Quick: Can you list the goals of each and every one of your social media efforts? Do you know how each campaign performed when measured against those metrics, and how they contributed to the bottom line?
If you’re like many marketers, those questions probably bring a quizzical look to your face. So much of social media is on the fly—a response rather than a plan—that it can become a slippery planning slope for companies, especially those that are understaffed. But it doesn’t have to be that way. In fact, setting goals is a key component of establishing a process to measure social media profitability.
There remains some debate about whether social media ROI can be measured. ROI skeptics point to several issues, among them:
- Social media is very poor at directly driving purchases, accounting for just 1% of ecommerce sales. And business social media use can’t just be an endless stream of promotion, regardless. Many sources recommend using formulas such as 60% curated content, 30% owned content, and 10% calls to action or direct promotions. It costs money to curate content, and it does provide value—in terms of building an audience and brand reputation. But the value of brand image and social media engagement is difficult to measure.
- Many of the activities driven by social media—newsletter signups, event attendance, hashtag use, report downloads—don’t have a direct dollar value. They need to have an estimated value assigned to them. It takes a fairly large data set to be able to estimate values with any accuracy, and even then, the average value tends to fluctuate over time.
- Participating in social media is no longer optional for most businesses, and hasn’t been for some time. No one bothers trying to measure the ROI of electricity, or indoor plumbing, or legal services, or paying taxes, because all of those things are simply necessary to doing business.
Those on the pro-ROI side, however, counter that social media is a channel for marketing and customer service. It has costs, which can be directly measured. And even if the value of some of its benefits have to be estimated, that’s no reason to not even try measuring the return. With nearly 60% of CMOs saying they face increasing pressure to demonstrate the ROI of marketing activities (and none reporting less pressure), it’s essential to try to evaluate the impact of social media marketing activities, even if the results aren’t perfectly precise.
So, to back up: Any review of social media must measure both investment gain and investment cost. That’s how return on investment works, of course. That means tracking any and all expenses, including employee time, against any money brought in by the efforts. Those are then reviewed against those goals that you set, but the goals of social media campaigns often look very different than other types of business goals.
For starters, you might just want to grow an email list. You might want to persuade people to download a PDF. All are significant measures but must be reviewed differently than a simple sale. There are also measures of success that are unique only to social media. For example, one article posted on a blog may garner an expansive number of re-posts—helping you to meet your goal of generating conversation about your brand.
After you have all that data, you must then move to using analytics in order to track it. There are other nuances and steps that you’ll want to take too, as this infographic from Salesforce Marketing Cloud details.