If you’re not measuring your social media marketing returns, you’re not alone. According to a recent survey by Tata Consultancy Services, 44% of companies surveyed reported that they do not have mechanisms in place to measure the impact of their social media efforts. By comparison, about 18% reported negative returns on their social media investments, while 38% saw positive returns.
Unlike some more traditional marketing channels that lend themselves to relatively concrete cost-benefit analyses, social media comes with a host of unknowns and gray areas, making a direct assessment of this sort virtually impossible.
While you may not be able to calculate an exact ROI, this doesn’t mean you can’t quantify the results and measure the impact of your social media campaigns. Yes, you’ll have to accept a certain level of murkiness; you’ll depend on estimates and imperfect comparisons, and some benefits will probably be intangible and/or overlap with other benefits. Despite this level of uncertainty, you can still create a framework to develop an informed picture of your social media marketing returns.
Using Objectives to Define Metrics
The first step in measuring your social media results is to pinpoint which metrics are most important. As with any marketing channel, the metrics should ultimately be determined by your broader business objectives.
If this foundational work hasn’t already been done, take the time to go through the process. Here’s a quick guide to get you started:
After doing this groundwork, you might develop a framework like this:
Now, with the best corresponding metrics assigned to your top Key Performance Indicators (KPI’s), you’ll have a much clearer path to determining the tactical benefits of your social media marketing.
Assigning Value to Social Media Benefits
Determining the right metrics to gauge is one thing; computing the value of these metrics is another. How you do this will largely be contingent upon your business model and your broader social media goals.
Here’s an example. You own a taco truck, and you rely exclusively on Twitter to broadcast your location to customers. In this case, your goal with social media is primarily to sell more tacos. With a fairly direct relationship between your Twitter activity and your sales numbers, you have a clear framework to judge whether this channel is working to hit your goals or whether it’s coming up short.
On the other end of the spectrum are businesses using social media purely as a branding and visibility channel. If your business falls into this category, you may not have any direct response call to action or a direct connection to sales; instead, you’re looking for targeted reach, frequency, impressions and engagement.
In this case, while there is no taco sales goal to use as a benchmark for success, you still want a frame of reference to make sure you’re not wasting money. To assign a ballpark value to social media visibility, consider what you’d have to pay in advertising costs to achieve the same result. Your social media analytics will tell you the reach, frequency and (if applicable) clicks you’re achieving within your market. Let’s say your social media activity for the month is generating 100,000 impressions. If you take an average CPM rate for display ads in your industry – let’s say that’s $7 CPM – you can calculate that:
100,000 social impressions / $7CPM = $700 display ad spend (roughly)
Given your social media expenses, are you over or underperforming when judged against a comparable ad spend? (This is not to say that social media visibility is equivalent to visibility gained through advertising, but this provides a good basis for comparison.)
For many businesses, social media is used both for visibilityandlead/sales generation – in which case there is a mix of metrics that need to be weighed according to the priority of the goals. If it sounds like a lot of work, it can be – especially if you have a diverse set of goals and several active channels. But, by doing the upfront work and starting with clear goals, identifying the most important metrics for success and tracking results, you won’t be in the dark about the impact of your social media marketing.
Charlie is the Chief Strategy Officer at Simple Machines Marketing. When he's not doing the marketing, he likes playing guitar, hanging with his family in Chicago and lots of other stuff too but this seems like a good amount for a blog bio.