“Well, how are you going to prove the ROI of social?”
If I had a dollar for every time someone asked me this... The fact is, anyone working in social media - heck, working anywhere in modern marketing today - is trying to do this. The good news is: we have a pretty good handle on it. The bad news: it’s not a perfect science and we still can’t track to the level of detail that will tell you exactly how much money one Instagram image made you. I wish… But as I said, there is a lot we can do. And I’ll tell you, it’s certainly a lot more information than we used to get with traditional advertising. So let’s walk through it.
We’re going to use three companies as examples for the purposes of this content.
Company A: B2C company selling consumer products mostly online to a wide target market at $50
Company B: B2B company selling software to enterprise companies starting at $15,000/year
Company C: A small publishing company that works with 20-30 writers per year with an average deal around $30,000.
The first thing we need to define, before we can define what metrics matter, is what our objectives are. That’s going to be key to knowing what you should be tracking. Every brand is going to have slightly different objectives for investing in social media. And any good strategy will be sure to define these up front as they will influence the content, the platforms and the metrics selected. Let’s look at a few and which companies would select which ones.
"Every brand is unique (or should be at least). So too should be the way in which a brand invests in social media, as well as the motivation behind that investment. For you to determine your ROI, you must know exactly what you wanted to achieve by leveraging social media. Define your goals early and as specifically as possible - it will provide for better clarity as data piles up." - Katie Burkhart, Brand Storyteller www.kburkhart.com
Now you may say: “Well hold up - don’t they all want to sell their product or service?” Well yes, they do. But is it at all realistic to think that social media is going to accomplish that on its own? For some companies - it is. It’s reasonable to think that, with Company A, someone might see a Facebook ad for their product, click through the site and order online. After all, it’s just $50 and they don’t have to check with anyone else about putting that in their room. But it’s a lot less likely to see an online conversion happening immediately following a tweet for Company B, where sales cycles usually take 12+ touchpoints, involve up to 5 stakeholders and cost upwards of $15k. You see?
“Social media acts as an accelerant to buzz-building initiatives - increasing the lifetime engagement of a piece of original content, drawing more eyes to news coverage, or promoting an upcoming speaking engagement. And, the effects are compounding - social often acts as an authoritative spokesperson for a brand in its own way, leading to future opportunities and improving the result of any investment made in PR or content marketing.” - Katie Martell, On-Demand Marketer www.katie-martell.com
Simply put: how many followers you have.
One of the keys to success in social media is getting your audience to grow. You’re not going to see great results if you’re only speaking to the same 50 people, tweet after tweet. There are ways to accelerate your audience growth with a little investment, ensuring that you are targeting the right people who (you hope) want to hear from you. (i.e. Facebook advertising makes it very easy!) And with that, you need to ensure you’ve got a strong, branded presence, and some great content on your platforms so people think you’re worth following.
Setting benchmarks for how much or how fast you should be growing is challenging, as different brands and industries see different results, but a good aim is for about 400-500 new followers each month. (If this isn’t happening for you, reach out to us and see if we can help.)
How many likes, retweets, impressions, double taps, link clicks, comments or video views you get on your content.
Engagement is a pretty all encompassing metric, but essentially what it tells you is whether or not your followers like your content. Which is of course, the aim of the game, so it’s important to track this. Now there can be arguments made for which types of engagement are most valuable, but again, this is going to depend a little on your objectives. The one thing I will say is that a like is more valuable than a view, and a retweet is more valuable than a like. Link clicks are also pretty powerful - but more on that in the next section.
"One return I often hear is audience growth. While growth is good, engagement is critical. If no one is engaging with your content, it's likely you've become another scroll-by and will miss out on any ROI you've defined.
Insight into your audience comes as an embedded return. The content your audience chooses to engage with will undoubtedly illuminate not only your content strategy, but perhaps other aspects of your brand. Make sure you're balancing the growth of your follower count with how engaged they are with what you're saying. Otherwise, your follower count might as well be zero because your content isn't connecting." - Katie Burkhart, Brand Storyteller www.kburkhart.com
In order for you to know your social media strategy is working, both Growth & Engagement to be climbing at a steady rate. If you notice they’re not, that tells you one of two things is off:
Either you’re targeting the wrong audience so while they’re following, they don’t care about what you have to say; or
Your content sucks and isn’t speaking to your market
And there’s no way to know which one it is without shaking things up a little bit and watching the results. Trial and error. Simple as that.
There are many different ways to define conversions in terms of social media. Many will say that conversions are simply classified as closing a deal. Making a sale. But while that works great for those B2C companies with the lower priced products, it’s not realistic to expect a tweet, or a Facebook video to close a 15k deal that involves many stakeholders in a business. We always track conversions with all of our clients, but here are a few different ways we define them.
Website Traffic: This is a metric we always track. Basically we look at it like it’s social media’s job to get them to the website (moving them further down the funnel) but after that, it’s the website’s job to move them along from there - whether that be to get them to complete a lead form, request a demo, talk to an SDR on live chat or even just to educate them a little further and then perhaps serve up retargeting ads.
We use Google Analytics to find out which social media networks our website traffic is coming from, and you can even track more details from there like what pages they visited and how long they stayed on the site.
Website Conversions: Google Analytics allows you to define a conversion within your site. This is done by defining a particular page as the “conversion goal” and so any time a user hits this page, a conversion is logged. For Company A, this would be the “Thank You For Purchasing” page. So at any time (we report on this monthly), you can see how many conversions originated from which social media platforms.
Leads: The other way to track conversions is far less automated, but works great for brands who deal with less customers overall - like a business coach or a publisher. They’re looking to build meaningful relationships with leads and need to form a very personal, not automated, connection fairly quickly in the sales cycle. With the lower volume of leads, it’s easy to manually track when they show up via a LinkedIn comment, a response to a tweet, or a direct message on Instagram. We simply tally these up and track them so we can all see the results!
Other Metrics That Are Interesting To Track...
Competition: How do you stack up against your competitors? This is an interesting metric and keeps you focused on where your benchmarks should be. While we all want as many followers as Starbucks, that may or may not be a reasonable goal for you.
Brand Sentiment: This generally takes a fairly sophisticated analytics tool, but if you can get this info, and if your brand is talked about enough in the digital world, then it’s valuable to measure the overall sentiment that people have when mentioning you. Is it mostly negative? Are they complaining about your products or customer service? Or are they professing love for you from the rooftops? It’s a good meter to see how your business is doing.
“So for me when tracking social ROI, it’s about quality not quantity. Not all likes and retweets and clicks are created equally. Some are better qualified than others. Some have a higher likelihood to convert. Some represent higher value prospects. Once you stop treating engagement equally and start optimizing to increase those higher value engagements, then you can achieve meaningful ROI.” - Doug Fox, President, Brand Fox
The bottom line is attempting to quantify ROI is difficult, but we do have some valuable metrics to help! From the beginning of time, marketers have been investing in brand awareness. Think about billboards and bus advertising. What metrics did we get from that? It’s always a bit of a crap shoot when you’re trying to prove ROI. But that doesn’t mean we should stop trying. Marketers, and businesses, need to find a healthy balance between trusting what they know works and measuring what they’re able to, to make smart investment decisions.
“As social media provides brands with a platform for engagement and education to qualified audiences, it also provides the perfect medium for customer acquisition and list building. Advancing the social conversation by asking for an email address provides the means for a personalized, tailored customer experience.
Email marketing, the reigning king of the marketing portfolio, generates $44 in revenue for each dollar spent. Each of the followers raising their hand to hear from you from social has, attached to them, a potential stream of transactions and lifetime value that can be measured and attributed to the acquiring social channel.
The best aspects of social media can be leveraged to generate measurable volume growth by providing a qualified, identifiable audience for your goods and services.” - Scott Miller, Strategic Marketing Operations Consultant, www.scottmiller.co