ROI is not just a buzzword. This term, which is the abbreviation for “return on investment,” refers to the classic theory in marketing that you must consider the benefit from the overall investment in a marketing campaign. (Of course, the term can be applied to any investment you devote to other aspects in life, such as the time and money spent to improving your house, your health, or relationships.) In social media marketing, ROI should always be considered to ensure your campaign is literally worth it, as well as to also learn from any mistakes so that future campaigns can be more successful. In determining your ROI, it is critical to not only define what you hope to gain from a social media campaign, but also decide what metrics you’ll use to measure the success of a campaign. Knowing how to measure these metrics, as well as learn from statistics that don’t perform well, are also important to determining your ROI.
Defining Your ROI
Whether you run a small coffee shop or a major social media campaign for Microsoft, it is important to sit down and define your social media strategy. Recently, Microsoft launched social media campaigns for driving awareness to its new Office 365 and Cloud products. Matthew Tennant, a social media manager for Microsoft, explained that the social media strategy for these specific campaigns was clearly defined: Be Great at Listening, Drive Engagement, Foster Loyalty, Create Demand. For Microsoft, success with these goals would indicate that the company achieved a positive ROI, which is notably not related to a financial benefit. Matthew also explained that for its recent campaign, “Your Office, Your Terms,” Microsoft established the need that to be compelling, the company needed to demonstrate credible thought leadership and reasons to engage in the conversation. The goal of this campaign was to effectively become part of a conversation in which our target market is already engaged.
Setting achievable goals for an effective social campaign is important, but in order to know if you have achieved a positive return in your investment — whether that is time, resources, or cold hard cash, it is important to be able to measure your progress and key metrics to determine your success. Matthew says that to “To properly align our ROI [at Microsoft], we have looked at a number of key metrics to create our funnel: social sent message, retweets/shares/likes, impressions/reach, engagement, URL clicks, visitors from social sharing, end action click intent, and completed end actions.” He explains that sent messages represent a starting point of consumption and amplification, and retweets/share/likes help judge how well users are consuming the message, as well as how they are sharing it. Additionally, impressions/reach represents — out of the previous two metrics — how many people viewed the sent message, and engagement takes retweets/share/likes and combines general amplification on social networks. For social media managers, these are just a few of the key ways to measure success with a social campaign, but you may also want to consider other metrics important to your business, such as a comparison of conversions to customers, profits, or other data that matters to the overall success of your business.
Once you know what metrics to measure to help you decide if you’re getting a positive return on your investment with a social media campaign, it is important to know how to easily and consistently measure these metrics. As Microsoft, Matthew says Sprinklr (an enterprise social CRM tool) has “helped [Microsoft] evolve [its] conversation channels, workflows and queues, monitoring dashboards, reporting, audience, and content management for the ‘Your Office, Your Terms’ campaign.” He also notes that Microsoft uses Meteor Solutions on all campaign pages and posts to allow tracking of percentage of visitors from social media, top conversion rates, and many other important social sharing metrics. Microsoft has also embedded RIO/Atlas tracking into all social posts to track end-action of try, buy, registration, and find a partner.
While these tools can be expensive, Matthew added that Microsoft has also recently started using the social listening tool Simply Measured, which we wrote about in early 2011. This tool, which is offered as a freemium model, allows — as Matthew explained — anyone to “aggregate social media data from across several networks and the Web to ensure proper tracking on outgoing messages.” Smaller businesses can use tools like Simply Measured along with lower priced options, such as HootSuite, to help define and track metrics to help determine ROI.
Calculating your ROI
As you progress through your social media campaign, you will (it is hoped) be constantly monitoring your defined metrics and comparing them against your goals. At the end, you should have a clear idea about whether your definition of success was met. Be sure to also consider the sentiment of your brand and campaign; most of the popular social media tools used by social media managers offer sentiment analysis. As Matthew says, “the importance of positive brand sediment and discussion is forever powerful,” even beyond specific social media marketing campaigns.
Are you a social media manager or in charge of a social media marketing campaign? What struggles or challenges do you have defining and measuring ROI? Feel free to share your thoughts in the comments.