We have seen that that Social media campaigns are very different from conventional marketing campaigns and hence the ROI measurement is much difficult from the conventional ones.The main challenge in measuring ROI is keeping up with changes in algorithms, implementing the new tools that hit the marketplace and proving to clients that they’re getting the most out of their investment.
Below is mentioned 6 steps to measure ROI in a social media campaign –
1. Setting Conversion Goals -Before one can track and measure his/her ROI, he/she needs to determine the goals so that one knows which factors he/she is measuring and what success looks like.Example of conversion goals could be online purchase, fill online form, sign up for newsletter, download pdf, share -like -follow a post, view video etc.
2. Define the right platform – When determining the target market, one must figure out who they are, what platforms they prefer and how much time they spend there. They one can find platforms that are the right fit.The platforms also vary as per the capability to brand, target, reach etc.
3. Track Conversions – How to track conversions will vary with social media platforms, IT systems and conversion goals.The top 5 metrics for Social Media ROI are Reach, Traffic, Leads, Customers & Conversion Rate.
4. Assign monetary value to each Conversion – This can be done in two ways, using historical data and by guesstimating.If one knows the Lifetime Value (LTV) of a customer , it’s easy to backtrack for conversion value.In guesstimating technique, common sense is applied to understand numbers and the numbers are then fed into algorithm.
5. Measuring total benefits by Channel – This step is all about collecting the incoming traffic and conversion numbers from analytics tool.The conversion numbers are translated to monetary values with the help of spreadsheet and associated values to each conversions.
6. Review results and Reset Goals -Once the stats are obtained, one can calculate the ROI and review the results of the marketing to see what worked and didn’t work.
In a nutshell, the Social Media ROI Cycle happens in three stages. The first stage is the Launch stage where organizations manage to get their social media campaigns up-and-running quickly.
The second stage of the Social Media ROI Cycle is the Management stage. In this stage, organizations re-visit their social media campaigns and realize they need to formalize their goals and their strategic approaches.
During the second stage, companies formalize the metrics around their social media campaigns. This includes tracking Facebook Likes, website visitors, Twitter followers and other quantitative metrics.
The final stage of the Social Media ROI Cycle is the Optimization Stage. Most companies don’t reach Stage 3 of the Social Media ROI Cycle because it involves tracking social media metrics while also doing A/B split testing to see which campaigns performed the best. The companies that do reach this stage ultimately test their way to success by dropping the campaigns that don’t work and keeping the campaigns that do work.
Though no social media ROI measurement is perfect or comprehensive, neither are many measurements of ROIs in other PR and marketing efforts. Using these methods, and using them over time, will be revealing of current ROI, as well as create benchmarks against which to measure future social media efforts and strategies.