How To Measure Social Media ROI Confidently?
A lot of digital marketers having a challenge to justify additional social media marketing budgets. Apparently they have issues proving a definite ROI based on the SMM budget being consumed.
Earlier on, say five to six years ago, it was almost impossible to accurately measure the Return On Investment delivered by a social media marketing strategy. Today there are all kinds of tools available to monitor SMM strategies, and specifically to derive / measure the ROI of any SMM strategy.
On a tangential note, it’s vital that a proper SMM strategy is planned, documented and applied. This is typically an area completely ignored by too many marketers and business owners.
In the absence of such any social media strategy document, it’s almost impossible to determine what the SMM strategy has set out to achieve, hence it’s extremely difficult to validate measurable ROI.
Measure Using Google Analytics
Let’s assume that the current SMM strategy goal is to drive focused traffic to a specific landing page with Call To Action to subscribe to the site, hence grow the site mailing list.
Therefore increase in the number of focused site visitors, driven to the landing page from various social streams must be measured and quantified once the SMM strategy is applied to the site.
It’s really simple to measure how many people arrived at the landing page from multiple social media streams AND what action they took when they landed on the page.
Valuable support metrics that help quantify the ROI on SMM expenditure could be:
Increase in focused site visitors
(i.e. The traffic that used to come to the site before the SMM strategy kicked in versus after.
Reach and impressionsLeadsSignups/conversionsRevenue
These metrics can be effectively measured by a combination of Google Analytics and the analytics built into almost all of the social media streams to which the SMM strategy is being applied.
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Link To Specific Company Products (& Services)
Identify a specific business goal. For example, let’s assume that the site sells a product whose sales are not doing as well as the other products available on the site.
The SMM strategy is being used to drive focused traffic to this specific product page in order to boost its sale. The SMM strategy’s ROI can now be quantified by how many site visitors who reached the product page in question, clicked through and made a purchase.
This is just one example of how the use of a SMM strategy is linked to a business goal, because this linkage is defined and visible an ROI on SMM expenditure can be measured and quantified.
Instead of driving focused site visitors to a specific landing page on a site to measure the ROI of a SMM strategy, one can always place a – Buy Button – on the post within social media stream itself.
That said, fans will not hit that – Buy Button – within the post on the social stream unless you’ve already built a strong, trusting relationship with them.
Hence, even if this metric is simple to measure, one has to approach using such a SMM strategy after giving the matter some thought OR actually trying it out and watching results carefully over time.
One must define, document and execute a SMM strategy based on specific business goal(s), which should encompass:
#1- How you gain followers
Are these really targeted audience or are you following those who follow you? You should have a buyer persona document and use this to identify your ideal customer based on the specifics of the social stream chosen.
There are several tools that can assist you to achieve this, such as Followerwonk, this tools allow you to search for followers based on their interests & demographic.
#2 – How you engage with followers
Are you internally producing and delivering great content which can spark discussions regularly, or are you curating content?
Carefully consider how many times promotional post is posted against educational/fun/value add posts. People have so many marketing messages thrown at them today that most have learned to automatically filter such messages out.
#3 – Determine the best time to engage followers?
Determine exactly when your ideal customers are most active on a specific social media stream, they deliver appropriate post content to them, this is what will help you to connect with them effectively.
#4 – Decide which tools will be used to measure engagement and track customers
Social and other analytics tools deliver excellent statistics allowing anyone to track followers coming in from various social streams and making purchases on the site, thus the ROI of any SMM strategy can be measured.
Use a combination of appropriate social media tools and Google Analytics and extract the statistics you need to measure the ROI being delivered by the SMM strategy.
Decide on how often you need reports generated. Quarterly / Month reports may be needed by the finance department of the company. Weekly / Daily reports may be needed by the digital marketing department of the company.
These reports help track your SMM efforts and determines the ROI on the costs consumed by the application of the SMM strategy. They also allow you to determine whether the SMM strategy is meeting business goals or has to be tweaked if it is not.
To find out how you can achieve this using Google Analytics, find out Chris Sietsema’s article “The Top 5 Google Analytics Reports for Social Media Marketers.”
For tools like Hootsuite, which has a suite of analytics tools in its scheduling app, you should look at the reports section on Hootsuite University. The tools like UberVU add-on for Hootsuite website also allow you to create a very comprehensive reports that offer a nice clean, understandable interface.
Working With The Numbers
To identify / measure the ROI you will have to analyse a fair amount of statistics and derive a comprehensive synopsis from such statistics.
As a digital marketing manager, one should be aware of all the costs associated with your social media marketing activities.
Time spent on social media streams marketing your content thereAdvertising chargesCost of producing content
Once you understand the reach being achieved, you can go on to reverse engineer the math.
Let’s assume, that your goal is to create 250 conversions derived via social media marketing.
The formula would be:
Number of leads you wish to have / average landing page conversion rate / average click through rate
Today the average landing page, conversion rate is about 2%.
The average – Click through – rate is in turn 1%
Based on this simple – Rule of thumb – assuming a 1% final conversion rate, the total number of focused site visitors the SMM strategy must drive to the website would work out as 12,500.
Remember that figures are based on industry averages. One can further increase – Click Through Rates – (CTR) by optimising post content and targeting social stream adverts very carefully.
Bumping up the sites CTR is much easier to do through paid social media advertising. This is because social media advertising allows you to segment groups AND to remarket to those who clicked through but didn’t convert.
Understand Your Audience
There are a three key issues that must be kept in sharp focus when measuring ROI mapped to any SMM strategy costs.
You must be:
Intimate with your potential / customer personasCrystal clear about what the business goal(s) areAble to tightly integrate the Social Media Marketing strategy, specifically the content delivered on each social stream, with the customer personas and business goal(s).
The most vital component being the specific ability to craft content that suits your potential / customers perfectly.
A careful analysis of the data obtained from SMM tools and Google Analytics with make you completely aware of how your potential / customers are engaging with the content delivered especially what they like the best.
Then (if necessary) the SMM strategy can be tweaked to boost ROI significantly.
Social ROI is both measurable AND achievable.