Maybe your company has been active in social media successfully for quite a while. Or maybe you just started to explore the possibilities on Facebook, Twitter and a multitude of other channels. But either way, chances are high you are a little uncertain how to determine the social media return on Investment. Of course you know that it is favorable to have high ROI as a measure of your impact of your efforts.
But social media ROI? How to determine which profit stems from which social media interaction with your customers? The answer is that measuring the return on investment of social media marketing activities is complex and has to be individually adjusted to the respective company.
What Is The Challenge In Measuring The Social Media ROI?
Sometimes it’s easy to get confused and not see the connection between social media marketing activities and return on investment, since ROI still has the classic economic ring to it. We’re talking about how much benefit is the investment yielding to the investor.
Whereas the rate of return is a definite number for classical advertising actions, it isn’t as much so in social media analytics. This makes it necessary to think around the corner. Therefore you need to be aware that there is no universal way of calculating social media ROI. But there are ways. The question is which of those ways is the one you should take? Where is the road sign, where are the guides?
Those are not uncommon questions as an interesting study by iContact shows. Ranking second among the challenges of many companies is the insecurity about measuring social media ROI. The difficulty may come from the sometimes subjective assessment of the own investment. What makes it more complicating is the problem of assigning the return to the causing marketing actions.
Qualitative values, like customer retention through a marketing stunt on Facebook need to be efficiently quantified. For example if you want to grow the relatively abstract value influence you could increase the amount of influential Twitter users, who talk about your company and direct others to it. If you’d rather focus on the attractiveness to gain new customers then try to work on the number of recommendations of your page that other Facebook users give. Those are values that you can put in concrete numbers compared to the keyword influence or attractiveness.
But the reason why there is no general solution to measuring social media ROI is that in the next step we have to evaluate how much money a like, a tweet or a subscriber is worth. This will come down to a very individual number since this is depending on the kind of company and their previous activity in social media as well as on the marketing activity itself.
What Do You Want To Accomplish With Your Social Media Efforts?
Take a look at the results of the aforementioned survey. Those are the main goals that businesses want to achieve through their social media efforts. But to really be able to measure those things and the ROI accomplished with them you need to clearly quantify those values. It is absolutely necessary to dig deep and analyze the KPIs of your social media strategy.
goal-based approach is the way to obtain and harness practical insights into your social media ROI. And a goal-based approach can only be achieved through objective-based content that neatly ties in with your social media strategy. This is the reason why there are only individual ways of measuring social media ROI. But it’s also the reason why there shouldn’t be too much of a hassle for you to successfully interpret your individual results in a meaningful way.
What Is The Value Of A Like Or A Tweet?
Let’s get back to putting a definitive value on your KPIs and social media efforts? Now what is the commercial value of a Like or a tweet? Depending on who you ask and the metrics you use, a Facebook follower could be worth nothing at all, as little as $3.60, as much as $22.93, exactly $136.38 more than a non-follower, or an astonishing $214,81 for a nonprofit organization.
Instead of becoming confused and desperate there is only one thing to take away from this. There might not always be a general correlation between a fan, a like, a tweet, a follower or subscriber. Keep in mind that so far we have established that to successfully measure your social media ROI you will be handling a personal goal-based approach. Don’t make the mistake to blindly follow those numbers. It shouldn’t be a surprise that your individual objective-based content will create an individual value of engagement.
In the end all businesses are trying to convert engagement into sales on social media. So let’s try to be less abstract when talking about social media ROI and let’s start to think about it as return on engagement.