The social web is all the rage these days, and many marketers are jumping onboard. According to an infographic by MDG Advertising, 76% of businesses are using social networking, and 64% are integrating it into their marketing plans.
But, while most agree that social media is an important tool for customer engagement and brand awareness, confusion sets in when the conversation turns to measuring ROI.
You can put a price on increased sales and lowered costs, but social media also yields many less tangible benefits that are much harder to measure.
If things like brand awareness and reputation building are part of your social media strategy — a goal-based method of measuring ROI may be easier to work with. Each company’s ROI will be different, based on the metrics you choose to measure.
This means you’ll need to have clear, defined goals for your social media campaign before you start; but shouldn’t you have that for every campaign regardless of media?
For social media efforts, consider measuring site traffic, conversion, page views, positive mentions, and number of fans, followers, likes and shares. There may be other specific objectives for your campaign:
- Engagement with existing customers
- Increased search ranking
- Encouraging word of mouth
- Boosting the success of promotional campaigns
- Short-term sales tied to the campaign
You can also measure your social media campaign’s value by splitting it into a few main metrics:
- Financial: Increased sales and/or decreased costs.
- Brand Perception: Has your brand’s reputation improved in the eyes of customers and followers? This one can be harder to measure; you’ll have to closely monitor mentions of your brand on various social media platforms.
- Damage control: Your ability to respond to issues affecting your brand’s reputation via social media. If your company has a publicity stumble, can you turn the public’s perception around through timely posts on your social networks?
- Intelligence Gathering: are you able to learn about customer preferences or concerns faster and leverage that information?
Goal-Based Measurement Example
Once you’ve got your goals defined for your social media campaign, how will you measure their success?
Here’s one example, using the goal of brand awareness or reach:
- The first metric is your brand’s reach, which is measured by adding up your number of followers on all of your social channels such as Facebook, Twitter, Pinterest, and YouTube. If you are in B2B marketing you might be focused on LinkedIn, Twitter, YouTube and SlideShare as top channels.
- Your second metric is your content reach, sometimes referred to as content mobility and engagement. This is measured by multiplying the number of shares your content receives by the reach (number of followers) of each sharer, then adding that number to your brand reach.
Since these calculations would be difficult, if not impossible, to manage manually, you will want to look into some of the top tools for measuring social web activities such as:
- Google Analytics
- ShareThis Plugin
(For a great overview of these tools and what they measure see this presentation from Brianna Smith of Fpweb.net.)Your social media goals may change over time, and so must your measurement strategy. In the beginning, just increasing your reach and getting people mentioning your brand may be enough; later, you might focus on hard deliverables like driving traffic to your website and converting traffic to sales. In either case, you’ll need to have a well-defined plan for reaching your goals, so that your ROI will be measurable from the start.