Social media is all about interactions. Those interactions leave traces in the form of consumers’ data, often defined by marketers as “priceless” in terms of value. But is the quantity of data a strong enough KPI/metric to justify the time and resources companies dedicate to their social media efforts? As Mai described in her last blog post, the tremendous amounts of data can sometimes be overwhelming, causing brands to fail in their attempts to transform it into meaningful business insights. Moreover, even though brands’ growing participation in social media already has been a tendency for the last couple of years, a universal formula to translate the outcome of the time and resources invested into the language of a standard marketing monetization perspective has not yet been invented. The confusion on social ROI might remain the same unless social media professionals stop trying to evaluate their online efforts the same way they measure the success of their other marketing activities.
First and most importantly, a very significant notion for brands is that they must start viewing social media ROI metrics as a list of intangibles that have the potential to deliver way more value rather than simple “return on sales” type of tangible measurements. This means that instead of evaluating their social media efforts by analyzing quantities (numbers of “likes”, “fans”, “followers”,”pinners” etc.), brands should focus more on qualitative metrics which are open to adjustments and improvements over time. Following are four of those metrics for measuring social media ROI, which we see as of great importance.
1. Brand Awareness
Brand awareness relates to how a brand’s exposure throughout different social media platforms leads to a significant increase in the number of people recognizing the brand’s identity and attached attributes (logo, colors, slogan etc.). That metric is usually associated with standard quantitative measurements (number of “likes”, “followers” etc.), but a deeper analysis will provide marketers with more valuable business insights.
Using Google Analytics to track down the number of users who, referred by social media channels, visited the brand’s official website, will outline which channels are beneficial as traffic boosters that have the potential of leading to increased sales. Additionally, analyzing real-time social media sentiment, by using social media management systems to track down all mentions of the brand’s name, will provide insights on the brand’s reputation and how its name is being perceived. That is one of the greatest opportunities of social media – marketers can obtain “first hand” information if customers are talking about the brand in an either positive or negative way.
2. Reach & Engagement
An important metric to measure is the levels of reach and engagement. Marketers should define KPIs (Key Performance Indicators) related to conversations, re-shares, recommendations and reviews etc. That metrics’ value lies in the possibility of real-time content analysis and its influence. Using a set of social media management systems, such as Falcon Social, to measure the levels of reach and engagement, brands can easily observe which content performs best and thereby adjust and improve their future strategies.
Moreover, analyzing conversation rates leads to a faster identification of potential influencers and brand ambassadors. Building a strong relationship between the brand and its most loyal customers cannot only lead to further expansion of awareness, due to peer-to-peer recommendations and positive reviews, inspired by influencers’ motivation to speak for and defend the brand. It can also open doors for crowdsourcing: the next metric in our list.
Another very important metric of social media ROI is the percentage of cut costs from companies’ R&D (Research and Development) and Innovation activities due to crowdsourcing. A strong relationship built between the brand and its most loyal fans and followers via diverse social media channels assures that brands are no longer obliged to rely only on their R&D and Innovation teams for the creation and improvement of their products/services. Their most loyal social media followers will be happy to get involved in those processes basically for free, led by their true likelihood of the brand in general and psychological need to take part in creation processes. Furthermore, it’s not only the cut of costs; another important KPI is the amount of ideas on top of the pipeline: the more generators, the larger scope of suggestions.
4. Business intelligence
This metric refers to measuring the effectiveness of a brand’s own social media activities in comparison to that of its competitors. Marketers can monitor the performance (reach, engagement rates, sentiment etc.) of their rival companies with help from social media analytic platforms, such as SocialBakers. Additionally, that comparison and positioning allow brands to evaluate and adjust their future strategies in order to optimize their sales.
Social media ROI will undoubtedly always remain of great importance for all industry-related professionals. Despite the many discussions that measurement of ROI is a hard task, we believe that brands, who truly believe in the power of social media, can follow the above-mentioned key metric points as guidelines for initiating their strategic KPIs and thereby secure successful ROI from their activities.