Last week at the Search Engine Strategies (SES) conference in London, we’ve been listening to many sessions about social media, its performance and its influence on other digital marketing channels such as SEO or SEM. The question of how to measure or quantify the performance of social media campaigns showed up often. According to a study from Mzinga and Babson, only 16% of all marketers measure the ROI of their social media campaigns. The reason for that is simple: there are only a few, but mostly complex concepts that measure the ROI on social media. This blogpost shares some insights on how a concept to measure the ROI on social media could look like.
When setting up a social media campaign, the numbers of Likes, +1’s or Mentions are often considered as the key performance indicators (KPI) that decide whether a campaign was successful or not. By doing so, both marketers and clients often forget to set up an overall strategy of their social media campaigns. More complex analysis refers to an attribution modelling tool to measure the influence of social media campaigns on sales. But we have to bear in mind that there are other factors such as brand awareness, consumer loyalty or trust, which are difficult to measure and are also being influenced by social media campaigns.
So what to do?
A goal-based approach to measure your social marketing ROI will help you to better understand the performance of your social media initiatives. As Krista La Riviere, CoFounder & CEO of gShift Labs described in her presentation, one should always be aware of the impact of the social media efforts throughout the entire web presence in the short and longer run, measure what sales can be attributed to social media and know the source that led to the conversion. So it’s essential that you try to see the whole picture of your activities and to follow an ongoing social strategy. How such a goal-based approach could look like was recently described by Angie Schottmuller in a blogpost on Search Engine Watch. She uses a «Who», «Why», «What», «How» model that contains seven steps to measure your ROI :
- Select Scope: Who will use Social Media in your business?
- Gather Scope's Business Goals: What’s the goal of each business?
- Define Social Media Purpose: What’s the mission to reach the goal of each business?
- Define Social Media Goals: Set specific goals for each social media channel
- Define 1-2 KPIs for Each Goal: How can we measure the success of our goals?
- Choose Tactics for Each Goal: How will we accomplish our goals?
- Define Metrics for Each Tactic: How will we measure tactic success?
In her follow-up blogpost she also defined 14 formulas that can measure the benefit of each tactic. By following this model, marketers will have a good chance to calculate the value of their social media activities properly.
As social media is constantly growing and gaining importance, the need for an exact measurement of your ROI is greater than ever. This will not only help you to find out which of your social media channels performs best, but also to compare the overall performance of your social media channels with your other marketing channels. It’s not surprising that at this years conference many sessions have focused on the performance of a single social media channel. At the same it also shows that an all-embracing model is still not widely used and needs further clarification.