Social ROI: A Tough Nut to Crack
“Social media is cool… but what’s the ROI?” This is the first question that is sure to pop in the mind of a CEO upon the very mention of “social”. And rightly so. No self-respecting marketing officer should approach social media without a clear view of the objectives of using the channel in question and an estimate of the impact social marketing activities would have on the bottom line. But while the objectives are fairly easy to set right, linking ‘likes’ to sales seems to be quite a challenge, even for the most seasoned of marketers.
Measuring the return on investment of social media has been a notoriously problematic issue, with wildly divergent opinions about exactly what the right metrics to track should be. The reason for that lies partly in the free, organic nature of social media, a fact which makes tracking engagement indicators through to sales near impossible.
But not if you use the right measurement tools and view social activity in the context of the sales cycle, argues Kim Benjamin in an article in Marketing Magazine. The author points out that while proving sales as a result of an exclusive offer in social media is easy to achieve, the real challenge brands face is determining the monetary value of social engagement, such as likes, shares and retweets.
According to Amy Kean from MPG Media Contacts, cited in the article, each brand’s measurement approach and key performance indicators must closely reflect the campaign objectives. In the case of Procter & Gamble, for instance, social is an important part of the marketing spend, the return on which is calculated through econometric analysis.
While most of us would be tempted to gauge the easily measurable indicators, such as number of fans, friends and followers, the ones that truly matter for companies driven by sales are social conversion rates. So it is incumbent on businesses to provide the opportunity for conversion – either on the social channel itself or through a link to a landing page on the company website.
That is not to say that metrics such as audience response rates and rates of fan growth are unimportant. One thing to remember is that conversion is a process – often a very long one – which starts with attracting a consumer to your brand, goes through engagement and lead capturing until it culminates in a sale. Unless you have captured a user’s attention, you cannot proceed to the next stage. And each customer journey is strictly individual.
So how do you crack the social ROI nut? There is no cut-and-dry solution: how you decide to track social engagement through to sales would depend on your specific campaign objectives. But what can clearly help in the process is using a unified marketing automation tool, backed by a lynchpin integrated strategy.
The 360-degree view of the individual customer journey offered by an all-in-one marketing analytics dashboard, backed by practices whereby the marketing and the sales team work together around a common goal can make your social offering more relevant to your audience, boosting social engagement and ultimately, sales.
What combination of metrics do you use to measure your social media ROI?
Image credit: Sarang, Wikimedia Commons
Content strategist and digital media researcher blogging at Media Morphology. I explore converging media spaces, multiplatform (adaptive) content creation, the intersection of content and code, and what all that means for journalism as a practice as we migrate to the new era of the web.
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