Measuring Social Media ROI
If you’re new to social media marketing the first logical question is “How will we measure the return on our investment?” right?
It depends on what the goal of the campaign is.
Are you looking to:
- Expand your brand’s visibility?
- Connect with your user base on a more personal level?
- Collect business leads or user profiling?
- Drive traffic and see larger sales?
- Create a relationship with users who will evangelize for you?
- Maintain, repair or enhance your public image?
All of these can be done with social media if you know how to use it. The difficulty of measuring the value of relationships is the key issue with measuring the ROI of social media. How do put a number on consumer interaction or relationships? How do you sell it to the board when you can’t put a $value on it?
Actually it’s done all the time in advertising. Let’s take the millions of dollars spent on a Super Bowl ad as an example.
Skip the beer commercials, because we know there are obvious relationships there.
But why would GoDaddy, Audi or Kraft spend over 2 million for an ad spot?
It’s not about sports. They want to be associated with the success and power that the Super Bowl represents. They want the attention of several million people focused on the event.
Over simplification? Maybe, maybe not. But by comparison the same amount of money spent on social media marketing could actually reap bigger rewards in the long run. While an ad on the Super Bowl might get talked about for a few months afterwards, it’s quickly eclipsed by the next year’s ads.
Creating a loyal following online can lead to a network of traffic coming from sources you never dreamed of, and can continue to build on itself for years. As social media networks and lifestream sites become more popular, word of mouth campaigns will take off with a simple 140 character statement. (Oh, and believe me, if you’re not in the thick of things the anti-sentiment could take off just as fast without you ever knowing it.)
OK, but where’s the ROI measurement tool?
There isn’t one.
Sure you can watch your traffic, and see a spike when a discussion about you or your products begins, but the ripple effect of a post on Twitter about how great your customer service is can’t be measured. How do you measure the long term brand awareness and the good will from a group on FriendFeed or Facebook that supports your company values and encourages conversation?
You can watch your click rates on your ads but remember that now people may click on your ad and then go onto their various lifestream sites and tell everybody their impression of what they found. They may not look at those links they got from their friends for days or months. Google may pick up a Twitter post and put it into the search engine results.
Time to get busy.
But what tools to use? It depends on what your goals, available time and tools already integrated into your business are. We’ll go over some of those tools in future posts. In the meantime, get out there and see what’s going on in social media. Don’t know where to starts? Friend me on FriendFeed and you can see posts from me and from my friends who work in the social media space. It will give you lots of food for thought.