how to measure roi in social media

How To Measure ROI in Social

Brian A. Cliettewww.briancliette.com

@briancliette

www.superlinkjuice.com

Digital Marketing Strategist

Not Just Some Fuzzy “ Awareness and Connections”

Can Social Media Produce ROI in Dollars?

Not Just Some Fuzzy “ Awareness and Connections”

Yes! Social Media Can Produce ROI in Dollars

You’re snapchatting

You’re Facebook liking

You’re tweeting

You’re Pinning

These activities are great…

Are you tracking?

But the billion dollar question is

If you aren’t, you are not alone

Statistics show that more than 70% Businesses do not track their Social Media ROI.

Considering the Estimated $3.1 Billions spent on Social media in 2014, this statistic is crazy.

$2.2 Billion

“3 out of 4 Marketing Executives are unable to calculate ROI on Social Media” - Domo Social Media

Without understanding ROI, It’s hard to justify spending money on Social Media marketing

What does ROI really mean?

In the Financial World, ROI is used to measure the financial efficiency of an investment.

ROI is based upon the following Financial Formula.

ROI = Return – Investment / Investment

So what about ROI.... within the Context of Social media Marketing?

SIMPLE

A Marketing campaign with high ROI is considered better and more efficient than a marketing campaign with low ROI

Thus... the Social Media Platform and or Campaign that commands the highest ROI should garn the lions share of ad spend/effort.

So what about ROI.... within the Context of Social media Marketing?

Social Media ROI

IR – E / ESocial media investment- the amount of money that we invested in our social media campaign (E)

So what about the ROI formula for Social Media

Social Media Return - the amount of value that we got from our social media campaign(IR)

What’s Your Return On Social Media Investment?

Calculate Your Social Media Expenditure

HARD COSTSDenote the work or costs associated with the project during the campaign

SOFT COSTSCalculate the soft costs which include unseen work that composes the initial part of developing a project during the campaign

COST/ TIME SPENTCalculate the money spent per time spent on the social media during the campaign

SUNK COSTScalculate the sunk cost involved during the campaign i.e. a one time purchase of Social Media Software

HARD COSTS COST/ TIME SPENTSOFT COSTS SUNK COSTS

Calculate Your Social Media Expenditure

Social Media Expenditure (E)

Keep track of your media conversions

It's impossible to measure your return on investment without knowing your visitor conversion rate.

Ensure you can determine the number of visitors traveling to your page from social media accounts and the amount of those visitors making actual purchases and or other actions that directly relate to your Social media goals.

Top 5 Metrics for Social Media ROI

The more Followers, Fans, LinkedIn Group members. etc. that you have, the greater your ROI for any campaign or promotion

TRAFFIC

Getting visitors to your website or another URL where conversions happen is a major goal of any social media plan

Maybe the most important social media measure, this is the ratio of leads coming from each social site.

CUSTOMERS

Track the number and social media-generated leads that become actual customers.

CONVERSION RATE

Tracking the % of visitors by social media platform or promotion piece tells you what's working and what's not.

Defining and Adding a Value to Social Media Return

Return On Investment Not Return On

Ignorance

“Everything starts with an end in the mind”Brian Solis

Social Media Return is the Return on Your Goals

And you can define such goals as anything you want it to be.

Social media return is basically the value that you derive from your social media campaign based on the goals of your campaign

FansFollowers Comments

Are not Social Media campaign goals

Some Popular Social Media Goals

To Drive Sales To Drive Consumer Insights

To Drive Brand Awareness

To Drive Sales

If your social media goal is to drive sales, then your social media return is the number of sales that you can attribute to your social Campaign.

If your social media goal is to drive consumer insights, then your social media return is the quantity and quality of the consumer insights you get from your followers(Cost savings versus Offline Customer Focus groups).

To Drive Consumer Insights

If your social media goal is to drive brand awareness, then your social media return is brand awareness.

To Drive Brand Awareness

Deriving Real Dollar Value(s)

Real Dollar Value can be approached in two ways

1. Using Historical Data 2. Guesstimating

Using Historical Data

If you know your Lifetime value (LTV) of each customer, its easy to back track to conversion value

EX. Is LTV = $200 and you know 1 in 20 people who view your video become customers, then the value of getting a visitor to view the video is $10 ( $200/20) x 1

GuesstimatingHow much would it cost if you had to pay for the equivalent achieved by social media?

How much are you willing to pay per signup?

Cost Per Paying customer?

Amount labor hours saved in Tech support?

Cost per lead?Advertising Value and cost for equivalent leads?

Use that value35

Deriving Real Dollar Value(s)

Once you apply real dollar values to these goals you should have an rough estimate of Investment Return (IR).

("IR" - E)/E.After calculating your Social media expenditure(E)

Setting your Social media goals

Estimating your return and your investment(IR),

Use the ROI formula to calculate your social media ROI

("IR" - E)/E.

Assessing your Analytics

("IR" - E)/E.

ROI is a measurement of efficiency, so use the ROI number to compare to other social media campaigns as well as your TV, print ,radio and other Marketing campaigns.

Facebook ROI

Instagram ROI

TV ROIVS VS

ROI is a measurement of efficiency, so use the ROI number to compare to other social media campaigns as well as your TV, print ,radio and other Marketing campaigns.

T H A N K Y O U

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