Many years ago, the method through which companies would acquire new customers was by putting up promotional material and hoping that this reaches more people. Marketing was never an exact science and it is no different today.
In the age of the internet, however, there are a couple of things about it that have since become empirical. You can now measure the exact success of a campaign without a massive amount of effort. Now that the internet has become more social, the exact way in which you can do this is a bit more complicated due to the decentralized and unpredictable nature of social networks.
The dominance of social media on the daily lives of the internet’s two billion users has presented a goldmine for companies looking to make their mark with regard to expanding their brands. A survey by Social Media Examiner shows us 63 percent of all marketers intend to expand on their efforts in major social networks like Facebook and YouTube.
The problem with social media marketing is calculating your ROI, since objectives and results cannot always be translated into dollars and cents. The same report shows that a whopping 59 percent of marketers are unable to confidently measure this aspect of their campaigns.
Social media ROI can be broken down to one basic equation: Take what you get out of it and divide it by the cost.
You’ll get the cost per dollar of everything you do. But there are many more aspects to tracking and calculating your social media ROI that this doesn’t account for. Getting a proper measure is more of a three-step process:
Step One: Set Up a SMART Goal
This needs to be reiterated: Revenue isn’t the sole goal of marketing on social media, so calculating ROI in those terms might be useless or impossible in some situations. To figure it out in the most realistic manner possible, you will first need to establish an objective. The best way to do this would be through the S.M.A.R.T. methodology. It needs to be specific, measurable, attainable, realistic, and time-bound.
Some things to take into consideration for the object of your goals would be new followers, purchases, contact form completions, new signups for your newsletter, or time spent on a particular page (i.e. engagement).
A good example of this put into practice would be if a company would set a goal to grow their Facebook following by 8 percent over the next month. The goal is specific. It can be measured through Facebook’s own platform. It’s far from impossible and a very realistic baby step. And you give yourself a specific amount of time to complete the task. Without this set of criteria, you can’t hope to accurately measure your ROI when marketing on social media.
Try setting your goal right now. Make sure that it can be measured by the tools you are using. Give yourself a time constraint that makes sense, such as a month or a quarter.
Step Two: Track and Report Your Progress
To really gain a perspective on how well you are accomplishing your goals, you need a way to monitor their progress over time and compare the results to other attempts you’ve made at improving your campaigns. For this, you’re going to need some serious third-party software.
Google Analytics actually provides a very useful feature for this kind of thing. You can set up goals based on certain metrics quickly and monitor them along the way. This will let you, for example, set a goal that tracks how many people are visiting your social media landing URL (with UTM codes) and gives you a more surgical perspective of how well your social efforts are doing.
If you’re tracking how many people visit you from a particular link, set up a goal based on URL. If you want to see how many of your visitors interact with a video on your site, set up an event-based goal. You can also use this to quantify how many times a unique person clicks on a social sharing button on your site.
Web analytics can only take you so far, though. You can use a social media dashboard that can provide you with even more relevant measurements, such as the types of impressions you’re getting or information pertaining to demographics. Good dashboards will give you all of the information you need without making you switch between different platforms, let you track your company’s progress chronologically over any span you want, and allows you to keep a close eye on how your competition is doing in real time.
Keep this in mind: The most important metrics to track with regards to social media are your following, content engagement (likes, retweets, etc. on the things you post), demographics, brand exposure (i.e. what others say about you), and popular keywords in your niche. All of these combine to paint a picture of your “social media health”.
Remember to set a schedule to track all of this data regularly. Reports that come too frequently will give you too much minutiae to provide a broad and clean perspective. If they come too rarely, they’ll blur out the pitfalls in your campaign and you won’t be able to spot the inefficiencies in it effectively.
Step Three: Put On Your Math Hat
Remember that social media ROI equation we came up with? It’s time to calculate the results of your campaign in two ways. Take the time you invested in this effort and divide it by the quantifiable objective. Then replace time with capital. To make this simple, let’s build a scenario:
You have 500 followers and you want to increase that by 10 percent by the end of this month. You reach the deadline and after 50 man hours of work and a $10 investment, you end up surpassing the goal and grow your followership by 20 percent. Following our equation, you have spent a total of half an hour in man hours and $0.50 per follower. Your next goal should probably be to reduce the total amount of time spent chasing after followers!
In very nebulous circumstances, such an equation might not work because your investment didn’t involve any capital and no monetary return could be measured. In such a case, if you really want to attach a dollar value to everything, consider a comparative analysis in which you determine how much X number of followers or X increase in engagement is worth to you. And then attach an hourly dollar value to the time you spend attempting to reach this goal.
If you find yourself getting frustrated because of your goals, don’t fret. Take baby steps and keep at it. Invest more energy into improving your plan and remain consistent at every turn.
In time you’ll learn how to adjust your goals properly and place more adequate values on the results, giving you a clearer ROI analysis. While that’s going on, the tools at your disposal should make that process go by more smoothly!