Latest posts by Jay Dillon (see all)
- Which Social Media Platform Is Best For Your Business? (FB, Twitter, IG?) - February 8, 2016
- The Role of Social Media Manager in 2016 - February 1, 2016
- Why Placing Ads In Blogs Can Be A Negative - January 4, 2016
When I worked in bigger ad agencies I always wondered why no-one discussed return-on-investment for big budget activities like billboards and TVC.
Strangely in the world of digital marketing it is the first thing a potential clients wants to know. Although it’s the top topic of discussion for new clients, rarely do I come across a company that had been successfully measuring a return on their social media marketing activities.
What is ROI and why do we need to measure it?
Social media ROI provides proof that your marketing efforts are effective. ROI formulas only use two inputs, the return and the investment, which makes it an easy way to measure and compare the success of your marketing campaigns.
The main challenge when measuring ROI is keeping up with the forever changing algorithms of the various social media platforms. Many social media sites, Facebook in particular, update their algorithm regularly (for Facebook this is called EdgeRank), which is why the type of content in your newsfeed is constantly changing. Every time the algorithm changes, social media marketers need to modify their strategy as well.
The first step to measuring anything is to set goals. How do you know what you’re striving for if you don’t have goals?
There are a number of ways to measure social media ROI but goals need to be set before anything can be assessed. Establishing your goals will help determine which factors to measure.
Social media ROI can’t simply be determined by crunching sales numbers because there are a bunch of other factors to consider such as improving customer service, customer retention, and raising brand awareness. These are things that can’t be measured using a simple “in/out” calculation because there are just too many variables involved, and the sales cycle could be months or even years long.
According to HubSpot’s Pamela Vaughan, a few factors to consider while measuring and setting social media goals are reach, leads, traffic, and conversation rate.
How do we measure ROI?
There are a number of tools used for measuring ROI and the majority of them are free.
- Google Analytics: This is your bread and butter for measuring how social media influences your website traffic. It can be used to track campaigns and traffic sources and is by far the best free tool for understanding how your social media strategy is converting into sales and leads.
- HootSuite: HootSuite is a useful management tool that can be used for tracking social media metrics. One of my favourite HootSuite features is that it allows users to schedule posts from several social media channels.
- Social Mention is similar to Google Alerts but it’s specifically used for social media. This tool provides insight into what’s being said and who’s saying it.
- Klout: Klout is a tool that helps gauge someone’s online presence. It helps you measure influence on Google+, Facebook, Twitter, and a number of other networks.
- Facebook Insights: You’re most likely familiar with this tool if you have a Facebook business account. This free tool gives you analytical data for your Facebook page only. Facebook continuously changes the look of the insights but it’s generally helpful.
- Twitter Analytics: This tool is somewhat new but it’s helpful, nonetheless. It compiles information such as favourited tweets, mentions, and new followers, which makes comparing your Twitter statistics easy.
Why commit valuable time to your social media efforts if you’re not going to measure the result? There’s always room for improvement when it comes to social media marketing and the first step for doing so is to determine the ROI of your social media strategy. Are you measuring your business’ social media ROI? Share your view in the comments section below.