Are you tracking social media ROI? If so, you’re part of a small minority. Currently, there’s a lot of talk about social media ROI and monitoring, which by itself is an indicator that social media marketing is maturing. That doesn’t necessarily translate to action, however, since there’s a lot of confusion around what to track and how to track it.
While social media ROI attracts a lot of discussion and stands for fancy names like return on interaction, the reality is that only one out of three companies tracks social media ROI after three years! Even more surprising, social media ROI is one of the five indicators of social media adoption according to SmartBrief Inc. and Summus Limited’s “2010 State of Social Media for Business.”
Problems Measuring Social Media ROI
Here are three reasons that explain the difficulty in tracking and calculating social media ROI.
- Social media starts as a small test on the side. Unlike other components of the marketing mix, social media marketing is something we’ll try because it’s cheap. As a result, it doesn’t have a strategy and the related metrics to track. Later, when data is needed, analysts may not have optimal information.
- Social media interaction tends to happen outside of the purchase process, either before or after. This doesn’t mean that social media’s contribution doesn’t yield a return, but rather that it’s not tracked and incorporated into the firm’s ongoing metrics.
- Social media leverages corporate resources that are already accounted for in other ways. At least in the short term, social media marketing appears to be “free.”
Given these internal challenges for tracking social media ROI, it makes sense to use other metrics to monitor your social media campaign’s performance.
5 Social Media Metrics That Matter
From a business perspective, what’s important, at least in the short term, is showing that your social media marketing is effective at achieving your business goals. Therefore, establish goals for your social media marketing and related metrics that can effectively track your progress and allow you to tweak your social media campaign to improve its effectiveness. To that end, these five social media metrics are useful and relatively easy to integrate into your existing marketing tracking.
- Reach. We’re talking about the people who see and potentially can interact with your content, message, product, and/or staff. Given social media’s traffic and time spent, it’s important for marketers to have a presence there to expand their audience. Further, social media provides ways to disperse your message efficiently. Among the specific metrics to monitor are visitors, fans, followers, social graph of these people, influence of these people, and time spent. While longer term, it’s critical to do more than just count the number of people, initially it’s good to start with these numbers, like with initial impressions in traditional advertising.
- Branding. As social media continues to evolve, so do the ways that companies use social media marketing to build, support, and expand their brand. Through its ability to engage with prospects and customers and provide a wide variety of content in different formats, social media marketing supports and enhances a broad range of branding and intent to purchase metrics. It’s been used by high profile, expensive campaigns like Old Spice to low budget ones like Orabrush.
- Actions. What do you want your prospects, customers, and/or the public to do? Have you included a call-to-action targeted to those actions and a related, trackable promotion code? Bear in mind that these actions don’t necessarily have to be sales. Get prospects to take the next step towards purchase. Don’t overlook other social media related actions such as link sharing and bookmarking. These shared items translate to earned media impressions.
- Costs. Expenses for social media marketing, especially early in the adoption phase, can be difficult to assess especially if it’s handled by existing staff who don’t track their time and/or use existing resources that are closely integrated with other expenses. For example, your advertising agency does additional work but its cost is included in the television ad creation bill.
- Reputation issues avoided. In today’s real-time, 24/7 communications world where everyone’s a potential publisher, it’s critical to have some form of social media monitoring in place to send an alert when and wherever appropriate engagement may be necessary to avert a larger public issue. Social media provides the mechanism for quick response without the need for crisis management. Having an established social media presence provides the opportunity to minimize potential issues. Consider social media marketing a cost avoidance to preserve your reputation and brand.
While revenues may not be trackable in the early phases of your firm’s social media marketing, and the costs may be integrated into your overall marketing budget, as your social media marketing initiatives grow and require more resources, both financial and human, so will your need to track them and develop a social media ROI.
What are your views on social media ROI and which other social media metrics matter for your business? Please share your perspectives in the comment section below.
Heidi is off today. This column was originally published on April 18, 2011 on ClickZ.