Social media ROI has remained elusive for numerous marketers despite their best efforts to develop a calculation that will prove the business value of the allotted social media resources.
Through a new feature in Google Analytics, some customization to your Google Analytics tracking, and diligent work on the part of your social media team, the ROI of your social media efforts can be discovered using Google Analytics. To get to the point where you can calculate social media ROI, there are four steps that need to be taken.
Step 1: Implement Proper Social Media Tracking
Ensure that you’ll have the ability to segment revenue that’s generated through social sources by your internal direct efforts and revenue that resulted through external social means. In other words, revenue that’s generated as a result of links your team placed on social sites and revenue generated through links placed by people outside your company.
In order to measure your direct impact, you need to ensure you’re always using campaign tracking on any links you put out on social media sites that point back to one of your sites. It’s a fairly easy process, but one that can be a bit tedious to manage at the outset. Once you’re in the habit of always adding campaign tracking, it will become second nature and the results will be well worth the effort.
Google offers a simple URL builder tool to help create campaign tracking strings, but you should either build your own tool or creating one in Excel that allows you to manage the names that are used for each parameter. This is very important because you don’t want to cause yourself reporting headaches by using different names for parameters that should be the same.
The last piece is creating an Advanced Segment that allows you to get a breakdown of the last-click transactions that occurred as a result of your direct social media efforts. This would be accomplished by combining parameters that were used in the campaign tracking. For example, if all the links you place have “social media” as part of the medium, then you’d use Medium as the dimension and containing “social media.”
You’ll now be able to segment out the visitors who got to your site as a result of your direct efforts, but you’re still missing the segment that came to the site through a non-campaign tracked social source. To key in on this segment, you’ll need to create another Advanced Segment.
The second Advanced Segment should use Source as a dimension and should contain a regular expression that matches all social sites that are relevant to your company. You’ll then want to include an “and” statement that excludes the segment that was included in the first Advanced Segment. For example, if you used “social media” as the Medium in the first Advanced Segment, you’d now exclude it here.
You’ll now have the ability to segment revenue generated through your own internal direct social media efforts and revenue generated through external means.
Step 2: Track Social Media Last Click Transactions
Last-click transactions are typically how all transactional data is reported in web analytics tools. Through this method, each transaction is generally attributed to the source that drove the visitor to the site when the transaction occurred.
When looking at just social media referred visitors, you’ll want to apply the Advanced Segments that was created in the first step to the ecommerce reporting in Google Analytics. By applying each of the Advanced Segments, you’ll be able to see the revenue that’s generated by your direct social media efforts and the social media revenue generated by other external means.
This will get you part of the way to calculating social media ROI, but much of the value from social media likely doesn’t come from last-click transactions. That’s why the next two steps are critical to gaining an understanding of the overall ROI of social media
Step 3: Track Social Media Assisted Transactions
This step is not yet available for the vast majority of Google Analytics users as it involves multi-channel funnels, which are still in limited beta. Once it’s released to the masses, however, it will provide incredibly valuable data on transactions that were assisted by social media sources. An assist means that the referring source wasn’t the last click, but the source did refer the visitor to the site in the 30 days prior to the transaction.
When measuring assists, you’d again make use of the Advanced Segments that you created in step one to breakout your social media efforts from what was referred by means external to your company. Instead of looking at last-click revenue that was generated by each segment, you’d instead be looking at the revenue that each segment assisted in generating.
Once this data is compiled, you’ll now have last-click revenue generated through social media and assisted revenue generated through social media.
So what about transactions that occurred where a social media source wasn’t involved in an assist or the last-click but did influence the buying decision? This is where it gets tricky, but it's possible to capture that data in Google Analytics as well.
Step 4: Track Off Site Social Media Influence on Transactions
In many cases, social media will lead to transactions without ever referring the visitor to your site. A new customer may become aware of your brand and make their purchase decision through social media, but come through search or another source to make the purchase. When this occurs, there’s no record in Google Analytics of social media having any impact on the transaction.
To begin gaining insights into the influence of off site social media behavior, it’s important to include a couple quick questions in the checkout process that will allow you to find out what factors played into their purchase decision. Simple questions like the following examples where the user selects from a drop down list of possible answers can provide the information you need.
- How did you hear about us?
- What had the greatest influence on your purchase decision?
Just having customers fill out these types of questions during the checkout process isn’t enough. In order to provide value in a social media ROI calculation, you need to capture the answers in Google Analytics as part of the transaction information.
Use the Affiliation attribute in the e-commerce tracking to capture the answers instead of using it for its typical purpose. By doing so, you can see the answers that were chosen for each transaction that’s recorded in Google Analytics.
The end result is that for every transaction that occurs you can see if social media was responsible for the last click, assisted in the transaction by driving a previous visit, influenced the purchase decision off site, or a combination of the three.
The last piece is to determine an appropriate attribution model for your business. Once that’s been determined, you’ll know the amount of revenue generated from social media and can determine the ROI based on the cost of your social media efforts.
These same steps can also be applied to goal values in Google Analytics, where actual revenue isn’t produced, but value is generated by accomplishing a non-transactional goal. To make this work, you need to ensure that each goal in Google Analytics has a value that’s been established and is defined as part of the goal setup.
Lastly, don’t forget about the value of social media beyond ROI. You may not be measuring it as part of your ROI calculation, but you shouldn't ignore it, as it likely will have an impact on the long-term health of your brand.