Despite positive signs for social media campaigns, assessing their effectiveness remains subjective – www.emarketer.com
Talk talk talk… What about ROI?
Asking about ROI is the right question for business, but it’s the wrong question to ask for social media. Equaling money with social media is like getting mad at a networking meetup because you didn’t make any money.
People use social media because it’s a party!
If your only thought about using social is to make more money then you’ll probably get mad a social.
Like relationships, the connections you make today can payoff years from now – social media lives forever.
Calculating Return on Investment
ROI = (return – investment) / investment
Social media ROI is your return from all the time, effort, and resources you’ve expended towards your social media efforts. Since most businesses use ROI to calculate the financial return on an investment, it’s best to calculate your social media ROI in dollars.
Unfortunately, there are no dollar signs dangling from retreats or likes subjective, however, Facebook and other social platforms have zero cost to join – making a zero dollar investment potentially fantastic.
In order to track ROI, you need to know a few things:
- How much are you going to spend? Identify your monetary investment in social media.
- What are you trying to achieve and what is it worth to you? Attach a dollar amount to your social media goals.
Step 1: Choose a Goal
There are a lot of possibilities when choosing goals or actions to track. Here are a few of the more common ones:
- New followers
- Visitor engagement – shares, likes or follows
- Link clicks
- Online purchases
- Completed forms or online quotes
- Email or newsletter sign-ups
- PDF downloads
- Time spent on important webpages
- Video views
Step 2: Track Your Goal
Choose one or more goals, and start tracking them.
You can track website actions (sales, downloads, signups) using Google Analytics by setting up goals and event tracking or with one of the third party services below.
Step 3: AdSpend
A. How much are you going to spend?
There are several different comparisons you could make with your other marketing efforts. Here are a couple of the more common approaches:
- Lifetime value – What is the life time value of a customer (LTV) worth to your business? Here’s a HubSpot article to help you calculate a customer’s value.
- Lifetime value, multiplied by conversion rate – How much is each potential customer visit worth to you?
- Average sale – How much is the average purchase through your site?
- PPC costs – How much would you pay if you were to achieve the result using digital advertising?
B. Assigning a dollar value.
While creating accounts on social platforms is free, your time is not. You’ll also need to include the cost of any social media tools you are using plus your ad spend (if any).
- Time – Multiply hourly labor-costs by the number of hours committed to the project over a given period of time.
- Glassdoor estimates the annual salary for a social media marketing manager to be $49,258. Another source to lookup salaries is Salary.com.
- Special social media tools, services, or subscriptions – The cost of tools and services you use for social media need to be included in your figures.
- Advertising – The amount you spend on social media advertising—boosting Facebook posts, promoting tweets, etc. also needs to be included in your figures.
All these costs combined will equal your investment.
ROI Summary
Measuring social media ROI might be different between two businesses. Here’s an example of how a business might calculate ROI:
Bonus: Want to learn more about calculating the return on social media? Here are 6 more resource to help to analyze, calculate, and determine if your social media marketing efforts are worth it:
- QuickSprout – How to Calculate the ROI of Your Social Media Campaigns
- HootSuite – How to Set Social Media Goals and Reach Them
- Social Media Examiner – How to Measure Social Media ROI
- Entrepreneur – 10 Questions to Ask When Measuring Social Media ROI
- Social Media Examiner – 5 Tools to Measure Social Media ROI
- Wikihow – How to Measure Social Media ROI
Tools for tracking metrics
You’ve thought about your goal, identified your audience, and have begun engaging them with awesome content – how do you know if it’s working?
Tracking
Analytics are an important tool to use in tracking site visitors and engagement. The more you know about the “who, what, when, where and why” of your site audience, the better you become at marketing to them. This video will explain the steps to creating a Google Analytics account and installing the tracking code on your website.
Monitoring and reporting brings insight to your search and social media marketing campaigns. Monitoring your customer service statistics is becoming increasingly important for many businesses and this video will examine how social media monitoring tools can be used.
Activity 1 – If you have a website, consider linking it to Google Analytics. Go to Google Analytics and follow the on-screen instructions. If you already have access to your Google Analytics account, consider what works and what does not work for your website by examining those pages which are visited and those which are not. How can you improve the content on the pages that are not visited? Could you use some SEO techniques to optimize these?
Read this post on Mashable on how to use Google Analytics by Meghan Peters.
The activities you should analyze include:
- Pageviews – Analytics will show you the top performing pages on your site. Take a close look at your pageviews to see if the pages are performing as expected.
- Average time on site – The longer a visitor stays on your website, the more engaged they are going to be. If your average time on site is less than 1 min., you want that to improve, otherwise these visitors will never convert to customers. Whether the average time on your site is high or low, analyze the traffic sources that are causing high engagement. The sources with higher engagement are the type of traffic sources that you should go after.
- Entrance paths – These reports show you the path visitors take once they’ve entered your website. You will be able to see the pages they view and know which content is important to them. By knowing this information, you can tweak your website for better performance.
- Bounce rates – This number represents a percentage of initial visitors who visit your site and then bounce away to a different site rather than continue on to other pages within your site. If you notice specific pages within your website that had a high bounce rate, you are not doing a good job of providing content relevant to their needs. Here are several ways to lower your bounce rate:
- Make sure the content matches the keywords that visitors entered upon. Disappointed visitors will leave your site quicker.
- Create attractive headlines.
- Add or modify your calls to action.
- Adjust the page content or add images to make your content more engaging.
- Provide links to related content to keep your visitors on your website.
- Exit rate – by analyzing the exit rate, you can get a better understanding of the pages that are causing your visitors to exit. High exit rates do not mean there is something wrong with that specific page. Example: An e-commerce website “thank you for ordering” page should have a high exit rate.
When analyzing pages with high exit rates, consider why the page might have a high rate. If the page should not have a high rate, consider adjusting the content and the call to actions so that you can drive more visitors to the page you want them to exit on ( i.e. order confirmation page).
- Conversion rates – this metric rate seems obvious, but the majority of website owners never set up any conversion points within their analytics. Here are a few examples of conversions you should be checking:
- Merchant websites should track when people purchase a product.
- Service oriented websites should track leads.
- Blogs should track RSS subscription rates.
- Social sites should track user sign-ups.
- Testing headlines – By experimenting and tracking different headline styles, you will quickly learn what type of content resonates with your audience. Once your headlines are targeted to your audience you should see an increase in your click through rates (CTR) and average time on site metrics.
- Site overlay – You will not fully understand how a visitor interacts with your website by only looking at numbers – you need a visual representation to understand how they are interacting. A site overlay is a heat map that tracks mouse movement. Combined with analytical data, site overlays will give you the fast track to figuring out how visitors are interacting with specific webpages and webpages you should make to improve their experience.
- Event tracking – We’re not talking about social events, we’re talking about tracking website visitor actions. Similar to conversion tracking, event tracking is something that most site owners do not monitor. There are a lot of events taking place on your webpage; here are a few examples you should consider tracking:
- Track which banner ads visitors click on to leave your site and which advertisers they are visiting.
- If you have flash animation on your website, how many people opt to skip the animation.
- Track when visitors put items in a shopping cart or purchase items.
- Track visitor subscriptions to your RSS feed or newsletter.
- Track when people comment on your site and take note of the content they’re commenting on.
- Track when visitors click on the play button to watch a video.
- Track when visitors share content with others from your site or click your social share buttons.
- Track when you have new sign-ups or people registering for an account.
- Track how many times a visitor clicks on links that exit your site.
By including event tracking in your data, you can figure out what visitors are and are not doing on your website. This will help you determine which features you should focus on and which features you should consider removing.
- New versus returning visitors – this report will show you how many new people came to your website and how many people have been there before. Although not 100% accurate, a high number of new visitors implies that you’re successfully driving traffic to your website. As you engage in social media sites, you should see an increase in the number of new visitors.you will also want to monitor the returning visitors, as this metric implies that your site is satisfying their needs (a good thing).
- Referring sites – this report will tell you which websites sent you traffic. This is especially important as you engage in social media marketing, you’ll want to keep an eye on which platforms are performing best for you.
If you are participating heavily on a social site but do not see significant referral traffic try tweaking your content – you may not be properly targeting your audience. Another consideration, you’re trying to make content work on a social site that is off topic for that platform ( i.e. posting articles about baking on a heavily tech-based website like Digg).
- Alerts – Some analytical packages include an alert feature and others do not. This feature will aid the site owner in keeping an eye on things without having to remember every detail. The alert will notify you when things are going well and more importantly, when they are not.
- Keywords – This report will show you which keywords a site visitor used to arrive at your website. This is especially helpful as you might notice that the keywords you are targeting may not be the same keywords people are using to find your site.
Activity 2 – If you have a video on YouTube – check the stats. How many views does it have? How was it was discovered? Who are the visitors? And any other data to help you identify appropriate content for your audience.
Activity 3 – Go to Google Alerts and set up alerts for your brand and product names.
Activity 4 – If you have several social media profiles, consider using Klout to monitor your activities. You can watch how your social engagement influences your Klout score as you become more actively involved on social media.
The whole point of social media marketing is to build your brand and develop a loyal following. By implementing a few key measurement points, you can continually measure traffic, sales, conversions and optimize your efforts for maximum impact. Here’s an article by Entrepreneur Magazine – “How to Calculate Your ROI with Social Media.”
Third-party social monitoring services
Other monitoring services to consider: