Calculating ROI for Social Media Marketing
Requires Four Key Measurements
#1: Measuring Social Media Exposure
How many people could you have reached with your message?
In social media, this measurement is about as reliable as a print magazine’s circulation, but knowing your potential audience does have value because it represents your potential sales lead pool.
Unfortunately, as of the writing of this post, some of these metrics have to be accounted for manually, so you’ll have to balance the level of effort to track the metrics versus the value you’ll receive from them to determine their importance to your overall strategy.
A good example of where there can be unreliability in social measurement is when isolating unique users for each of your metrics. You want to avoid counting the same person twice in the list below, but realistically it’s difficult to do.
These measurements highlight the number of people you’ve attracted to your brand through social media. To mitigate the potential for duplication of users, track growth rate as a percentage of the aggregate totals. This is where you will find the real diamonds.
- Twitter: Look at your number of followers and the number of followers for those who retweeted your message to determine the monthly potential reach. You should track these separately and then compare the month-over-month growth rate of each of these metrics so you can determine where you’re seeing the most growth. A great free tool to use for Twitter measurement isTweetReach.
- Facebook: Track the total number of fans for your brand page. In addition, review the number of friends from those who became fans during a specified period of time or during a promotion and those who commented on or liked your posts to identify the potential monthly Facebook reach. Facebook Insights provides value here.
- YouTube: Measure the number of views for videos tied to a promotion or specific period of time, such as monthly, and the total number of subscribers.
- Blog: Measure the number of visitors who viewed the posts tied to the promotion or a specific period of time.
- Email: Take a look at how many people are on the distribution list and how many actually received the email.
Exposure is the top of the brand awareness funnel and represents your potential sales lead pool.
#2: Measuring Engagement
How many people actually did something with your message?
This is one of the most important measurements because it shows how many people actually cared enough about what you had to say to result in some kind of action.
Fortunately engagement is fairly easy to measure with simple tools such as Radian 6,Biz360 and TweetEffect. These metrics highlight who you want to target to retain on social media channels.
For a starting list of key performance indicators for engagement, this post by Chris Lake is a great start.
- Twitter: Quantify the number of times your links were clicked, your message was retweeted, and your hashtag was used and then look at how many people were responsible for the activity. You can also track @replies and direct messages if you can link them to campaign activity.
- Facebook: Determine the number of times your links were clicked and your messages were liked or commented on. Then break this down by how many people created this activity. You can also track wall posts and private messages if you can link them to activity that is directly tied to a specific social media campaign.
- YouTube: Assess the number of comments on your video, the number of times it was rated, the number of times it was shared and the number of new subscribers.
- Blog: Evaluate the number of comments, the number of subscribers generated and finally the number of times the posts were shared and “where” they were shared (i.e., Facebook, Twitter, email, etc.). Measure how many third-party blogs you commented on and the resulting referral traffic to your site.
- Email: Calculate how many people opened, clicked and shared your email. Include where the items were shared, similar to the point above. Also, keep track of the number of new subscriptions generated.
#3: Measuring Influence
This category gets into a bit of a soft space for measurement. Influence is a subjective metric that relies on your company’s perspective for definition. Basically, you want to look at whether the engagement metrics listed above are positive, neutral or negative in sentiment. In other words, did your campaign influence positive vibes toward the brand or did it create bad mojo?
You can also use automated tools like Twitalyzer,Social Mention, Radian 6 or ScoutLabs to make it a little easier, but ALWAYS do a manual check to validate any sentiment results. Influence is generally displayed as a percentage of positive, neutral and negative sentiment, which is then applied in relation to the engagement metrics and to the metrics for reach where applicable.
A great application for influence is to look at the influence by those who engaged with your brand in the above categories. Do you have a nice mix of big players with large audiences engaging with your brand, as well as the average Joe with a modest following?
If not, your influence pendulum may be about to tip over, because it’s important that you spend time engaging with both influential users and your average user.Note: many of the automated tools that track sentiment and influence are not free. And many times, you will need a combination of tools to measure all of the different social media channels.
#4: The Lead Generation Funnel
After you’ve measured through the influence portion of the funnel, you’re now creeping into where too many companies are starting their measurement efforts: the lead generation funnel. This is where the brand awareness portion of the funnel ends and the traditional ROI-driven action begins.
Exposure, influence and engagement represent brand awareness in the measurement funnel.
Understanding your reach, engagement and influence through these primary social channels will allow you to define your presence and impact, which can then be applied as a model to other social networks.
Now that you’ve tracked all of this information, how do you make it meaningful? Excel is a great tool to help organize your data. Build yourself a standard dashboard in Excel that highlights the key metrics that matter to the organization. Create a tab for a high-level overview of multiple campaigns, and a tab for each campaign for the time period you’re reporting on. Ultimately, you should put the information into the same format that you’ve used to report on traditional brand awareness campaigns, with social media as just another vehicle in the overall marketing mix.
If you’re looking for tools to use for tracking, this post by Mani Karthik at Daily Bloggr gives a nice view of options.
To really understand the importance of measurement, here’s a great post on social media measurement from Social Media Examiner: Is Social Media Marketing Measurable? The Big Debate.