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Social Media ROI is possible with 7 metrics

July 3, 2013
It’s been said for years that Social Media return on investment can’t be measured, perhaps as an excuse to discount the value of Social Media or from fear of adapting to a new marketing tool. Or perhaps a bit of both.
 
A recent study by the Platt Retail Institute was conducted in association with the American Marketing Association, which compared marketers’ rankings of various channels’ budget allocations against the channels’ perceived importance and ROI. The study revealed that of the 11 channels identified, Social Media marketing ranked fourth in both current importance and ROI but ranks only sixth in budget allocation.
 
As Scott Monty of Ford Social explained in his blog: “The study reveals there’s a mismatch between marketing budget and effectiveness in key areas. Two are mass media and customer support, which are being overspent on versus their return on investment. Alternately, email and social are being underspent on while they have a more effective ROI.”
Social Media’s ROI can be tracked. But the results gained from tracking must be tied back to a business’ objectives to get real return on investment.
 
The following are Facebook objectives and results tracked on a weekly basis by Kathi Kruse, an automotive Social Media marketing expert, blogger, author, speaker, and founder of Kruse Control Inc. 
 
1. Community Growth: number of likes obtained. This metric shows how a page is growing and can be tied in with budget spent on Facebook ads.
 
2. Engagement: number of likes, comments and shares. Content is what drives Social Media success. When content is tracked by how it is received by the audience, the business gets smarter about what to post in the future.
 
3. Total Reach: number of people who viewed the content. This is another metric that can be tied to Facebook ad spending. Facebook now allows advertisers to pay to reach more people. While that is a lot different than even last year at this time, Kruse said that as a Facebook marketer, she is glad to have that available to her.
 
4. Popular Posts: The posts got the highest engagement. This is a useful metric for content curation. “As marketers,” said Kruse, “we always use our best guess as to what the audience is looking for. Keeping track of your most popular posts allows you to give your audience more of what they like. I have a client who shares a lot of content around a certain female service advisor. She’s well known in the community and has a bubbly, enthusiastic personality. Their posts with Mackenzie get off-the-chart engagement.”
 
5. Budget Spent (Facebook ads, software tools, design, etc.). Facebook is not free; one has to pay to play. Those who want to increase their reach must devote a budget for ads. Beyond an ad budget, money is needed for software monitoring tools, scheduling software, photos and graphic design. Since it is actual money that is spent, this is the easiest metric to track.
 
6. Leads: number of leads generated. This is the golden ring. There are two types of leads from Facebook: organic and traditional. Organic leads happen in the comments section of a post. Share a special offer and many times someone will ask, “How long is this for?” or “Do you service Nissans?” Be ready to answer the question and pose another question to keep readers engaged.
 
A traditional lead come from a more proactive approach involving the strategic use of Facebook ads that click through to specific landing pages. There are thousands of ways to use this tactic, which all tie back to the business’ objectives and the results sought.
 
7. Sales: number of sales closed. By their very nature, organic leads will be known immediately by the company’s Social Media manager, who sometimes has had conversations with the lead for months.
 
When using more traditional campaigns with landing pages, it is helpful to have tracking software to know who the leads are so that follow-up can occur.
 
Marketing Channel Effectiveness Comparison, April 2013 (rankings based on survey responses)
Marketing Channel (survey ranking) ROI Budget allocation Current importance Future importance
Direct sales 1 2 2 3
Physical selling location 2 5 5 6
Company website 3 1 1 1
Social media 4 6 4 2
Email marketing 5 8 3 4
Inside sales telemarketing 6 10 8 9
Mass media 7 4 7 8
Call center 8 3 6 10
Digital marketplace 9 9 9 7
Direct mail and catalog 10 7 10 11
Mobile 11 11 11 5
 
 
 

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