Despite offering numerous opportunities to influence consumers, social media still accounts for less than 1 percent of an average marketing budget, in our experience. Many chief marketing officers say that they want to increase that share to 5 percent. One problem is that a lot of senior executives know little about social media. But the main obstacle is the perception that the return on investment (ROI) from such initiatives is uncertain. Social media campaign ROI needs to contribute to the bottom line. To prove that your social media investment is truly warranted, you need to track how your campaign is influencing every interaction you have with your clients. The following explains how to measure social media ROI.
Setting business objective
Brands should establish goals before the start of a social media campaign and determine what kind of tracking measures they need to implement upfront. Goals may include generating revenue, reducing customer service costs, shifting brand sentiment, improving operational efficiency, cultivating customer relationships or gleaning insight into target markets. These objectives are not mutually exclusive. In fact, a social media program can serve more than one goal. While increasing revenue and reducing cost ultimately align with financial goals, it doesn’t mean that social media can’t also assist in meeting PR, research or marketing objectives. Dell has found success with its @DellOutlet account in driving sales for refurbished computers, building to nearly 1.5 million followers and $6.5 million in revenue less than two years after launching the account in 2007. Companies such as Ford and Starbucks are getting better and better at integrating social media into multiple departments and business functions. The brand awareness created by social media—seen in vanity metrics including “likes” and “+1s” and “Retweets”—is valuable, but it is not enough. Only 34% of businesses feel that their social strategy is connected to business outcome. 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.
Select Social Media Analytics Tools
Once you’ve established your social media goals, you’ll need to identify and implement the tools and processes required to measure the ROI on your social media. This may involve adding tracking codes to URLs, building custom landing pages, and more. There are a variety of social media analytics tools which service to track the diverse metrics you are after. Here are some to consider:
Google Analytics: Track website traffic, on-site conversions, and sign-ups originating from social media campaigns.
Salesforce: Add Salesforce tracking codes to the links you share on social networks. When paired with marketing automation software like Marketo, you’ll be able to track sales leads back to specific campaigns or social messages.
Hootsuite Analytics: Hootsuite offers a variety of analytics tools to help you track your reach, conversions and more.
There are two types of web analytic which can be used for data collection
• Offsite – Information collection away from the server.
• Onsite – Information collection from the site where the server is located
Client side metric: It is better than server side. In case of client side, you indicate to the browser, every time you load a page, you take a call what is on the page. Google analytics is the example of client side as it is based on browser based analytics.
Server side metric: Originally web analytics started from here. It demands higher cost software, skilled people and it is not so accurate also. However, server side analytics is safer than client side metric. Because in client side metric there is risk that your data can be shared outside, even to your competition.
Once you’ve set your goals and chosen your social media analytics tools, it’s time to actually track your social media campaign 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.
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 an easily digestible way, allowing you to simply and effectively share your ROI on social media with higher ups in the organization. You should be checking your various social media metrics frequently, often daily, to ensure that your social media goals are being met.
Adjust to Improve
Once you’ve identified what works and what doesn’t work 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. 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 constantly update and adapt your strategy taking into account the analytics data you’re tracking.
Marketers should accept that calculating a specific financial return is not immediately realistic and focus on measuring the overall impact a brand’s social presence has on its relationship with customers.
The real value of social media initiatives is in developing and strengthening a relationship between a brand and its consumers.
Marketers should measure social initiatives in terms of branding and satisfaction metrics
The ROI calculation of social media campaign follows the same conventional marketing principle for calculation of ROI
In social media, try to increase R – return to maximize ROI , not to reduce I i.e. investment