3 Effective Ways To Measure Social Media ROI
One of the biggest counter-arguments to social media has always been “What’s the ROI?” After all, does it really make sense to spend time, money and other resources on something whose results can’t actually be tracked?
Though a lot of different metrics have come and gone in the social media world, there’s still no definitive way to measure the return on investment in the social sphere.
So is social media worth the investment? The key thing to remember is that social media really isn’t a ROI-based activity. Here are a few things to keep in mind when you’re trying to decide whether or not social media is a good investment for you.
#1: You’re Beginning a Relationship
It’s extremely difficult, in large part due to how difficult it is to quantify relationships. Someone you meet at the party could introduce you to a new friend, who 6 months later refers you to a big client. If you had never gone to the party you wouldn’t have met this person, but it’s very hard to quantify that client as a “return” on your investment in going to the party.
Social media is very similar. It help you create and cultivate social relationship, which can have a domino effect that can’t always be measured.
#2: Learn From Your Customers
If you were just running TV ads, you’d get the same branding effect, but you wouldn’t get to hear back from your customers about how you’re performing. You won’t get to hear suggestions about how to improve your product or get early warnings of potential problems.
Social media is one of the purest ways you can stay in touch with you customers. It’s just not realistic for most businesses to stay in one-on-one contact with their customers; but through social media you can easily stay in touch with a lot of people at once.
#3: Social Media is Branding, Not Response
Let’s say you decide to run a new TV ad campaign for 6 months. TV ads do need to run for a long time before they begin to take effect; as you need to make sure it saturates your target market and give the branding message time to sink in.
Within those 6 months, any number of things could change. The economy could tank or take off, news relating to your company could be good or bad, a competitor could launch a new product or go out of business, so on and so forth.
While you can easily track a correlation between a TV ad campaign and sales, it’s hard to track causation.
It’s the same with social media. Social media doesn’t result in direct sales. Instead, it changes the way your viewers see your brand.
If someone has a relationship with you on a social media website, they’re a lot more likely to want to buy from you or visit your website again in the future. Much like TV is difficult to track, social media is also difficult to track because there’s no way to tie customers directly to sales results.
Tracking Social Media ROI
In summary, how can you track social media ROI? You have to use indirect metrics.
Using metrics like how long visitors stay on your site, how often they pass on your content, how engaged your customers are and how many replies you get when you post a piece of content, you can get a rough gauge of how your campaign is performing.
That, when combined with the total impressions your media generates, can help you get a rough sense of what kind of returns you’re generating.
Tracking social media ROI isn’t an exact science. There are many ways it can benefit your company that can’t be measured. However, by and large, the consensus is that investing in social media makes sense. That’s why it’s such a hot topic today in the world of business.