Hey folks. Since the privacy changes over the last couple of years have impacted ROAS on social ads, I've seen more questions about the ROI of social. So I spent the last few months gathering data on Instagram for Shopify stores and now believe I have enough to share some findings. I plan to do the same for other social networks in the future.
The short answer: It's still worth investing in Instagram, but spending on ads without a broader long-term strategy is harder to justify for most stores.
Instead, you should be focused on converting your Instagram followers into subscribers (e.g., email or SMS). This allows you to consistently market to this audience long-term to better track, nurture and convert sales than you could with paid ads alone.
Said another way: you own your email/SMS list, you don't own your social following.
Ok, now onto the interesting stuff.
Where is the data from?
I used data from thousands of Instagram giveaways by Shopify stores over the last few years and combined it with email marketing sales data from Klaviyo (based on over 100,000 stores) to create the calculator that produced these estimates. For simplicity, the data is summarized by pre-defined industry and follower counts below.
How were these estimates calculated and what assumptions were made?
Follower growth, giveaway entry, and email opt-in rates are based on data from thousands of Instagram giveaways using an Instagram giveaway app we built. We then filtered the data so that only data from campaigns run by Shopify stores was used here to keep it relevant.
Revenue per email opt-in data is provided from Klaviyo's dataset and assumes one weekly email newsletter. Data is extrapolated over 12 months (the value of that new subscriber offer a year) and assumes one Instagram giveaway per month to estimate annual attributable revenue.
Notes: If newsletter frequency is MORE than once per week or MORE than one giveaway a month is run, expected results would be higher.
Assumptions the calculator makes based on the data described above:
Instagram follower growth rates: 4.76% - 11.87% per giveaway (varies by number of followers)
Instagram giveaway entry rate: 0.7% - 7.68% per giveaway (varies by number of followers)
Instagram giveaway entry to email opt-in rate: 43% (varies based on rules used, but this is on average)
Welcome email revenue per opt-in: $1.30 - $4.77 (varies by industry)
Campaign email revenue per recipient: $0.06 - $0.12 (varies by industry)
Notes/clarifications on the above:
More detailed explainers for all of these are in the calculator linked at the bottom of this post (mouse over each item for details)
The ranges depend on the size of the Instagram following, e.g., engagement/entries drop as the following grows.
The calculator maxes out at 100,000 followers since I didn't have enough data points to have confidence beyond that, but I'll update it when I do.
Entry and email opt-in rates eventually slow if always used on the same audience (after many giveaways), but this is offset using collabs. E.g., host a giveaway using a co-authored post with an influencer or partner business to keep reaching new people (effectively an endless pool of new people).
This is based on real stores with real (earned) Instagram audiences. Artificially large audiences (e.g. if you buy followers or buy engagement) produce very poor results.
How to interpret this data
Given the number of followers and industry shown, if you run an Instagram giveaway to capture email options, the new email subscribers you get will be worth that amount of revenue over 12 months if you 1) run one giveaway a month and 2) send a weekly newsletter.
Show me the data!
To be transparent, the actual calculator is on a marketing page to justify the many hours I've spent on this, but to spare you from that (because we're friends, right?) I've summarized the results below.
An example for the below data: For the Automotive industry, the value of 50,000 Instagram followers is worth $25,822.26 in annual revenue, assuming you send a welcome email + weekly newsletter and do a monthly Instagram giveaway.
Overall (average across industries)
250 Instagram followers: $1,346.17 annual revenue
2,500 Instagram followers: $3,423.81 annual revenue
25,000 Instagram followers: $8,044.35 annual revenue
50,000 Instagram followers: $16,088.71 annual revenue
100,000 Instagram followers: $32,177.41 annual revenue
Apparel & Accessories
250 Instagram followers: $1,439.07 annual revenue
2,500 Instagram followers: $3,660.11 annual revenue
25,000 Instagram followers: $8,599.54 annual revenue
50,000 Instagram followers: $17,199.09 annual revenue
100,000 Instagram followers: $34,398.17 annual revenue
Automotive
250 Instagram followers: $2,160.59 annual revenue
2,500 Instagram followers: $5,495.19 annual revenue
25,000 Instagram followers: $12,911.13 annual revenue
50,000 Instagram followers: $25,822.26 annual revenue
100,000 Instagram followers: $51,644.51 annual revenue
Electronics
250 Instagram followers: $1,308.61 annual revenue
2,500 Instagram followers: $3,328.29 annual revenue
25,000 Instagram followers: $7,819.91 annual revenue
50,000 Instagram followers: $15,639.83 annual revenue
100,000 Instagram followers: $31,279.66 annual revenue
Food & Beverage
250 Instagram followers: $1,308.61 annual revenue
2,500 Instagram followers: $3,328.29 annual revenue
25,000 Instagram followers: $7,819.91 annual revenue
50,000 Instagram followers: $15,639.83 annual revenue
100,000 Instagram followers: $31,279.66 annual revenue
Hardware & Home Improvement
250 Instagram followers: $2,176.4 annual revenue
2,500 Instagram followers: $5,535.41 annual revenue
25,000 Instagram followers: $13,005.63 annual revenue
50,000 Instagram followers: $26,011.26 annual revenue
100,000 Instagram followers: $52,022.51 annual revenue
Health & Beauty
250 Instagram followers: $1,219.65 annual revenue
2,500 Instagram followers: $3,102.04 annual revenue
25,000 Instagram followers: $7,288.35 annual revenue
50,000 Instagram followers: $14,576.7 annual revenue
100,000 Instagram followers: $29,153.4 annual revenue
Home & Garden
250 Instagram followers: $1,690.12 annual revenue
2,500 Instagram followers: $4,298.62 annual revenue
25,000 Instagram followers: $10,099.74 annual revenue
50,000 Instagram followers: $20,199.48 annual revenue
100,000 Instagram followers: $40,398.96 annual revenue
Jewelry
250 Instagram followers: $1,176.17 annual revenue
2,500 Instagram followers: $2,991.44 annual revenue
25,000 Instagram followers: $7,028.47 annual revenue
50,000 Instagram followers: $14,056.95 annual revenue
100,000 Instagram followers: $28,113.89 annual revenue
Mass Merchant
250 Instagram followers: $873.72 annual revenue
2,500 Instagram followers: $2,222.21 annual revenue
25,000 Instagram followers: $5,221.15 annual revenue
50,000 Instagram followers: $10,442.30 annual revenue
100,000 Instagram followers: $20,884.61 annual revenue
Office Supplies
250 Instagram followers: $1,091.17 annual revenue
2,500 Instagram followers: $2,775.25 annual revenue
25,000 Instagram followers: $6,520.53 annual revenue
50,000 Instagram followers: $13,041.07 annual revenue
100,000 Instagram followers: $26,082.13 annual revenue
Specialty
250 Instagram followers: $1,249.31 annual revenue
2,500 Instagram followers: $3,177.46 annual revenue
25,000 Instagram followers: $7,465.54 annual revenue
50,000 Instagram followers: $14,931.08 annual revenue
100,000 Instagram followers: $29,862.15 annual revenue
Sporting goods
250 Instagram followers: $1,545.82 annual revenue
2,500 Instagram followers: $3,931.6 annual revenue
25,000 Instagram followers: $9,237.42 annual revenue
50,000 Instagram followers: $18,474.84 annual revenue
100,000 Instagram followers: $36,949.69 annual revenue
Toys & Hobbies
250 Instagram followers: $1,221.63 annual revenue
2,500 Instagram followers: $3,107.07 annual revenue
25,000 Instagram followers: $7,300.16 annual revenue
50,000 Instagram followers: $14,600.32 annual revenue
100,000 Instagram followers: $29,200.65 annual revenue
Key takeaways
Instagram is great for finding new customers and email is great for driving sales from them
Instagram followers can be extremely valuable because they are already interested in what you offer, but you need them in a more monetizable channel, like email.
Keep investing in Instagram, but focus on getting Instagram followers on your email list.
TBH I was quite surprised by 1) the overall value of Instagram followers to Shopify stores and 2) how much it can vary between industries.
Future improvements
We're adding support for Facebook soon, so I should get similar data on Facebook.
We're also adding support for SMS, so I'll soon have data for that too. But TL;DR from the early data, I believe getting Instagram followers on your SMS list is still a good idea, but SMS seems to drive less revenue than email, though they tend to have different purposes and should work together. More to come when I get more data (e.g. maybe this is offset if people are more likely to opt-in to SMS).
Link to the calculator with more details
I hope this is helpful. Here is the link to the calculator for a bit more context, though fair warning, it is on a page we use for marketing, so you can skip it if you want since I've included the main stuff above.
Obligatory Disclaimer
Why this happened: My startup built a new Shopify app called POPSMASH that turns Instagram followers into email subscribers. So, though all of the above data was collected during our market research, I can vouch for its accuracy since it was collected BEFORE we started to focus on Shopify stores. We then focused on Shopify stores since they get by far the best results compared to other businesses. The revenue per email/subscriber data is from Klaviyo, who we do partner with, but we were not involved with the production of that data.
I'm happy to answer any questions.