Social media marketing ROI (return on investment) is one of the most challenging issues for marketers. even though social media isn’t new, it offers up challenges. For example consider the following statements.
A recent study analyzing social media’s contributions to this Black Friday reveals that 0% of sales came directly from Twitter and 0.68% directly from Facebook. As the study shows, millions of fans and followers and thousands of likes and retweets had no magic impact on sales! (Image credit: Flickr)
A survey from a French social media agency, Isobar, explains that 74% of fans do not believe being a fan influences purchasing behavior at all.
Now given the pressure to correlate dollar spend on marketing with profit earned via sales, businesses, especially small businesses find it hard to justify spending time, money and resources on social media marketing.
Lauren Dugan talking on social medial marketing ROI based on a study by Awareness says –
The number one challenge that marketers face on social media is measuring ROI, or return on investment. A full 57 percent of the 469 marketers surveyed say they cannot find appropriate measures to judge how successful their social media campaigns are.
96 percent of those surveyed use social presence – or the sheer number of followers and fans an account has – as their top measurement for success. But they’re not just focusing on the numbers: 78 percent are looking for better customer engagement as their top business objective.
Half of those surveyed would like tighter integration between their social media efforts and the rest of their marketing outposts, such as TV, radio and print. And Twitter dominates 84 percent – just behind Facebook’s 89 percent – of brand usage.
You can check out the infographic below for more details on social media marketing ROI challenges.
Part of the problem lies in the perception that social media marketing is being viewed in terms of a quick campaign, like a 2-3 week advertising or cold-calling campaign. However social media marketing cannot just be viewed in linear media terms. Social media is bi-directional and the internet has a permanent record of all that’s put online. So businesses can not just use it for marketing but also for gathering market intelligence, building their brand, enhancing and managing their reputation, efficiently manage customer service, and find new sales leads, amongst other uses!
So what are the best ways to measure social media marketing ROI. Here are some measures –
1. Awareness
Do more people know about you than before?
Measure brand mentions and reviews
2. Reach
Is there an increase in the number of people hearing your message?
Measure fan or follower growth per reporting period.
3. Traffic
Are your posts generating traffic?
Measure traffic to site and leads generated or nurtured through social media.
4. Engagement
Are people reacting to your content?
Measure CTR, tweets, retweets, comments on posts etc
5. Intelligence
What feedback are people giving you about your content, brand, products and or services?
Measure volume of questions, product/service suggestions fielded and implemented druing the reporting period. Also measure positive and negative sentiment mentions.
6. Conversion
Are people either buying, referring others or opting into channels you control?
Measure conversion of fans and followers into op-in channels that you control eg: email, SMS, website and direct mail. Also measure one on one conversations with fans across social media and other channels.
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