A 5-Step Plan to Measure Social Media ROI
I have a riddle for you - what is the one thing that everyone has access to, but very few understand how to effectively use?
The answer is social media.
Anyone can pick up a mobile device and start snapping pictures, tweeting or posting stories. But while social media channels are easily accessible, brands can waste a lot of time and money if they aren’t using these tools effectively, or measuring their social media performance in the right way.
Keeping track of the right elements can be challenging - with the various activities and processes that are possible via social media, how can you be sure that your efforts are generating actual business results? How can you accurately measure the return on investment of your work?
In this post, we'll outline five steps below that you and your team can follow to ensure that your social media marketing efforts are making an impact.
Before we get into it, we need to be clear on one thing - ROI doesn’t have to be financial.
Of course, we all want to make trillions of dollars selling our products and services on social media, but given the complexity of attribution modeling with social media, we often don’t get a linear picture of how people are interacting with ads from awareness to purchase.
Therefore, ROI can absolutely be anything that's important to your brand - whether it’s awareness metrics, engagement metrics, conversions or revenue.
With that in mind, here are our five steps to better track and analyze your social efforts.
1. Identify Your Key Performance Indicators (KPIs)
As noted, ROI doesn’t necessarily have to be dollars and cents.
To begin to measure social media ROI, your organization needs to define which metrics are most important to you. These key performance indicators will help you keep your focus on how you should be aligning your social media efforts and strategy.
By clearly defining exactly what you're going to judge your performance by, you save yourself from getting distracted from metrics which aren't relevant to your strategic goals.
For example, if awareness is the goal of your social media strategy, you'll want to include impressions and engagements as KPIs. If sales are what you want to focus on, you'll track revenue and conversions.
One misstep that many brands make is judging social media success strictly by conversions or sales. Given the nature of user behavior, people rarely see a social post, click a link, then buy immediately.
Users interact with multiple stimuli on the path to purchase, so it’s important to define your KPIs so you can get a holistic view of how your social media efforts are helping to build your brand.
2. Build Your Social Media Strategy with Your Business Objectives in Mind
Once you have your KPIs identified, it's important to build your social media strategy in direct alignment with those goals.
If you decide that you want to leverage social media channels to help build awareness for your brand, you'll want to create a value-based content strategy, supported by social advertising which is optimized to get as many impressions as possible. Facebook, Twitter, Instagram and Twitter all have specific ad options that can help you achieve almost any purpose, so make sure you choose the correct one.
For example, if your goal is website visits, you won’t want to boost your Facebook posts using engagement optimization. This means Facebook will show your content to people who are more likely to engage with your content, not necessarily click your links.
There are a lot of pitfalls here to be careful with, but as long as your social media efforts and strategy are built with your business objectives in mind, you should be one step closer to measuring social media ROI.
3. Leverage Google Analytics and Social Pixels
Now that you have your KPIs in order, and you've built a social strategy which aligns with your business goals, it’s time to make sure you can track website activity from social media profiles.
First, it’s highly recommended that you leverage the Facebook Pixel. This little snippet of code, which tracks Facebook users that visit your site, will help you better understand the demographics of your audience, data which you can then use to fuel different attribution models and targeting processes.
Among the various data points available via the Facebook Pixel, you'll be able to track the number of users who converted after viewing your Facebook ad - even if they didn’t actually click on it.
You should also make sure that you have Google Analytics set up on your website, and that you're leveraging UTM codes. These custom URLS enable you to track the activity of users who come to your website from a specific post or ad. And you can get as granular as you like - UTMs are a great way to begin assigning value to your social media efforts.
4. Build a Reporting Dashboard
With all the data being generated as a result of your social media efforts, it’s inexcusable not to measure the impact of your activities.
By using a reporting dashboard, you can view your performance month-over-month, comparing the KPIs that are most important to your brand. Many brands tend to look at each month in a vacuum, however it's important to see trends over a long period of time, as opposed to what the data looks like from a short period.
Now, when I say “build a reporting dashboard”, I don’t mean you need to invest a ton of money in a custom solution. You can leverage tools like Google Analytics, Sprout Social and HubSpot to blend reports together, so you can create a dynamic view of your digital activity. This is where the reporting becomes hugely important, as you'll want to look for both 'correlation' and 'causation' to piece together the story behind the data. This means understanding which social advertising campaigns are generating the most traffic to your site, at what cost, and if that traffic is converting.
The goal is to create a clear flow of what users do - from when they're first served content, to when they leave your website.
This is where you can start to see the maturation of measuring social media ROI. Measure, measure, measure.
5. Remember the Contradiction
I'm going to contradict myself a bit here - while you can measure social media ROI in a lot of ways, you have to remember that you're almost always measuring the worst-case scenario.
For example, Google Analytics only reports conversions for social media if they happen immediately after the click. Therefore, if you're running a campaign and someone doesn’t convert immediately after clicking your ad, but then comes back later through a different digital channel, the original ad won’t get credit.
Many brands scoff at social media because it seldom generates the direct conversions that other channels like PPC do. You have to always remember realistic user behavior as it pertains to your social media efforts, and view the data accordingly. A HubSpot study shows that 80% of consumers are out in the digital ecosystem researching products and services, and only 20% of users are ready to buy at any given time. The vast majority of people simply aren’t ready to buy when they come across your social advertisements. Keep this in mind.
Measuring social media ROI is tricky, but it's not impossible. As long as you're realistic about the data, and the process by which you measure your efforts, you can get a clear idea of what your social media marketing initiatives are actually producing for your brand.
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