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Saturday, April 22, 2017
Social Media ROI 101 A Comprehensive Guide
Measuring the return on your social media investment is no longer optional.
To secure ongoing executive buy-in and budget for your social marketing strategies you need to demonstrate how your efforts are contributing to the business’ goals.
Maturing from an experiment to a core business strategy, social media is now an impactful marketing channel that needs to compete against other channels—for budget, resources, and respect. This means that social, like other channels, has to prove its return on investment (ROI).
But beyond proving the impact on your organization, measuring and tracking social media return on investment also lets marketers dedicate more time and resources into what’s working, and improve the tactics that aren’t delivering real value.
Social media ROI is what your organization gets out of its social marketing efforts. After all the time, money, and effort put in—what’s the output? Ideally this would be measured in dollars.
A simple formula for social media ROI might look like this:
Money generated via social media – investment (people hours, ad budget, etc.) = social media ROI
Like any formula, the math is easy if you have all the variables. But what if your variables aren’t easily quantifiable? As social media marketers know, the success of a campaign is not always measurable in terms of hard numbers.
What kinds of things did your target audience do after exposure to your campaign? Did these actions align with your goals? Where did they fall short? How can they be improved for next time?
If you need another way to consider your social media ROI, think about the ratio between gain and cost, which includes things such as:
Social media technology
Agencies and consultants
Social media advertising budget
For estimating the gain from certain consumer actions (purchases, page views, downloads, email list signups, etc.) you need to look to analytics to determine which conversion events can be attributed to social media. This helps you define your social media ROI and prove the value to your organization and brand.
Why measuring ROI is important
Talk is cheap, so while you could tell your stakeholders or clients about the value of social media campaigns and why they need dedicated resources, nothing will convince them more than being able to actually show results through ROI.
Everything is taken more seriously when there are measurable and specific outcomes, and this is especially true for social media ROI.
Measuring your social media ROI is important for many reasons, including, but not limited to:
Proving the value of social media to your organization’s overall goals and business objectives
Showing where your efforts and resources are being used efficiently
Helping you determine where resources are being wasted, or used inefficiently
Allowing you to recognize gaps in strategy, key messages, and content
How to set social media goals to prove ROI
Now that you know what social media ROI is and why it’s crucial for your business, it’s important to set some goals.
As mentioned above, before you’re able to measure your social media ROI, you need to know what metrics you are actually measuring.
When pitching your boss and trying to get buy-in, the key is to set social media goals that complement existing business and departmental goals.
If you have set a specific number of leads you’re trying to attain this quarter, set the number of leads you want to be driven via social media.
If one of your goals is to increase landing page conversion by 10 percent, ensure that you’re tracking the conversion rate of people who land on the page through social channels.
Audit your existing social media performance to establish baseline targets, then set appropriate goals for improvement.
Key examples of social media metrics to track include:
Sign-ups and conversions
It’s important for social data to be relevant to stakeholders within your organization, not just social media practitioners. Tying social media to the big picture by linking it to organizational and departmental goals will help you achieve that.
If you need some help determining goals, we recommend using the S.M.A.R.T goal framework. Explained in more detail through our piece Don’t Just Create Social Media Goals—Reach Them, you want to ensure that the goals you are setting are specific, measurable, attainable, relevant, and timely.
For example, rather than simply saying that you want to increase your engagement, set a numerical value and a deadline for this, such as aiming to have 50 customer interactions per week by the end of your first quarter.
56 percent—an inability to tie social media to business outcomes
39 percent—a lack of analytics, expertise and/or resources
38 percent—poor tools
35 percent—inconsistent analytical approaches
30 percent—unreliable data
While it may seem difficult to prove these hesitations wrong, there are several tools available to help you.
Social media ROI tools
Once you’ve established your social media goals, you’ll need the right tools and tactics for measuring results. Here are a few of the best:
Google Analytics: Track website traffic, on-site conversions, and sign-ups originating from social media campaigns.
Hootsuite Analytics: Hootsuite offers a variety of analytics tools to help you track your reach, conversions, and more. A few noteworthy examples are:
Hootsuite Insights will help you identify conversations within your industry, your reach, brand sentiment, and much more, with 100 million data sources, real-time results, and an intuitive interface.
Custom URL parameters allows you to track which social networks and social messaging did or did not drive traffic to your site, blog, or landing page.
Hootsuite Analytics Reports offer quick snapshots of your reach through metrics like follower growth, total daily URL click-through, and per-post stats for Facebook, Twitter, and more.
LiftMetrix: Designed to help organizations understand the revenue impact of owned, earned, and paid media social media strategies. A few ways they do this:
ROI dashboards allows large teams to easily create different views based on job roles and departments. Measure the full social conversion funnel—end-to-end ROI measurement of true business metrics like purchases, sign-ups, email acquisition, and more.
Daily recommendations provides easy-to-understand content recommendations and insight.
Content theme analysis allows you to filter and measure which content themes perform best across all of your posts from Hootsuite.
Competitor analysis keeps your finger on the pulse. Know what your competitors are doing and saying on social media and how they are achieving success.
How to report your social media ROI
Once you’ve set your goals and chosen your social media analytics tools, it’s time to actually track your social media ROI.
The ability to track should be built into everything you do on social media, so you’re never left scrambling to try and prove the success of a campaign.
Best practices for reporting:
Use templates—Creating analytics templates will allow you to track your desired metrics without having to build out custom reports for each campaign. These reports will also present the data in a digestible way, allowing you to simply and effectively share your ROI on social media with higher ups in the organization.
Check your metrics daily—You should check your various social media metrics frequently to ensure that your social media goals are being met. The lifecycle of a social media campaign is often very short, so you need to stay on top of the data as it happens.
Stick to a timeframe—Choose a timeframe that works for you, and stick to it. You can often have reports sent to your email inbox on specific days of the week so you don’t even have to remember to pull reports yourself.
Next steps: Make adjustments
Once you’ve identified what works and what doesn’t work for your organization on social, it’s time to adjust your strategy. The point of tracking your social media ROI isn’t just to prove your social campaigns are valuable, it’s to increase their value over time.
Go back and take a look at the goals of your specific campaign and evaluate how they tie into the organization’s overall goals.
Due to the short lifecycle of social media campaigns, a failing campaign should be changed and improved as soon as possible. Social media is never static.
To meet your social media ROI goals, you’ll need to update and adapt your strategy constantly. Take into account the analytics data you’re tracking. Think about whether your data needs adjusting after calculating your first round of social media ROI, and get back to the drawing board if necessary.
The setting of business goals and calculating your social media ROI is not going to be a black and white, one-time event, but rather an always-evolving process.
Measuring social media ROI gives your organization valuable insight into the success of current and past campaigns, and what might work in the future.