Why should we measure Social Media ROI?
Companies need to be able to measure the cost of Social Media, for better or worse, in order for it to have an impact. But many companies don’t have the faintest idea about where to begin when it comes to measuring social media metrics and the Return on Investment (ROI).
A recent report by Emarketing published by NIBS Spectrum (a solution provider for small businesses) indicated that 86% of business who attended their workshops on social media strategies had adopted some social technologies, most said they were using the tools for marketing (57%) and internal collaboration (39%), while almost 30% reported using social technologies for customer service and support.
However, the debate in measuring Social Media ROI has confirmed some executives still prevent any form of experimentation until their questions and concerns were addressed in calculating the Return on Investment with real-world business performance metrics.
Despite the broad adoption of Social Media tools such as Facebook & Twitter, measuring its effectiveness lags behind. Only 16% of those polled said they used social media measuring tools for their programs. Additionally, more than 40% of respondents didn’t even know whether the social tools they were using were capable of measuring ROI. This means that companies are jumping into social media without actually accounting for how it will impact their business and what, if any, value it will add.
Around 25% of this survey suggested they had reached the “strategic” phase of their social media policy. Those in the strategic phase are considerably more likely than those in earlier phases of the process to measure their success. Generally, the number one goal targeted and measured by marketers is an increase in web traffic.
There’s an fascinating blog post called “measuring Social Media”, written by Jim Estill who’s on the board of BlackBerry makers RIM. It suggests that brand awareness is the new measuring stick of a successful marketing campaign, and that only the first set of eyeballs are the ones you pay for — everything after that is word of mouth. This follows on from an earlier piece Jim wrote suggesting that ROI in marketing is a false term.
While they’re both interesting reads, the idea that ROI and metrics are difficult to measure isn’t quite true; In fact, social media can offer some of the best metrics for ROI around. All you need to do is set what you want to achieve and how long you want to spend achieving it — and then measure your results against that.
Twitter – One of the darlings for any product launch, service or business, Twitter not only offers instant eyeballs but great returns as well. Again, measuring your impact is relatively simple:
• What was your retweet value?
• How often was your hashtag used?
• How many times was your vanity URL used?
• If you used something like Sponsored Tweets, what was the cost versus click-through and conversion?
Facebook – Fast becoming the key destination for many businesses and their products, Facebook offers some great built-in tools as well as demographic options to help gauge a campaign:
• How many new fans did you make over how many you targeted?
• How many times was your promotion message liked?
• If you built a Facebook application, how many times was it installed/shared?
• Were you successful reaching your target demographic (Facebook Insights can help you here)?
YouTube – More than just a fun place to see kids hurt themselves on bikes, YouTube is a key tool in any marketing campaign now
• How many views did you get?
• How many Likes and Favourites did you receive?
• How many downloads did you get (on video sites that allow downloads)?
• How many embeds has your video seen elsewhere on the web?
• How many subscribers did your channel attract?
Do you measure your ROI in your Social Media campaigns?, if so, please let us know your thoughts….
The debate continues…………..