Measuring Social Media ROI
All marketing efforts are finally measured in terms of the ROI. In calculating ROI from SMM, Google and other analytics tools are used. On social media, the process of customer acquisition is often detailed. From trying to grab attention of a potential customer, to slowly building your relation with him/her and to finally convincing him to buy from you, it is a long process. However, because you build a relation and gain their trust, your acquired customers are more likely to be loyal than your customers acquired through other advertising channels.
Challenges in measuring ROI
There are 3 main challenges in measuring ROI of SMM.
- The first challenge is tracking because interactions happen simultaneously on various social networks/websites/blogs/etc. A ‘like’ on your Facebook post will not be registered by Google analytics.
- The first challenge leads to the next challenge, which is aggregating data from all these data sources.
- The third challenge is in understanding offline impact of our online marketing. It is almost impossible to find out if an online ad has motivated a customer to visit the brand’s physical store or to tell a friend or made an enquiry call.
Essential metrics of measurement
Due to the very nature of social media, there are many ways to measure effectiveness of your campaign and hence the ROI.
- Branding – You can directly establish the impact of your frequency of your posting on the audience size.
- Engagement – You can monitor your conversion rate for each post so that you can focus on further developing the content that leads to higher conversion rate. Track your audience churn rate to see the number of people leaving your pages on each social network you are on. This will help you identify content that is unable to engage your customers. Further, track the source of visitors to your website to see the effectiveness of your SMM efforts.
- Conversion – To correctly track the conversions due to your SMM efforts, you should be able to track the inbound links that are directing visitors to your website. Google analytics is a great tool to understand your social media conversions. You should have already calculated the value of conversions to calculate your ROI based on conversion rate.
It is also possible to track offline conversions from your online effort using additional tactics like offering dedicated phone line, exclusive coupons, etc.