How can we measure Return on Investment’ (ROI) on our participation in social media?
19th October 2009
Now that marketing on the social web is becoming more widespread – with marketers planning to spend more of the marketing budget in this area in 2010 - our need to illustrate the Return on Investement (ROI) will inevitably become more and more important.
The crucial question being: Have we received more donations or more sales from our activity in social media?
Currently there seems to be no definitive consensus on what we should be measuring and how, with a recent survey by Mzinga and Babson Executive Education reporting 84% of respondents don’t currently measure the ROI of their social media programs. Today i'm going to explore some of the possible metrics we can use and what they can actually tell us.
What do the numbers tell us? This is how we measure our email and direct marketing campaigns - Website visits; click throughs on emails; flyer responses. So what are our quantitative indicators in social media?
1. Increased reach and ‘brand’ awareness
Examples include – Number of ‘followers’ on Twitter, number of ‘fans’ and friends’ on Facebook or number of links shared or made popular on Delicious.
This is measuring at the basic level. “In 6 months of using social media we have increased our following from 50 to 1,000 followers” you may report. But what does this actually tell us? Not a lot really.
‘So what’ if we have 1,000 people following us on Twitter. This is like reporting we have 20,000 people on our email list. (What’s important when we send out an email is the number of people opening that email, clicking through to the landing pages and taking action. And this should go for our activity in social media also.)
Yes strive to attract more fans and followers but this shouldn’t be the main driver or indicator for our activity in Social media. It’s the ‘quality’ of the audience that matters, rather than just the numbers.
Website traffic
So you have your fans, friends and followers. How do you measure the ‘value’ of your follower network and whether you yourself are offering value to them?
- Use URL shortlinks such as bit.ly and tweetburner to measure the click through from your ‘tweets’ and links you have added on other websites.
- Set up a Google analytics account and track how many people are visiting your website from platforms such as Twitter, Facebook and LinkedIn – and importantly if they visit from these links where do then go? If your bounce rate is very high either your message may have misled or your landing page isn’t working for you.
- If you have an RSS feed on your website use Feedburner to analyse how many subscribers you get.
Using the above tools will give you a good indicator of the traffic you are getting from your social media platforms. In addition distributing a voucher or special discount code via a social network and monitoring its use can show campaign success.
The above metrics though are still ‘push marketing’ metrics.
After all if the reason we are participating in Social media is to: join in the conversation; to engage; to manage our reputation online - shouldn’t these be the metrics we are measuring?
Should we therefore be measuring our return on engagement (R.O.E)?
In order to measure our engagement perhaps the following metrics will help...
2. Improving customer and donor engagement
Do our followers and fans respond positively? Do they value and like our content?
- How many of our followers ‘retweet’ our messages on Twitter? (Find out by using tweetreach or twitteranalyzer and discover your unique reach for every message you tweet)
- How many @replies do you get?
- How many ‘like’ and ‘comments’ do you get on Facebook and on your own website?
All the above can you give you a good feel for how you are being received and the impact you are having from your participation.
However care needs to be taken here and consideration given to the ‘silent majority’— for every one person that comments another 99 may never comment. Don’t assume that just because some people are not responding to you that they are not engaged. They may just be engaging with you in a different way.
Another reason for participating in social media and therefore an aspect we should measure is…
3. Organisation and brand reputation.
What are people saying about your brand and organisation? Is it positive or negative?
Using Social Mention (addictomatic is also worth a look) you can search on your brand name and filter the results by selecting blogs, micro blogs, bookmark sites, comments, news, images or videos. Measure your reputation at the start (or at the start of your KPI reporting) and then measure it again 6-12 months later. Has your reputation improved, do you have more positive comments? If it has your social media exploits can be viewed as a success - in the short term. The challenge will be to maintain your reputation, maintain your reach and maintain your engagement in the long term. This is when your ‘real return’ on investment and on engaging will be realised.
On the other hand - Perhaps we shouldn’t tie ourselves in knots and obsess too much about specific measures? Perhaps participation in social media should just been viewed as a relationship building tool which aids acquisition and retention?
But if you want your participation in social media to be a long term success and not just a short term fad, you will need total organisational and management buy-in. And illustrating your ROI will be critical to achieving this.
4 So what’s the answer?
Well set out from the start why you and your organisation want to participate in social media. Is to raise awareness? Is to improve engagement? Is to manage your reputation and provide a customer a service? Is it all of these?
Once you have set out your objectives you will be able to put the correct indicators in place and offer some insight and measurement on your ROI and ROE to illustrate the value of your organisation participating in Social media
What do you measure? I’ll be interested in hearing in your thoughts. (Simply login and post your comments underneath this post.)
Want to learn more? We are holding a social media workshop where Steve Bridger and Euan Semple will provide you with a comprehensive introduction to social media and web 2.0 technologies, helping you plan your own social media journey. Book your place now
Read my other blog posts on...
Is participating in social media of value to organisations?
How to get the most out of online communities and social networks
