All marketing is an investment, from your time promoting your business on social media to the money you spend on pay-per-click ads. For marketers, we call this your return on investment. Calculating your return on investment means tracking your time, your costs, and how much money you made in return.
The True Value of “Free” Marketing
Let’s break down your return on investment for a “free” form of marketing like social media. For this example, I’ll create a familiar scenario for creating web content and scheduling social media posts for a 7-day period.
- You spend 30 minutes of your time each day taking pictures of your work or screenshots of your projects.
- Once a week, you create a video for your website. This can take up to 1 to 2 hours for each post.
- Twice a week, you schedule 14 social media posts for three different platforms; Instagram, Pinterest, and Facebook. This takes you 2 hours for all three platforms, or 30 minutes if you use an application like HootSuite.
- You spend 10 minutes each day responding to comments and messages on all three social media platforms.
- Finally, you spend at least an hour each week tracking all these social media platforms.
At the end of a week, you have spent 5 hours and 40 minutes on your social media campaign. Was the campaign worth your time if you brought in 1 new client each month? How many new clients would you need to bring in each month to make your social media marketing worth your time?
Investing Money Versus Investing Time
For many business owners, breaking down the time they spent on “free” social media marketing is eye-opening. Some cannot attribute one new client to their work on social media!
This is why calculating your return on investment is important. It is easy if we just account for money invested. If that were accurate, the time you spent on social media just to get one more client was well spent! However, we must accurately judge the value of our time to get an accurate return on investment.
Return on investment also helps us understand expensive marketing, like direct mail and search ads. While direct mail may cost $700 a month, if it brings in 15 new clients a month and creates ten more repeat clients, it was worth the investment! If the marketing was “free” but cost us many hours each week, it may be time to re-evaluate your marketing investment.