By Cassy van Eeden
Social media is an investment, one that affects your budget and your bottom line. Surely this means that you need to know what your return on investment (ROI) is in order to determine if the investment has been worth your while?Why should I measure ROI?
Apart from gauging success, measuring your social media ROI is necessary
to a number of other business functions.
Jana Bakers, content manager at Black Snow Digital
, says, “Unless you’re tracking what you’re doing, what’s being spent and what kind of results you’re getting, it’s really difficult to determine whether or not anything you’re doing is working.”
She adds that measuring your ROI allows you to gain a deeper understanding of your audience
. This results in more effective targeting that increases your revenue.
Tracking your ROI also means that you are able to identify areas that need improvement, says Natasha Clark, managing director of The Birdhouse
. “If your numbers and engagement rate isn’t keeping up, then you need to evaluate and re-strategise your content to ensure that you’re reaching your goals and objectives.”
“You want to allocate your budget to the channels which produce the best results for your brand,” says Mark Atkinson, co-owner of Red Giant Design
. “Measuring ROI helps you do that.”Who needs ROI?
If you are offering social media as a service, you will need to report your results to your clients. But they aren’t the only stakeholder that is interested by your social media ROI.
Claire van Dyk, head of content and communications at ROI Digital
, says: “It’s important for social data to be relevant to everyone in your business, not just the social media team.”
“The sales manager wants to know how social media is affecting your bottom line,” says Atkinson. “HR wants to know how many top-class candidates are being attracted as a result of social media campaigns. The customer relations department wants to measure how quickly customer queries and complaints are being resolved and what the impact is on the brand’s reputation.”What do I actually measure?
When it comes to social media, measuring your ROI is not an exact science. Rather, it is a science based on the needs and goals of each specific brand.
“Before you get into measuring your return, you should start by first setting goals,” says Bakers.
“You need to assign a value to each of the key metrics that social media is driving and then figure out the quantity of those metrics that are being driven by social media, as well as what it’s costing you to achieve those quantities,” explains Atkinson.
“Don’t look at the vanity metrics (likes and +1s) in order to measure the success of your efforts,” says Van Dyk, “You need to measure social media ROI as it relates to your broader business goals.” Baker recommends tracking email list sign ups; contact form inquiries; purchases; and downloads of a whitepaper or eBook.
Do you measure your social media ROI? What goals have you set? Let us know in the comments below.