Measuring Social Media Marketing ROI

In business, can social media marketing be measured? If it can, how do you go about measuring the return on investment (ROI)? One important thing to remember is that the numbers are not the same for every company.

We all remember from Marketing 101 that the ability to measure the effectiveness of marketing activities as well as calculating ROI is imperative to a company’s go-to-market strategy. Although it is rather simple to measure ROI with most traditional marketing channels, such as print, radio, and even search marketing; it is much more difficult to measure ROI from social media marketing.

Social media measurement is one of the topics about which everyone has an opinion; however, people never seem to come to a consensus.

When it comes to ROI on a social media activity, it isn’t always measured by a direct sale. If a company tries to use social media strategies to directly sell products or services, they will most likely be disappointed with the result and the reaction of the company’s senior management will be that social media doesn’t help the company’s bottom line.
 
Different rules apply to measuring success as a result of social media than the success of a company that has sold products or services in the traditional way.

In the absence of any accepted metrics, businesses still need to be able to figure out whether a social media program is moving the needle, moving product, or otherwise making an impact. This greatly depends on the social media objectives of the company. Because these vary greatly based on the organization, it is impossible to agree upon standards. However, we can still measure ROI at the company level.

A company can have several reasons for wanting to employ a social media strategy. Any one of the strategies can be measured as an ROI. Your company may have a blog and may want to increase the number of people who subscribe to it. Maybe you want visitors to take part in a survey that will increase brand awareness. All of these social media activities are measurable and can demonstrate the success or failure of your business.

In most cases, if you are leveraging social media, you are driving traffic back to your website. Here are some general “engagement” metrics that you can monitor after visitors arrive at your website. Most of these metrics can be tracked by web analytics tools such as the free Google Analytics tool:

• Unique visitors
• Page views per visitor
• Time spent on site
• Total time spent per user
• Frequency of visits
• Depth of visits
• Conversions

There are several other elements that you can examine when measuring the success of your social media marketing efforts. Here’s a high-level view of “returns” that you can measure and to which you can assign goals:

Blogging:
• Number of subscribers
• Number of comments
• Number of links that posts receive

Twitter:
• Number of qualified followers (human follower, not bots)
• Number of retweets

Facebook/MySpace (and all other social networking sites):
• Number of fans/friends
• Number of comments per day/week/month
• Number of discussions started by fans

Brand Lift/Sentiment:
• More mentions of brands/products/services
• Increase positive sentiment
• Decrease negative sentiment 
 
Strengthening an individual’s reputation:
• Number of new network connections as a result of creating buzz around an individual, strengthening his/her reputation
• Positioning the individual as a subject matter expert (SME)
• The quality of the new connections
• Conversion of new connections to business partners and/or loyal clients

Videos/Photos:
• Number of subscribers/friends
• Number of views
• Number of comments
• Ratings

Forums/Message Boards:
• Number of new members
• Number of active members per month
• Number of posts per day
• Number of topics started per week

Conclusions
The final question that you need to ask yourself is: “How much are you investing in using social media to help your business succeed”? The investment most likely consists not only of the price of the software that you are using but also the amount of time that you and your staff are putting into this aspect of your business and the equipment that you need to buy to support the additional traffic that you generate from social media marketing. Remember that it is very important to include all of this in your strategy when you are determining whether the ROI is greater than all that you have invested in the social media strategy itself.

The key takeaway message, regardless of how your company chooses to measure engagement, is that you have a metric that measures success in mind before you begin. Without some sort of benchmark, it is not possible to determine your ROI.

For more information on Social Media Marketing, visit us at CompuKol Communications and read our blog articles.