Social Media ROI – what are you measuring and how do you stack up?
Social media is growing up and with that a continued demand on ROI. Confusion about ROI, what to track and how continues to linger in businesses large and small. While enterprise businesses can afford more expensive tracking tools, recent research shows that even they are still confused about what to track and. However, theÂ recent Marketing Sherpa Social Marketing Benchmark study suggests that its not that ROI is too much to ask of social media (indeed, many businesses are seeing direct ROI), its that ROI is different for businesses based on the phase they are in and how large (or small) their organization.
What are other businesses measuring?
Lots of businesses are struggling to find the metrics that work for their organization and even those businesses in the strategic phase (vs. trial or transition) are still developing the cost and profit models. When I look at this study, I see that in some cases metrics tracking based largely on ease of tracking and availability of information.
For example, regardless of phase, the #1 metric businesses are tracking to quantify social media efforts are visitors to the website. That metric is easy to obtain and analyze due to Google Analytics. But, regardless of stage, one of the least measured is customer service/support savings. I would argue that there is tremendous opportunity for businesses regardless of size or stage to quantify impact on customer service. But, since there is no single program which tracks that information for a business, businesses aren’t making the most of this metric. The questions I’m left wondering is “are they not tracking it” or “are they not finding quantifiable and easy information.”Â There is a lot of customer service opportunityÂ in social media – are we all just ignoring the oft recited examples of Zappos and Comcast? Tracking customer service benefits to social media is easier said than done, but it isn’t impossible and nor should it be ignored.
The second most stated metric is reach (note: not numbers) of fans and followers. While these numbers are easy enough to come by, as Tom Webster recently pointed out in his article about estimates and assumptions of social media measurement tracking this particular metric may be a statistical folly as well. Perhaps the better measurement, but not listed on this survey would be “frequency of action”Â in otherwords, whether you are driving traffic to your website, or sharing insightful tips, how many people actually CARE about the info your pushing and either share it or click it or pass it on or comment on it? That’s a metric that measures engagement and while it creates a bit of a daisy chain in metrics management, it enables you to see the strength of your content as well as your influence over your followers. From a marketing value, I see more importanceÂ there than reach (which by the way, effects engagement anyway).
“What’s the ROI of your mother?” -Gary Vaynerchuck
God and you know that I love metrics. I loove to torture numbers and extract key pieces of info. BUT there are values to social media that are largely qualatative and those metrics are much harder to measure. But just because they are harder to measure, doesn’t mean they aren’t valuable. Metrics like loyalty or branding and customer relationship. The irony is that while these metrics are much harder to quantify, they are likely to have longer term implications. These metrics are also communication and relationship intensive. But, if you are a small or medium business, I urge you to pick at least one of those metrics and work them into your social media program. Figure out what metrics allow you to track your objective and experimentÂ until you find a sweet spot.Â Yes, these metrics are softer and often more qualitative, but you CAN track them – using a variety of distinctive metrics – and you should.
What tools are used to measure social media effectiveness?
But of those surveyed, 69% of respondents said that they use free social media and analytics solutions. Tah-DAH! There’s your Google Analytics dependency. There are certainly many free social media monitoring services, and I think its a great place to start, but here’s the rub: you’ll spend a lot ofÂ time measuring metrics that don’t actually mean anything to you. I recommend determining your goals and objectives and finding tools that measure those goals – and yes, you should consider paying for them.Â You don’t have to pony up for the enterprise-level Radian6 necessarily, there are other paid tools that are worth it (some of which I’ve written about on Tool Tuesday) that don’t break the bank- explore and experiment!
What are the largest social media expenditures?
Regardless of business size or social media phase/maturity, staff and staff-related expenses are the #1 social media expenditure with an average of 45% of total social media budget being allocated to this line item in addition to 19% to agencies and consultants. This makes sense, social media is a labor intensive endeavor, both in terms of strategy and implementation. I almost choked when I saw that advertising on social networks (like Facebook) sopped up 21% of social media budgets! For small businesses, it was an even higher at 24%.Â To me, that’s an advertising expense – I think they can and should work together, but fundamentally, I think their approaches are different and I think the distinction should be made from both a budgetary and philosophical standpoint. After all, if you treat your social media audience as if you are advertising to them, well…they will just tune you out. Here’s my main philosophical approach: advertising can get you followers and fans, but it doesn’t typically create engagement or passion. I think that’s a very important distinction.
What tactics are businesses using and are they working?
The report shows that the more mature a social media plan, the more tactics a company uses. Its not entirely surprising given the fact that when a business is in their trial stage, its tough (and probably not advisable) to do too many tactics. What’s really interesting to me about this particular research is what’s missing: LISTENING. I was super excited to see so many businesses creating relationships with bloggers. While these programs are not easy(76% said it was either very difficult or somewhat difficult), the results trump (85% rated it as effective, with 37% of small businesses rating it very effective) the least difficult tactic of including social sharing in email content (65% rated it effective), especially in highly engaged industries like travel and food. Its also great to see that even 58% of those at the trial phase of social media employ
blogs. Blogs can achieve so many objectives including the number one most quantifiable one: website traffic.
“Our Facebook traffic has grown from 75,000 to 269,000 fans in under a year through constant communication to grow the user base via new campaigns, promotions or product launches. We look at Facebook as another website where we need to nurture the relationships.”
What’s love got to do with Facebook?
One element not directly measured through this survey was how using promotions, customized tabs and applications on Facebook worked for the respondents. From the comments it was clear that having a well thoughtout Facebook outpost was very effective and quantifiable. By defining your tactics and knowing your audience, Facebook can act as an outpost that’s as effective (and more targeted) than your website. Options are limitless with your Facebook page and should deliver value to new customers as well as existing. Creating a customized Facebook page is a tactic that can be modified to suit almost any objective. If you can dream it, you can probably do it. Its time to start thinking of Facebook as an extension of your website – it isn’t a replacement, but as a consumer, I can tell you how frustrating it is not to be able to share or find information of a product or a brand on Facebook. We’re past the phase where this is a “big business” tactic. It doesn’t have to cost you an arm and a leg and the benefits, including DIRECT ROI can be very exciting.
“We utilized a coupon application on our Facebook page. The offer was 40 percent off tickets to one of our home football games by “liking” our page. In the two-week campaign, we generated 660 likes, 228 email opt-in leads, and sold 127 tickets, $2500 in gross revenue. It was the most successful social media revenue-generating tactic we have used.”
I’m curious! What metrics are you currently measuring? What metrics have you abandoned or determined don’t really measure your desired objectives?
Resources: Marketing Sherpa Social Media Benchmarking Report