One of the most challenging tasks in selling digital marketing to the C-Suite is defining the return on investment (ROI). It can be particularly challenging when justifying the budget for social media marketing (SMM).
Many SMM efforts lend themselves to brand building, community building, and customer service. Unlike "traditional" SEO, these activities aren't always transactional in nature.
Marketing ROI has traditionally been measured like this:
Return on Investment (%) = (Net profit / Marketing Costs) × 100.
Sometimes, cost per customer acquisition is the measure. As recently as 2010, the dawn of social media marketing, those in the C-Suite attempted to apply the tried and true transactional ROI model to SMM. The CMO Survey, as reported by Forbes, lists the most common metrics used to measure social media investment.
By 2013, only 9 percent of marketers were using traditional ROI metrics, down from 17 percent in the initial survey. The reason: many social media activities can't be effectively measured using a transactional formula. SMM is often best measured in terms of audience reach, engagement and sentiment.
That said, there are highly successful direct response campaigns that run on Facebook and other social networks every day. These approaches deliver an ROI that can easily be measured the old-fashioned way. Pam Dyer lists 10 here. If that isn't enough, Rob Petersen has another six examples.
Business Insider recently published a story on the death of social ROI. They claim that companies are starting to drop the idea that social media ROI can be measured.
I asked Nicole Harrison (@SocialNicole) about this and the importance of ROI in social media. She was adamant that social media done correctly will deliver results and recommended the following list of 11 free tools for measuring both ROI and social media success.
HootSuite is a good all around tool to use for management and metrics tracking. You can schedule posts from multiple social media channels as well as create over 30 individual reports. The free metrics are somewhat limited, but for beginners it's all you will need.
SocialMention is an aggregate tool similar to Google Alerts, but for social media, only. This will give you insight into not only what is being said, but who is saying it and what the general sentiment is.
You can set an RSS feed, email alerts, or even add a real-time widget to your website. You can also download a CSV/Excel file for further evaluation.
Monitoring influence isn't an exact science, but having a tool that helps you begin to gage someone's online presence can be useful. Klout is a free tool that will allow you to measure influence on Twitter, Facebook, Google+, and several other channels.
4. Facebook Insights
The Facebook insights dashboard gives you all of the analytics data for your Facebook page. The insights allow you to understand your audience, what they are reacting to, and adjust your content to meet their needs.
5. Twitter Analytics
Twitter now has its own analytics dashboard. With Twitter Analytics you can track timeline activity, including tweets that were favorited, retweeted, and replied to. The tool also tracks number of mentions, new followers and newly followed. For more information, see "Twitter Analytics: A Beginner's Guide".
6. Google Analytics
This is one of the easiest and cheapest ways to track success of a specific link within a campaign. It's also one of the most overlooked methods of tracking.
7. Custom Social Media Reports
Google Analytics does a nice job tracking the number of visitors to visit a website from different social channels. These custom reports give you additional insights as to how traffic is being driven to your website.
If you aren't blogging or creating new and useful content to draw people to your website, don't expect these numbers to be high. It requires a content strategy to really work people toward your website. These easy to install one-click reports are invaluable.
This link shortener allows you track everything you share. This is a great way to see what your audience is interacting with and decide if the content you share is valuable.
Bitly also integrates into many third-party software packages, making it a great umbrella tool, as you can track within multiple platforms. For example, you may use Social Sprout, a paid management platform and Buffer both with Bitly then review data in individual platforms or as a whole through Bitly.
Buffer is a great tool for scheduling content. You simply fill up your Buffer account each day and it will automatically post the content to the channels you select.
For metrics, you're able to look at a dashboard inside Buffer to see what posts are getting the most interaction, or attach it to Bitly to include in your general tracking. You can also attach UTM parameters to track traffic in Google Analytics.
TweetReach is a great tool for tracking a campaign or conversation on Twitter. Simply enter your search term or hashtag and allow TweetReach to search for the tweets to tell you reach, exposure, activity, top contributors, and more. You can look at the past 50 mentions for free.
Keyhole is similar to TweetReach except that it also tracks Facebook and Instagram as well as Twitter. This is a great way to track a hashtag or keyword for a campaign or event.
The free social tracker gives you a sample of what the tracker can do. If you signup you can get a three-day free trial, which may be adequate for an event or snapshot view of a campaign. To get a long-term view you can sign up for a monthly paid plan.
Measuring social media ROI isn't always easy. Building a brand and improving your customer service may not show up directly in your analytics, but these "soft" metrics can have a major impact on the bottom line.
Do you have any tools or measurable SMM success stories to share?