Social Media ROI: How can I prove that social media affects my business?
September 12, 2011 6 Comments
“Forrester Research estimates that social media will make up 3% of overall interactive marketing spend in the US in 2010 with the highest delta of growth in any channel over the next four years. As social media’s channel grows so will the pressure to quantify” (Djambazov, 2010).
However, investing in Social Media or in any other field require the following:
- Know Your End Game: Know what are you trying to accomplish and how you want to try keep track of it all.
- Define Your Metrics: What metrics do you need to track to quantify results: Leads, Registration, Sales?
- Check Your Tracking: If your success metric is sales make sure you’re not just tracking leads. This requires testing.
- Set Expectations: Benchmarking is great way for you and your
- Have a Chief marketing officer: to have realistic expectations from a campaign.
Okay, after doing the above 4 steps what come next? How can I calculate numbers or dollars?
ROI %= [(Gains – Costs)/ Costs] X 100
This useful video gives a practical examples of turning metrics into the amount of saved dollars
The following table I create is another example that shows how to calculate ROI of Enterprise social media by focusing on the important business drivers (Hetrick, 2010):Press on the table to enlarge it
Some useful Metrics Tools:
Google Analytics — It’s free and it can provide a really powerful baseline for a variety of different factors. You can track incoming links and then the activities of the users they send, which can be helpful.
Omniture — Omniture has a slew of services available for businesses, including components that track Facebook and Twitter metrics.
TweetMeme Analytics — This is useful if you use TweetMeme’s retweet buttons on your sites. It’s a lot like Google Analytics, but focused on TweetMeme.
PostRank Analytics — This suite of tools measures social engagement on other platforms and services. What’s nice about PostRank is that instead of just a raw number, you can actually see the messages and comments from other sites that contribute to your stats. This can be really important for sentiment analysis (more on that later).
HootSuite — HootSuite is a great Twitter manager but also offers impressive analytics. The nice thing about the click data you get from an app like HootSuite (or bit.ly) is by looking deeper you can more easily see if those clicks translate into transactions or impressions on your other sites.
- Are you the company Shmoo?
- Determining the ROI of Enterprise 2.0 by Hinchcliffe 2009
- Determining the Value of Social Business ROI: Myths, Facts, and Potentially High Returns