Measuring ROI From Social Activity
Following on from our post discussing Homepages Vs. Landing Pages, our focus now turns to measuring ROI (Return on Investment) from social activity.
ROI is what your company is receiving in return for the time, money and resources you’re putting towards social media marketing. In basic terms, how much money is going into your social media marketing and how much money are your social media goals worth?
There’s no point investing time, money and resources into social media for the sake of it.
Unless you’re tracking your marketing input and output, it’s almost impossible to determine whether your technique or approach is working. As well as that, measuring ROI is vital to exploring and understanding where you can improve your efforts, focus on particular channels and pursue specific goals. Further down the line, it’s also crucial to measuring whether this is below, on par or above targets and expectations.
Choosing Platforms, Setting Targets and Creating Campaigns
Before you even begin to measure ROI, you need to determine and define your goals and what you’re wanting to achieve.
This could be branding, customer service or lead generation based, with further differing objectives within each of these goals. On the other hand it may be more direct responsive goals you’re aiming to achieve, which again links back to the Homepages Vs. Landing Pages post. But be aware, some of these are easier to measure than others. Anything that is a measurable action allows you to receive accurate and reliable data, whereas goals like branding and customer service can prove more difficult.
Measuring link clicks, followers and shares is great, but are these being converted into leads? That’s the golden question.
And of course, whatever targets you’re setting remember they need to be SMART (Specific, Measurable, Attainable, Realistic, Timely).
Any goals or targets should be linked to campaigns. Even if it’s just the case of focussing on creating graphics or jumping on the back of a certain hashtag. This will enable you to track, measure and review marketing efforts much more effectively.
Similarly, it’s important to be aware that some targets may be suited better to differing platforms. Think about your target audience and potential customers. Some businesses may be perfectly suited to Instagram or Pinterest, some Twitter and LinkedIn and some a mix of both. You can read more about this on Sprout.
Now, let’s take a look at some tools and ways to track marketing activity.
Tracking Campaigns and Google Analytics
So, you’ve defined your goals and have began published all your killer digital marketing content. Now it’s time to start measuring ROI on social activity.
Google Analytics allows you to measure your site’s visitors, your most popular pages, how many visitors are being converted to leads, and just about everything else in between.
With this you can track the response to different social media campaigns and see which are most successful at bringing users to your site, as well as tracking other specific conversions. While nearly all social media sites provide on-site analytics that provide useful information, Google Analytics goes further, delving into the depths of your site and visitor journey.
Similar tools such as HootSuite and Sprout Social also produce reports and metrics, but focus on social account activity rather than your site.
These provide good basic numbers and information on your activity, with other sites such as Social Mention also tracking sentiment, usefully indicating if mentions are positive, negative or neutral.
Social Media Expenses
After you’ve got some sort of idea about how your social activity is comparing to your goals, it’s now time to look at outgoings and expenses.
The amount you spend, whether that be staff time, social media advertising, or social media management systems, must be taken into account when measuring ROI.
Review and Reassess
This is where you can compare figures with previous months or years, and really get a hold of how your business’ social media efforts are shaping up compared to goals and targets. You’ll be able to calculate your ROI and understand which approaches and channels are working and those which aren’t.
To work out your ROI as a percentage, use the following equation:
(Earnings – Costs) x 100 / Costs
If there’s one that’s delivering a negative ROI think about why this might be, what could be improved and what targets can be set for the future.
Once you’ve reviewed your campaigns and gained some handy numerical information, it’s time to determine a way to report your findings. You’ll also need to come up with a timescale that’s appropriate and suits you.
Think about a regular template that’s easy to understand and digest.
While stats and figures are crucial, it’s also important to consider how easy or hard it is for the recipient to gain an understanding of.
Consideration should also be taken into how the report is going to be presented. Will it be a presentation or received as an email? Either way, it will impact the language and detail you go into.
One thing that should always be kept in mind is the intangible benefits social media activity can bring to your company.
This could be brand building, customer service or any other non-measurable benefits such as word of mouth or keeping the brand at the forefront of customer minds. All of which can prove crucial in the long term to improving sales and referrals.
By taking you through ways to measure ROI from social activity, we hope we’ve got you thinking about digital marketing and the way it can impact upon your business.
Join the conversation on Twitter by tweeting @better_studio. We’d love to hear how your return on investment is performing and if we can help!