MEASURING ROI ON DIGITAL SPEND

INTRODUCTION

When it comes to social media marketing, there is perhaps no other topic that is discussed more than determining and reporting return on investment, or ROI. Marketers intuitively understand that building marketplace awareness is essential. Obviously, your customers need to be aware of your brand, product or service in order to buy it. But awareness and brand building aren’t enough. Businesses like retailers that frequently have a presence both offline and online have numerous variables to factor into ROI, such as point-of-sale information and online purchases. Capturing and interpreting data from multiple, and sometimes disconnected, sources can add additional layers of complication.

WHAT IS ROI

Return on investment (ROI) simply refers to the idea that something of value has resulted from an investment of time, energy, or money. In financial circles ROI usually is reduced to a formula.

ROI is calculated by simply subtracting the cost of an investment from the proceeds received from the investment, divided by that same investment cost

ROI = Benefits - Costs x 100 = Percentage Return on the Investment Costs

WHY ISMEASURING ROI IMPORTANT

Proving the value of social media to your organization’s overall goals and business objectives

Allowing you to clearly see where efforts and resources are being used efficiently

Enabling you to evaluate where resources are being wasted, or not used as efficiently as possible

Allowing you to recognize gaps in strategy, key messages, and content Showing where your social media budget is being used most effectively, and

showing areas where it can be pulled back

DEFINE YOUR METRICS

Online engagement Website registrations/downloads Average engagement time Online sales/donation volume Sales/revenue growth Market share

QUICK STEPS TO MEASURE ROI

So how do you align your social media efforts with your business goals? Let us attempt to simplify the process into three steps:

1. Decide which metrics are important.

2. Measure the metrics.

3. Check your results against your goals.

1. DECIDE WHICH METRICS ARE IMPORTANT

No campaign can work based on the overall strategy alone. For the campaign to be meaningful and measurable, you need to break down your big picture into smaller bite-sized goals. Each of these goals can be measured using specific social media metrics like: Reach Engagement Traffic Conversion

2. MEASURE THE METRICS

Nearly every metric is measurable if you adopt the right approach. Tools- Most social media platforms offer some form of native analytics suite

for corporate account users (e.g.,  Facebook Insights and Twitter Analytics). Tracking- The trick to tracking social media metrics effectively lies in

identifying the some equations. Reporting

3. CHECK THE RESULTS OF YOUR GOALS

This is the final step, where we get the proof of the pudding. Compare the results achieved against the goals laid out, and measure the surplus or shortfall in numbers. ROI is a function of your marketing costs vs. the net profits you generate from social media:

ROI MEASUREMENT.

Define relevant success metrics that translate into a business context.

I. Quantitative - sales (obviously), new leads, new qualified subscribers

II. Qualitative - satisfaction, loyalty, authority, interaction, feedback . Set campaign goals based on these metrics. Your return is successfully

meeting or exceeding these goals. Implement campaign, review metrics and goals. Filter out channels and

strategies that don’t get good returns. Repeat.

QUALITATIVE Followers/fans Engagement Timing Click-through rate

QUANTITATIVE Influence Sentiment Conversion Drivers

…OTHER MEASUREMENTS

If you’re measuring to the goal of protecting your reputation, you report online sentiment, Q-scores, positive vs. negative articles ranking in search and the like. That’s your return.

If you’re measuring to the goal of building community, you report on size and scope of the community. You can also report on how much the community spends vs. those not in the community, so there can be some revenue discussion. But you report community metrics.

If you’re measuring public relations, you report on public relations measures like successful messaging resonance, media relations hits, community partners engaged and so on. That’s your return.

If you’re measuring to the goal of facilitating customer service, you report on things like cases handled, solved, customer satisfaction and the like.

If you’re measuring to the goal of research and development, you look at new products or features created. You can also then track and measure revenue derived from those new products or features. Or even cost savings from conducting research and development in the online space vs. outsourcing to a market research firm.

And if you’re measuring to the goal of sales or leads, you look at revenue in, conversions, sales, etc.

SOCIAL MEDIA MEASUREMENT TOOLS

Google Analytics

Salesforce: Hootsuite Analytics Facebook Conversion Measurement

TOP REASONS TO MARKET ON SOCIAL MEDIA

Brand awareness and top-of-mind recall Website traffic Customer acquisition Customer retention Brand advocacy

THANK YOU