What's the trouble with ROI? It's an elusive beast for many marketing channels. It all boils down to how a business is measuring its activities and the outcomes that it values. Social media has been a huge conundrum for marketers searching for ROI, and because it is still a relatively new channel, some marketers believe that it's okay to not measure or understand the ROI of their social marketing activities. It's intervention time. I implore you to fight back; to require your marketers and your agencies to assign an ROI to your social marketing channels.
As a content & community marketer, the key is to measure the things that matter to the sales team. Does Sales care about how many likes or retweets your content received? No. They care about leads, close rates, and revenue. Does that mean there is no correlation between Interaction Rate and the number of leads a piece of content will generate? That is for the marketer to decide.
But once you can draw those correlations between content, communities, and top-line revenue, then you will be able to attribute real ROI to your social marketing activities. Then, by having the right technology in place to manage and measure your content, communities, and the leads that get driven to Sales, you as a marketer will have a clear-cut formula for ROI of each social channel.
As a hypothetical, the Marketing team conducts product-related webinars, and these webinars usually result in 5% of attendees becoming sales-ready leads. You have a landing page to capture webinar signups, and you have incorporated the webinar as a campaign into your social content calendar. You publish tracked calls-to-action and teaser content to drive signups across LinkedIn and Twitter through your social management platform for the 30 days leading up to your webinar. LinkedIn results in 100 webinar signups, while Twitter drives 200 signups.
You can stop right there to get an estimated ROI, if you'd like: the value of a qualified lead, according to the Sales team, multiplied by 15 (5% of 300 webinar signups). LinkedIn receives 1/3 of the ROI attribution, and Twitter receives 2/3 of the attribution, after factoring in overhead, such as the cost to create the campaign content, and the cost of your management and measurement platforms during the campaign. Now you've got campaign ROI, and if you zoom out for the year, you've got social channel ROI.
But stopping at an estimated ROI will not give you an accurate picture. If you were able to tag the source of the webinar signup from the landing page, and that landing page data fed into a marketing automation system, which connected to the sales' team's CRM, then you can paint a much more accurate picture. You can measure which platforms actually drove the signups and which drove each specific lead, and you can even get down to the eventual purchases of those specific leads.
Let's go back to our hypothetical numbers of 100 webinar signups from LinkedIn and 200 signups from Twitter. If those 100 LinkedIn signups actually led to 10 qualified leads, all of whom converted into sales, while the 200 Twitter signups led to only 5 qualified leads, and only one of them converted into a sale, then your ROI for each channel changes dramatically. LinkedIn, as a channel, becomes much more valuable then Twitter for this campaign, and it impacts how you optimize this campaign for the future.
This is how B2B brands can measure ROI across social - by having a measurement framework that accurately depicts the value of activities across Marketing and Sales, and by having the right tools in place to manage and measure those activities consistently in a closed loop environment.
Now, what's the trouble with Social ROI?