Marketers know both the importance of Return on Investment (ROI) and a well-executed social media plan. But when it comes to social media ROI, how do you calculate the return on all of your efforts?
Setting specific outcomes and proving the value to your organization by showing measurable results can be achieved with a bit of critical thinking and planning.
If your B2B organization is new to social media, it may be difficult to come up with a measurable goal for each metric or channel. However, tracking your results over time and frequently reviewing your key performance indicators will not only allow you to set your goals, it will make them more meaningful and illuminate how well your strategy is or isn’t working.
To help alleviate some of the burden of figuring out social media performance measurement, continue reading to learn about key metrics you’ll want to consider in evaluating your social media ROI.
First Things First – Establish Your Social Media Goals
Social media strategy and the metrics that support it should be based on two factors – your organizational goals and the outcomes you want your social efforts to bring about. When your social media goals are closely aligned with your organization’s business goals (e.g., increased awareness, revenue, etc.) it will be easier to gain support and prove the value for your social strategy across your organization.
Strong social media goals, like all good goals, are S.M.A.R.T.: specific, measurable, achievable, relevant and timely. For example, you want to increase your social media leads, but by how much? By what date? And precisely how will you use this to help your bottom line?
Let’s say one goal is to increase combined traffic to your website from Facebook and Twitter by 5% to drive more email list subscriptions; take a look at click-through, bounce and traffic-to-conversion rates for each platform.
Use the Right Tools for Social Media Measurement
In addition to reports and tools provided by most of the major social media platforms, there are a variety of other analytical tools that can streamline and improve your measurement efforts. Tools such as Google Analytics, Hootsuite, TweetReach, Klout are among the many widely-used among marketers.
Leverage these tools for a deeper understanding of the visitor journey coming from your social media efforts and which specific actions are driving them. You can then share the insights that matter with other stakeholders and continue to strengthen your approach.
Your analytics account will give you information on the volume of traffic originating from social sources. You can compare the dates on your analytics account to those of your social media postings and analyze what pages they visit, how long they stay and what type of postings are resonating.
Calculating ROI on Organic Social Media Efforts
Organic social media activity typically takes the form of publishing or posting across your respective social media channels to elicit engagement. Here, you’ll want to measure and evaluate your activity in terms of frequency and type (e.g., number of posts by channel over time) to get a sense of whether you’re doing the right things to achieve your objectives. Common B2B objectives for organic social media efforts include:
- Increasing the number of followers to your company’s channels
- Increasing traffic to your website from social channels
- Generating qualified leads that originate from social efforts
- Determining what content is resonating most with your audiences
From a measurement standpoint, you can get a read on these items by tracking follower count trends, analyzing and documenting traffic sources to your website, reviewing lead sources and highlight which content or topics are receiving the highest levels of engagement. Charting all of this on a social media dashboard is a great practice to follow.
Calculating ROI for your Paid Social Media Efforts
Calculating ROI for your paid social ads differs from ROI from organic postings and engagement. Paid social ads are tied to a monetary cost and are typically used to drive certain actions (e.g., a white paper download).
You can figure out the specific ROI for each social network by allocating a value to specific goals you have in place. These goals can include cost per lead, cost per conversion or cost per action. After looking at the numbers, you’ll be able to decide which social platforms are doing the best for your organization, and zero in on those.
For any social networks or campaigns that are bringing in a negative ROI, you can either try to adjust by spending less, or by making your campaigns more effective.
Certain actions can help determine which conversion events can be directly attributed to social media. To calculate the social media profit, you should include actions, such as:
- Downloads (white papers, case studies, eBooks, industry reports, etc.)
- Email list signups
- Demo/webinar registrations
- Event registrations
When calculating social media cost, you should include expenditures, such as:
- Content creation
- Technology (email platforms, website coding, etc.)
- Other resources
Consider Other Ways Social Media Adds Value
Value isn’t always measured in dollars and not every organization will be able to attribute revenue directly to social media.
Narrowing social media ROI to only a defined objective prevents you from identifying the many other ways your investment could be paying off. For instance, if your goal is to drive brand awareness, you would measure success against metrics such as social reach, awareness, influence and engagement data versus profit.
Some questions to ask can include:
- What kinds of things did your target audience do after exposure to your campaign?
- Did these actions align with your goals?
- What were the successes?
The key takeaway, regardless of how your company chooses to measure engagement, is that you have a success metric in mind before you begin. Without some sort of benchmark, it’s impossible to determine your ROI.