It's a touchy topic for anyone involved in social media marketing at the moment and it's the acronym that's brandished around the board room like a pair of tight shoes no one wants to wear - our old nemesis - ROI. Let's put those tight shoes back in their box...
First however, lets start with 4 unforgettable stats to fire us up before we look to prove our social ROI.
Most of us - Social Networking Sites Reach 60% Of Global Internet Users
spend social time - Social media accounts for 22.5 % of Americans time spend online.
with brands online - 53% of active adult social networkers follow a brand
then share offline - Active social media users are influential offline
Source: Neilson social media report Q3 2011
Now lets get back to tackling ROI
There's no point avoiding it. It's not going away anytime soon and it will always be a stumbling block for increasing budget and business confidence. In fact lets face it, it's a fair point, digital advertising has been carrying the mantle of accountability for years.
CPC, CPM, CPA, responsive analytics packages have been compounded by the recent years of global financial crisis, leaving digital holding the 'measured for every penny' card. So as social media exploded into the marketing mix, it's easy to see how it has fallen into the measurement stranglehold of ROI. (While I'd love to delve further into the digital measurement trends, how they have changed and what is the future, that deserves a separate post.)
For now It's time to take off those tight shoes and deal with social media ROI head on. I'm also avoiding the obvious measuring of direct e-commerce sales/leads driven from social as it's a simple Google analytics situation.
Here are 4 neat ways to help prove you bring business value with your social media marketing activity.
MEV - media equivalent value
This method is quite simply totting up the amount of impressions delivered through your social channels in a month and calculating the equivalent media spends required for delivering a similar number of highly targeted impressions on a CPM basis. As this method is based on a media model it only really starts to show notable value when your follower/fan/subscriber numbers reach a certain critical mass.
A nice addition to this MEV model, although it is exaggerating the reach somewhat, is to look at the influence network of your social media following. This is calculating all friends/followers, (diving by 2, to moderate buried, missed impressions) and x by the avg. No. of friends/followers (circa. 130). This will give you an idea of the 'potential' influence reach possible with your continued messaging through social. Note: This is not direct sharing, but halo effect and should be used as a potential indicator for reach, not an absolute value.
Data Value - the cost to acquire a customer as a prospect
Subscribers, followers or fans (likes) are all forms of data capture. All businesses should have a value they put on acquiring new prospect data. This use to be measured by the equivalent cost for list buying and calculating the conversions. You can look at assigning a similar proportional value to contacts made in any of your social channels. Aim to convert them to email address if that is how the value model is calculated. But conversion to frequent contact in social channels should carry a lead generation, business value.
IOI - Proving Indication of Intent from a surveyed base
(Apologies for adding a new acronym to the ever expanding marketing dictionary ;)
Many retail organisations use exit surveys to assertion intent, motivation for store visit and to measure awareness of campaign activity. The same principles can be used online. Define a set of questions that determine new customer vs existing customer, identify social channels connected, intent to purchase, purchase frequency, average purchase value and even willingness to promote product/brand.
Then set up a simple web survey with a tool like polldaddy.com or surveymonkey.com and start pointing your social base/email base toward it. Segmenting the results by new/existing customer and by social channels connected, will start to give to give you a good indication of intent and indications of values of channel. Of course it's not a direct measure of a sale - but it starts to paint a much more knowledgeable picture of indicated customer and prospect behaviour.
KPI - branding and shifting key performance indicators
I have kept this one till last as it is perhaps the most challenging, but most rewarding method to choose as your answer to ROI. - SOCIAL IS A BRANDING CHANNEL - It's a channel where branded conversations, raise awareness, convert prospects to valuable word of mouth advocates. Creating peer led conversations on products.
So why are we always forcing a CPC, CPA or trying to measure the journey of every penny to sales. Brand advertising was always happily measured by shifting of Key Performance Indicators. Simply put, measuring the shift in peoples perception of the key values your brand stands for. This was typically measured by pre and post campaign surveys on control groups of your target demographic.
However, no need for surveys with real time social media monitoring tools. You can simply define a benchmark on mentions, keywords, shares and during campaign activity and on an ongoing basis, measure the increase frequency and importantly the sentiment. (I covered some useful free tools to measure sentiment in a previous post on SMT)
The benefit of this method is that you start to focus more on the engagement and conversations. It leads to creating real engaged advocates and will also provide you with some amazing conversation snippets, that go a long way to showing social media is a very powerful, future branding channel.
The future of social will be far more business-focused, but for now...
Moving forward, social media strategy is and will become more closely aligned with business agendas and play a far more important role than just marketing reach and so the metrics will start to shift. But in the meantime those tight ROI shoes needs to be put back in their box, so we can justify budget and continue to innovate and connect through social media channels.
It's not always an easy battle to fight and perhaps you have other methods you already use, but hopefully these may spark some ideas and insight that help prove the ROI of your social activity.
Image credit: My first clogs By Nokton