How to: Measure ROI from social media

How to: Measure ROI from social media

by Richard Broughton – 17th August 2011

It’s the question that everyone’s asking: “You say that social media works as a marketing tool for B2B, but where’s the ROI?” ROI is, of course, the definitive way to measure success. With social media, it is absolutely possible to measure success, but first you have to decide what it looks like. And the answer is not always financial.

Social media is not as simple as ‘money in – money out’. Very often it is nigh on impossible to establish a direct link between the money you invest in a social media campaign and the money you get out of it, but that’s not to say that you can’t do it. What you need to do is look at the role it can play in the buying process and measure its performance according to the way it fulfils that role. In other words, social media is often part of the process that leads to ROI and should be judged as such.

So how do you measure the contribution your social media marketing is making? Start with the objectives you have set:

  • Raising awareness: first and foremost, social media is an excellent awareness tool, enabling you to create and distribute content, start conversations, and engage in existing ones, all with the aim of creating additional ‘buzz’ around your brand. If this is your goal, then your contribution will be measured in terms of the amount of ‘buzz’ you succeed in creating, and also the mood of this ‘buzz’.
  • Engaging with your target market: the next step involves taking your activities further down the funnel. You must aim to engage with your customers and potential customers, inviting participation in your social media activities. In this case, your contribution is measured by the level of engagement you achieve – how many people respond to your communications and in what way?
  • Driving traffic: it may be to your site or to another platform, but social media can be used to drive traffic. This objective is simple to measure as it’s purely a case of numbers.
  • Generating leads: using social media to generate leads probably involves one or more of the above objectives as well. First you need to drive traffic, and then you need to encourage the visitors you generate to leave their details. Again, success is easy to measure, as it will be linked to the number of leads you generate.

In addition to your objectives, you also need to look at the tools you have selected to achieve them. The success of each tool can be measured in different ways depending on what you are trying to achieve:

– If you’re using Twitter, your metrics will develop over time. When building ‘buzz’, you are looking to recruit followers and get your message out there by tweeting regularly, but engagement, driving traffic and lead generation involve positive action in the form of retweets and clicks on links.
– Blogs are obviously there to be read, but ideally you are looking for engagement in the form of comments, traffic driving in the form of clicks on links, or even lead generation via a form linked to a blog.
– Networks such as LinkedIn enable you to create discussions, highlight content to read and even send targeted mails to your members. These different actions provide different metrics depending on your objectives.
– Video sites such as YouTube are primarily measured by the number of videos viewed, but there are deeper forms of engagement, such as comments and (if you allow it) embedding of your videos on other web sites, plus visitors to your site or other content via links you place alongside videos.

Speak the right language
Once you have confirmed your overall objectives, tools, and metrics, you need to set clear goals based on defined the metrics. These should be actual performance figures based on current benchmarks, and you also need to be sure that the relevant tracking is in place in order to measure results. The important point, however, is that these are numerical targets you can show to your boss to prove that your campaign is measurable. During the campaign, you can also look to translate them into a format that is more familiar – many people present the results of social media campaigns alongside an equivalent media spend’, an estimation of how much it would have been necessary to spend in order to generate a similar number of impressions / clicks or to reach a similar number of prospects.

Measuring the ROI of a social media campaign is rarely based on a standard formula – it all depends on what you are trying to achieve and how you are trying to achieve it. The key is to set goals based on the tools you will be using, and to make these goals numerical and easy to understand. While these goals will often not be financial, you will be in a position to say whether or not you have achieved your objectives and thus a successful return on your investment.

(Content originally created by B2B Marketing)