In any organization, it’s essential to justify investment through ROI and social media is not an exception. However, social media being is evolution stage ROI calculation is much difficult as compared with traditional marketing. According to a study of marketing experts, 3 out of 4 marketing experts can’t measure social media ROI.
Set Social Media Goals
ROI can be measured in a variety of ways: through customer acquisition, lead generation, clicks, revenue, contest entries, etc. It all depends on your goals. Before you can track and measure your ROI, you need to determine your goals so you know which factors you’re measuring and what success looks like.
Top 5 Metrics for Auditing Your Social Media Marketing ROI: Beyond revenue, participating in social media has many “beneficial business applications, such as facilitating customer service and boosting public relations.”
Reach, traffic, leads, customers and conversion rate are the metrics Pamela Vaughan on HubSpot suggests you consider to determine social media marketing success.
Determine the Right Platforms
Your social media goals and resulting strategies must align with your platforms. Some fan bases are primarily on Twitter, others on Facebook, Pinterest or Instagram. Find where your audience spends their time so you can position your plan to be successful.
You need to track the time spent, cost of ads, etc., as well as the activities and campaigns you launch as part of your social media marketing. There are a variety of tools you can use to do this.
Google Analytics: Track website traffic, on-site conversions, and sign-ups originating from social media campaigns.
Hootsuite Analytics: Hootsuite offers a variety of analytics tools to help you track your reach, conversions and more.
The metrics you should track are click through rate, impressions, bounce rate, engagement like likes, comments, fans, re-tweets, cost per 1000 clicks.
Calculate social media expenditure
Here you need to calculate the amount that you spend on social media during the time of your campaign or just taking a specific campaign interval into consideration. Here are the steps on how to calculate the social media expenditure:
Hard costs: Calculate the hard costs which denote the work or costs associated with the actual project during the campaign or during a specific interval.
Soft costs: Calculate the soft costs which include the unseen work that composes the initial part of developing a project during the campaign.
Cost/Time spent: Unlike other investments, social media has a greater value when it comes to time spent on it. Calculate the money spent per time spent on social media during the campaign.
Sunk costs: Calculate the sunk costs involved during the campaign which include the costs that were required during a new addition or an internal fix during the campaign.
Social media expenditure (E) = Hard costs + Soft costs + Cost/Time spent + Sunk costs
Using Metrics to Drive Changes to Your Social Media Campaigns
Different networks are going to have different metrics and different methods of analyzing those metrics, but there are three characteristics that can be determined for almost every network and can help identify areas in need of improvement: page views generated, following/reach, and sentiment.
Page Views Generated: Each social media profile and every post you publish on it should point your followers to a landing page on your website. If your web analytics reveal that a certain network is generating little to no page views for that landing page, it could be that you need to rethink the content you share.
Make sure your posts are relevant and engaging. Be sure to include calls to action urging viewers to click over to your site, like “Visit our site and…” or “Click here to…” By driving more users to your site, you increase the likelihood of conversion from prospect to customer.
Following/Reach: Your following reflects the number of users who have willingly subscribed to your content, while your reach reflects the number of users following those users who share your content. Your reach directly affects your following, as you are more likely to gain followers as your reach extends.
Again, make sure your content is relevant and engaging. If it is, users will be more likely to share it with their followers.
You can also alter the timing and frequency of your posts in order to maximize reach. If you determine when during the day and week your followers are engaging with content in general, you can optimize the timing of your posts to increase engagement with your content.
It could also be that you post too infrequently (or even that you post too much!). Altering the frequency of sharing will also help maximize your followers’ engagement with your content.
Sentiment: Though technically a qualitative metric, it is possible to quantify sentiment toward your company. It requires a bit more time and attention, but you can determine whether a page, a piece of content, or your company as a whole is being referred to in a negative or positive manner. Then, you can make adjustments or address concerns accordingly, improving your company’s quality and credibility in the eyes of your customers.
You can also use the sentiment of mentions to determine what exactly your customers have a problem with. For example, if your new product is being referred to positively only 30% of the time it is referenced on social media, it may be worth it to report those findings to whomever it may concern, whether it involves the taste of the product, its price, or the offensiveness of a recent post.