Today, social media makes up 10.7 percent of marketing budgets. By 2020, CMOS plan to double spending to 23.7 percent.
Do you have the right numbers, if any, to prove that social is driving business results? Most don’t. According to the latest CMO Survey by Duke University:
- A mere 15 percent of marketers have proven social’s impact quantitatively
- 58 percent of CMOs feel increasing pressure to prove the value of marketing
- Only 2.3 percent of marketing budgets is dedicated to ROI measurement
With greater investment in the space comes greater scrutiny.
“If marketers are unable to map social media back to business objectives, board members
and C-suite executives won’t take their efforts seriously,”
says Michelle Vangel, Cision’s vice president of insight solutions.
But how can you showcase social’s bottom-line impact, gain more influence as a decision maker and surge ahead of competitors? Turn to a single, intuitive social media platform, like Cision’s, to help your brand make decisions based on data, not blind guesses.
What Is Social ROI?
Social ROI depends on your brand’s immediate and long-term objectives.
“The factors to consider when measuring social media will vary depending on your brand’s overall goals,” Vangel says. “They could include how well your brand is building awareness and driving website traffic, inciting behaviors that drive prospects closer to conversion, or even changing perception of your brand or overall industry.”
Beyond the bottom line, social ROI can also be tied to brand health measures such as NPS (net promoter score). Social content can be mined to calculate NPS (% content with recommendations for – % content with recommendations against), which can be correlated with other research such as brand tracking data or customer satisfaction surveys.
“The beauty of social is that you can easily mine the data to help fill the gaps and understand the drivers of drops or rises in scores, which can be challenging when working with structured data,” -Vangel says.
“Brands can also contrast favorable and unfavorable responses to their content to track their net tonality score (NTS). Closely monitor changes in these numbers to track your brand’s pulse.
Why Is Social ROI Important?
To gain executives’ respect and attention, you need to prove your strategies reflect the larger business trajectory. What data can you present today and how are you planning to improve the results to brighten the company’s future?
With social media analytics, brands can pinpoint where efforts have the most impact, what can be improved upon and why it matters to the overall business.
Ready to get started? Implement these nine steps into your measurement strategy.
1. Set measureable goals
Sales and marketing focus on conversion-based goals (downloaded content, filled out contact forms and clicked links), whereas client services looks closely at engagement (response time, tone of voice and interactions).
While each department has a piece in the puzzle, don’t forget to set goals for your overall strategy, too. Will you focus on social interactions to drive brand awareness? Do you want to improve conversion rates and drive advocacy?
Examine your current reach, traffic, interactions, leads and conversions to determine what needs the most attention and will have the greatest impact in the future.
2. Determine the right platforms
Rebecca Lieb, digital marketing strategic advisor, says that today’s departmentalized structures hinder “the advancement and holistic nature of social as it should exist.”
But if you involve all departments in your social strategy, you’ll learn which platforms to keep, which to spend less time on and which to invest in moving forward.
3. Invest in the right technology
Over two-thirds of marketers use three tools to track their social ROI. But how accurate is their reporting when all of that data is combined?
Avoid distorted insights from piecemeal data by investing in an intuitive tool that combines all stages of social — publishing, monitoring, engagement, analytics and more — in one place.
By evolving with the changing communication industry and investing in an integrated solution, your brand will notice a major return on investment. However, brands that continue to rely on manpower to monitor the millions of daily tweets will ultimately come up short as the data they painstakingly acquire will be incompatible or incomplete.
4. Track your goals
For example, a brand that wants to expand reach should look at their total number of followers over different time periods. This will help determine if any specific campaigns led to growth.
Create UTM codes for each channel and campaign to track the number of visitors accessing content from social posts and how those efforts affect traffic. From there, your brand can determine how many people who engage your social content become leads and convert into sales.
5. Assign a value to your goals
Calculate a monetary value for each conversion to track. ROI measurement depends on the approximate bottom-line value of each conversion, plus the number of conversions. Gauge these numbers with historical data or, as a last resort, an educated guess.
Historical data: Do you know the lifetime value of a customer? If so, it’ll be easy to calculate the value of actions like a newsletter signup. For example, if you know that 10 percent of the people who sign up for a newsletter become customers and the lifetime value of a customer is $100, then the value of signup is $10.
Estimate: If you don’t know specifically how much a customer or conversion is worth, make your best guess. Ask yourself, “How much would I be willing to pay for someone to sign up for my newsletter?” Use that number to calculate the conversion value. Once you’ve gathered hard data, you can come back and update estimated values.
6. Calculate your investment
Once you’ve gathered that information, calculate your spending to determine the overall investment. For example, if you’re dedicating 10 labor hours a week to Facebook at a cost of $50 per hour and your Facebook spending is $300, then your investment is $800 per week.
7. Analyze your results
If you’ve followed the first six steps, you have set yourself up to calculate social ROI. The data gathered on conversions and the goals tracked in Step 4 will help you determine your overall social impact.
Calculating results won’t be as simple as subtracting spend from revenue, though. You have to identify the “why” behind the data.
“There need to be clear, casual connections that can be made from social spending and revenue,” says Jun Fukukura Helzer, Cision’s director of customer insights and campaign analysis. “This involves tracking every channel, every campaign and other variables, such as strategy changes in sales and time of year that may have had an effect on revenue.”
By taking this deeper look, you will pinpoint the variables that impacted social’s performance and make informed decisions about how to improve results moving forward.
8. Showcase your efforts
Now, it’s showtime. Present your results to executives, shareholders and other important members of your organization. Make the data easily accessible and visual by using charts, graphs and other reporting options.
Explain your process clearly, including how you came to your results.
Be prepared for some pushback, especially if you estimated monetary values in the beginning. Your data may be challenged, but the purpose of sharing it is to spread awareness and provide an understanding of how social benefits your business.
9. Take Action
Once you activate a social ROI measurement plan, stakeholders can make more informed, data-driven decisions. Stand out by proposing new campaign ideas or changes to existing strategies when presenting your results or writing quarterly reports.
Remember, social ROI is a process that must be revisited frequently. Social is constantly evolving, and those changes may affect what you measure or the strategy you use to leverage platforms.
Start now by arming yourself with the right strategy and social media management tool. Social is a necessity to successful business, but if you don’t learn where your organization is already succeeding and where it faces challenges, you won’t see or understand any true results.