The short answer is yes, you can measure social media ROI. If you explore this question in a little more detail however, you’ll quickly come to the conclusion that when it comes to social media, ROI is not frequently going to be directly financial.
But as we know that there is much more to marketing than direct financial return, and with many brands already reaping the benefits of social media (and many feeling the pain of jumping in without consideration), there’s something about social media that brings a whole new dimension to the world of marketing. And when we refer to social media, we don’t just mean Facebook advertising, we’re talking about customer interaction, real conversations and relationship building.
How can you measure social media ROI?
Measuring social media ROI is a much discussed topic, and a topic that has historically been difficult to achieve consensus upon, not least because business objectives when approaching social media can vary quite significantly.
So what are the options?
As marketers, it’s numbers – quantifiable results, that secure budgets and with a largely qualitative medium, you’ve got to work hard to prove its worth. There are a number of things you can do and online resources that are available to assist you in putting together a convincing report of your social media success:
- Start with the obvious
Before you do anything else, make sure that you don’t forget to monitor the obvious stats. They’re easy to get hold of and tell you a lot about your standing in the social media world. Start with stats such as Facebook fans, Twitter followers, Flickr contacts, YouTube friends – working on building your presence in these popular communities is a good starting point if you’re new to social media marketing.
- Monitor brand buzz
Keep an eye on how frequently and in what context your brand is mentioned on social media sites – you can do this by using a number of the Twitter applications that are now available – setting up a search in Tweetdeck to monitor mentions of your brand name is a great start.
- Analyse the stats
Just as you monitor your website for traffic levels, unique visitors, time on site, bounce rates etc (and if you don’t, you should!), any reputable analytics package will also let you monitor your referring sites – sites that are sending you traffic. This lets you monitor how much traffic you are getting from social media sites. If you want to be sure the figures you’re getting are accurate, take an average pre-social media campaign and compare this to your stats whilst on-campaign. If you have a more advanced package, then you’ll be able to track right from referred site through to conversion – giving you a quantifiable and directly attributable financial result from your social media campaign.
- More quantitative measurement
There are also an increasing number of online measurement tools that can help to justify your social media spend and give you a guide as to the effectiveness of your social media efforts. A couple of examples of such sites are:
- PostRank – gives you statistics on your news / blog feed and ranks popularity based upon how often and where they are shared on social media sites
- Xinu – a goldmine of information providing a huge range of stats on your website from backlinks through to social bookmarks and much more. Best used as a guideline and benchmark to improve your online presence.
The two above are free services and a little limited. If you are looking for more a more comprehensive online measurement tool, both Radian6 and Nielsen’s MyBuzz Metrics offer paid for services.
So the fact is, you can measure social media ROI, but it needs to be relevant to your objectives and KPI’s. Without relevancy in your social media activity, there are limited gains to be made.
When deciding on what you should measure, give consideration to the following three key metrics:
- Outputs – share of voice, tone of voice, site visits etc
- Outcomes – behaviour change, attitude change, increased brand reach
- Business results – the £££!
Embrace social media, enjoy social media and engage with social media. Given the opportunity to engage on a level never before possible, why would any marketer say no?!
Spencer Gallagher
Senior Vice President,
Global Practice Leader – Digital
Bluhalo Ltd – Part of the GyroHSR Network
Great summary, Spencer. To your question of “why would any marketer say no?” I’d reply: Social media is [are, apologies to HRM] can open a Pandora’s box of challenges to listening and responding to conversations involving a brand or company. Depending on a marketer’s objectives and/or the over-arching weaknesses and threats inherent in opening the dialog for some companies, social media may not be a viable option to explore. Apple Computer, for example does a lousy job of engaging its customers yet there are many raving fans. What might you think is at the root of this paradox?
Also, I’d recommend checking out Radian6, Visible Technologies and Small World Labs if you’ve not yet encountered them. Cool stuff!
Good article. There is a lot of talk about the ROI of Social Media but nothing has yet been defined clearly. To try to put thoughts on a paper (or adding to the chaos…), I pulled together a Social Media ROI spreadsheet. It is based on work by Charlene Li (Forrester) and Bill Johnston (Forum One) in that it compares online and offline benefits and costs.
The spreadsheet is downloadable at http://dagholmboe.wordpress.com.
I am a firm believer that running a business, you need to define an ROI in basically everything you do. Some people might argue that Social Media is different and that calculating and ROI is impossible. There is some justification to their arguments – after all, how do you quantify engagement or sentiment? Nevertheless, it is simply not correct that you can not define an ROI.
The problem with Social Media ROI is that it is difficult to define however Li and Johnston have done a great job defining it. My spread sheet is simply just an extension of their work.
Best,
Dag.
Spencer – Agree successful measuring of ROI is possible in online social media.
With nearly 70% of web content being user generated and over half of people on at least one social networking site it means that brands have to open themselves up to the democracy of the web and embrace it or become yesterdays brand.
Just as David Ogilvy (see we sell or else on YouTube: http://www.youtube.com/watch?v=Br2KSsaTzUc) understood that the long-copy direct response has its place in a brands success so the ‘long-copy’ version of web advertising that is social media output has its role.
For social media – the question I think brand owners should ask themselves is not when to exploit the opportunity of social media – instead it should be how to use it and successfully open Pandora’s box for the benefit of their brand.
Look forward to reading your next post.
Best,
Simon
Social Media ROI certainly can be calculated. In fact, you can use the calculator we developed by going to http://www.dragonsearchmarketing.com/social-media-roi-calculator.htm; just paste thsi in if the link doesn’t activate.
The government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.