Measure Social Media ROI in a Way that makes sense

Social media and online advertising platforms give us easy ways to “measure” how our campaigns are doing, but to interpret that data we need to know what sort of impact those numbers are having on the business. Here are a few ways we typically measure marketing efforts, along with their positive and negative factors.


Someone liked your Facebook page! Congrats!

Having access to a large community that has ‘liked’ or ‘followed’ you isn’t inherently a bad thing, obviously. Sometimes having a large follower base on social media can lead to a higher perceived value with potential customers. It can also lead to open communication and valuable customer service opportunities. But do likes and follows directly equate to social media success?

Having a ton of friends is great, for you as a person. Having a bunch of friends as a business is only truly useful if they are contributing to your ‘yacht fund’. If you have ten thousand likes on Facebook, but they never purchase from you or recommend you, what value do they have to the business? This sort of ‘like’ or ‘follow’ on your social media is considered empty, as it’s contribution to your business is essentially worthless.


Ok, so now we can measure the success of our campaign, right? Not only did your Facebook/Twitter/Google+ account get a ton of followers, but they’re all staying active on your page!

What are they talking about? Are you addressing customer service issues? Are they advocating your services to people outside of your community? Are they moving from your social media page to a place where they can actually purchase your product or service? This is where interaction numbers need to be taken with a grain of salt. Yes, users who interact with your brand on a regular basis are more impaction than empty likes and follows, but you can still have empty interactions. Much like an empty follow or ‘like’, an empty interaction with your brand (comments, shares, and the like) can also fail to effectively contribute to your business. Unless this person is a brand advocate, or purchasing from you themselves, their interaction with you may amount to a giant pile of nothing.


Now here is the real “dollars and cents” measurement for your social media campaigns, where you can see a direct and tangible correlation between your social media efforts and it’s affect on your company’s value. For example, someone finds out about your company’s product through Facebook, visits your Facebook page, follows a link to your website, and then immediately purchases from the landing page that the link sent them to.

Mission accomplished! You made a sale using social media. The value of that sale can be directly measured against the time and effort spent setting up the channels used to create a basic ROI for that transaction.

But yet again, there is more to it than that.

Unfortunately, with social media there is a grey area frequently found between these measurable lines. For each sale you make or new customer you acquire, your social media presence could play an indirect role in converting them. This is an obstacle that has been found in advertising since the renowned Madison Avenue days.

Billboards, radio ads, television commercials, and most other traditional forms of advertising all relied on a “broadcast out and shout” method that left no room for analytics or direct measurement. How could you tell if one of your customers purchased from you, based on a commercial they saw last weekend? Could you measure the cost of that advertisement, against the profit of the sale, to create a realistic ROI for that advertising method? Even if that customer told you themselves that they saw the commercial, how could you prove it was the direct cause of the sale?  Most consumers will go through a complex buying decision, with many factors and marketing tactics woven into the mix.

Doing things like conducting post-sale interviews and sending out questionnaires can shed some light on these buying decisions, but often those customers won’t even remember being influenced by your online brand, or will forget interacting with you consciously. This is where it is difficult to measure the direct influence since subconscious interaction plays a role in many buying decisions. Unless you’re a giant brand with a massive R&D budget, this can be a fairly daunting obstacle to overcome in measuring your campaigns.

So, what now?

There are flaws with every unit of measurement, and huge gaps in our knowledge of the buying process. Does that leave us to fly blindly and trust that social media is working as long as our business is working? Absolutely not. But you can use all of these measurements and tools together to create a big picture view of your campaigns and social media efforts. Combining different metrics to fill in the gaps, and frequently looking for ways to improve your methods, will lead you in the right direction. But never take your eyes off of the prize, and make sure that everyone on your team is focused in the same way.

What should you take away from all of this?

Look closely at a few areas, and get your marketing campaign on track:

  • Look at your campaign change over time. Are you growing your brand, or is it staying stagnant? What posts/tweets/messages are effective in getting your community to interact with you? Follow a trail of success, and try to find the factors that are leading to the results that you want. If you haven’t had success so far, start testing some new methods. Don’t know where to start, or stuck in a rut? Reach out to a consulting firm and get some outside perspective.
  • Look at the big picture. Don’t try and gauge the health of a campaign using one metric, instead, keep all measurements in mind (conversion, interaction, impressions, and overall brand awareness). Don’t discount the importance of any one type of measurement, and make an effort to improve your results across the board, at all times. Small improvements over time can create big gains in the long run.
  • Keep your goals in mind. When you start posting or tweeting just for the sake of the action itself, you’ve lost sight of the reason why you’re spending your time on social media in the first place. Cut back on wasted tasks, and don’t just contribute to the noise. Before starting any campaign, you should establish clear goals, a clear target market, and a clear and concise plan of attack. Include some a/b testing, but make sure that all of your actions are reaching towards a central goal. Think “Brand First”, and you will succeed!