How do marketers begin to measure ROI in social media? After all, likes, follows, and repins are not among our usual business KPIs. At the same time, the standard business metrics we typically use to gauge digital success don't apply easily to social media; ROI can't be measured in clicks and impressions in this realm. It's still early days for social, and we haven't yet discovered a silver bullet to solve the measurement conundrum.
That said, I do think that there are a few metrics that marketers should pay close attention to in order to gauge whether their efforts and initiatives in social are moving the needle for their brands.
As you look to start building your case for marketing dollars, consider the following metrics and related critical questions:
Clearly, social ROI is far more complex than a simple cost vs. brand lift equation. Social just doesn't fit the current marketing funnel, so we need to stop trying to cram it in there. It's a square peg/round hole scenario. While social certainly can affect the funnel or customer journey (whichever model you subscribe to), it can't be superimposed over it. There are just too many touchpoints in too many places, and too many variables to limit social to one fixed point or another along the customer's path.
The ROI of social media is really delayed ROI. I know that's tough for a lot of marketers to swallow, but again, it goes back to the marketing funnel. It's not just another advertising channel; it's a critical part of a company's overall communications platform, CRM solution, and research and development efforts. It goes way beyond marketing, touching multiple departments and roles within an organization, from customer support retweets all the way up to the CEO's blog posts.
So, when it comes to social, marketers need to stop being hyper-focused on the immediate ROI question (I know, it's hard!) and instead get management teams focused on another question: What have I learned today from my customers?
Silver Bullet image on home page via Shutterstock.
This column was originally published on Oct. 31, 2012.
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Dilip is CEO and co-founder of Compass Labs. He previously led Google's mobile ads business and ran PayPal's risk and fraud management, financial services, and compliance. Dilip has co-founded and led two successful start-up companies -CashEdge and CommerceSoft - after stints at McKinsey and Goldman Sachs. Dilip has an MBA from the Harvard Business School, M.S. in electrical engineering from Rice University, and a B.Tech in electrical engineering from the Indian Institute of Technology, Madras.
March 19, 2014