stay on top of spend and revenue measurements. Here’s a look at eight great options.

Getting the Biggest Social Impact for Your Spend

Bottom line? There’s no single way to spend your social marketing budget. Some companies may prefer to keep spending low and handle most of their ads through free platforms and word of mouth, while others are willing to spend top dollar for on-demand results.

Whatever budget you choose and whichever approach you take, however, there’s a common rule of thumb: Ask lots of questions about your ad spend, and make sure ads are performing as intended.

Why? Because even targeting the right market with the right approach, it’s easy to burn through money fast. Safeguard yourself by knowing what to expect, having clear expectations, and using the right tools to measure social ad ROI.

To read the full blog, visit our partner HubSpot‘s blog, here