The ROI of Social Media
on October 31st, 2011 at 10:20 am
Measuring ROI for Social Media is a real challenge. Various factors that follow the following ROI equation:
ROI= [(Amount Gained from Investment – Cost of Investment)/Cost of Investment] x 100
Business Social engagement, the process of engaging users to convert them to customers involves numerous activities, including befriending, following, liking various social channels, including posting, comments, emails, invitations, etc. It is hard to quantify all these aspects of social media over a large breadth of social channels (facebook, twitter, youtube, flicker, etc). Facebook has a useful tool to help you quantify your business page’s impact in this social circle called insights (http://www.facebook.com/insights/?sk=po_
There are many variable that can effect the performance of any online marketing campaign, including social media ones. Having a solid website with good traffic (good content and SEO), easy to use navigation (good usability and low bounce rates), web forms (with tracking and easy to use/fill out), and other basic web aspects.
There are specific things your can do to help your quantification, which is simply applying advanced SEO practices applied to specific social channels. Choose a social channel, like twitter, decide on what message/theme/promotion your are going to use this channel for and create a specific landing page catered to this message and a conversion goal (acquire an email, sell a product/service, subscribe to a blog, etc). Every time you tweet your a variation of your message, include the landing page’s URL (usually in shortened form). Track the traffic going to this specific URL and the resultant page (thank you page, etc). There are several free tools to do this, Google Analytics is one. Plan and run this campaign for an extended period (2 to 4 weeks at least) to get enough data on it’s performance. Granted, you have to have a good flow of traffic going to your channels for this to be effective. Measure and quantify the conversions compared to your time creating the tweet messages, landing page, and other setup costs, then apply these numbers into your ROI equation. One of our recent clients had this ROI for a similar facebook campaign WebPaws.com ran for them (includes messages, landing page and analytics):
ROI = [($7,350 – $2,000)/$2,000] x 100 = 276%
What is gained by implementing a social media campaign? Using the big picture, look at increased sales, customers, visits, brand recognition, quotes, opportunity creation, new customers, etc. as what may have been gained. These can be measured indirectly by setting up a timeline of one or several metrics (revenue, new customers, visitors, etc) from the time you started to use social media in your marketing efforts; include several months prior and several months after your social media implementation. Then map onto this timeline the various social media activities in which you’ve been participating, as well as the results that your company has experienced since implementing its social media strategy. This will show the overall impact social media has had, and whether or not it has helped you increase your goals over the baseline. Contact WebPaws.com for more help or information on getting your social media channels working for your business.
ROI in Social Media
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