All good marketers want to know what exactly they’re getting when they sign their names checks. Televison advertising sells you on the promise of viewers thanks to metrics like the Nielsen ratings. Outdoor billboards can point to the data behind the high number of vehicles driving along a busy road on a given day. But what about social media? That’s a different animal entirely. A scary, unclassified, sometimes untamable one at that.
Since its burst on the scene as the next big thing in marketing, social media has lacked an established industry standard on measuring ROI, causing many companies to adopt a wait-and-see approach in terms of their spending. A good number of these organizations even forego any investment (the “I” in “ROI”) altogether because of a belief that “social media is free” since all you need is an email address to sign up. When they build it and no one comes, though, the entire medium is written off for its lack of effectiveness because they’re not seeing any return. The reality is, without investment there is no return. Especially in social media.
The biggest fault in measuring social media ROI is typically a lack of strategy. There are simple metrics that can be used to measure social media, such as traffic, pageviews, clicks and the size and growth of your social communities. Facebook, Foursquare and others all offer businesses with their own set of analytics as well. But when it comes to tracking revenue, monitoring conversions and measuring average order value, things become a little more complicated.
Marketers need to sit down and decide what the end goal is for using social media. Is it simply to increase awareness or is the plan to generate some sort of action from the user? Is increasing referrals or sales the priority? Is it getting votes in a contest or poll? Figuring this out will help you determine what behaviors or insights you should be keying in on to reach your objectives and goals while also giving you guidance on what the tone and voice for your brand should be in your messaging.
For example, if you’re a health care organization that’s hosting a health screening and your goal is to solicit more registrations, create a Facebook event that you promote on your company page and with Facebook ads. Monitor the number of people who RSVP and cross-check that with the number of people who show up. Be sure to follow up with those who attended for any insight on their experiences. For the no-shows, try to find out why they couldn’t attend. This gives you data on the number people who indicated they were coming and the number of people exposed to the message. Compare that data to the numbers from the actual turnout.
It’s also important to make sure your social media strategy goes hand-in-hand with your other marketing objectives. If your goal for a mass media campaign simply is to generate awareness for a service, it’s not fair nor does it make much sense to expect social media to be a referral generator.
As always, it’s also important to do your homework to determine if social media is the right place to be devoting time and resources. Do your research and get a feel for what your customers want from you and create your plan accordingly.
The bottomline: If you’re not willing to invest in the research, strategy, content creation and promotion of your social media efforts, don’t act surprised when there is little return.