According to the latest survey from TrustRadius and numerous other recent surveys*, measuring return on investment from social media is the number one challenge for social media teams:
In addition, the latest Australian Sensis Social Media survey reported that the number of medium and large businesses tracking social media ROI has dropped in the twelve months leading up to May 2015.
This means that less than one third of Australian businesses measure ROI and this figure is decreasing.
There have been numerous reports highlighting that social media ROI and alignment to business objectives is a major challenge for social media and content marketers. Refer to the end of this blog for more sources of information*
In this blog we attempt to provide ROI metrics that can be used to report to business executives and marketing. In addition, Results 2Day has created some examples metrics to assist with the business goal alignment. You, can access the sample social media ROI metrics here
Typically social media objectives align to business objectives in three main areas:
- Brand awareness
- Customer acquisition
- Customer satisfaction/retention
Unfortunately there is often some confusion measuring customer acquisition. Acquisition typically refers to new customers to the business. However social media marketers often see acquisition as new social media subscribers. Measuring an increase in sales can often seem daunting, as TrustRadius indicates:
In this blog we have differentiated between business social media metrics and marketing social media metrics for the sake of clarity.
Typical social media metrics that may align to business objectives are:
Brand awareness – is the brand being noticed in the market? What share of voice does the brand have? Metrics, to be considered include:
- Share of voice
- Reach – across the whole of social and broken down into platforms
- Engagement and advocacy rates over time
- Online reputation scores
- Brand sentiment (note: refer to sentiment analysis blog for types of sentiment analysis tools to utilise)
These metrics are more useful when compared over time or compared to competitive brands to achieve a frame of reference
Customer Acquisition. Social media can be utilised throughout the sales cycle to
- Gain insight into your buyer persona or target prospect group and discover influencers
- Identify brand advocates, engage, leverage for references or convert to customers
- Use Enterprise Listening to as a lead generation tool, to track intent to purchase, reach out to prospects and convert them to customers
- Track click-through-rate from social media platform to website to sale using Google Analytics
- Listen at the point of need, follow and intercept competitor conversations, and discover opportunities to directly engage.
- Create a social media ROI based on conversions to sales
However, the only metric that will interest the business is number of incremental sales achieved. The bonus here is that this number on its own can justify the social media investment.
According to Hubspot, social media leads have gained more popularity than any other lead source:
Accurate sentiment analysis is crucial when measuring customer satisfaction. (Refer to this blog: sentiment analysis blog, which describes the sentiment analysis methods to look for in social media tools. Metrics to consider for customer satisfaction include:
- Brand sentiment compared to competition
- Advocacy rate
According to TrustRadius the goals for the social media team vary by company size:
In addition to business metrics, marketing metrics still need to be tracked to ensure that marketing activities are successful and information is obtained to ensure that campaigns are continually improving. Some useful metrics include:
Awareness – measure which social channel reaches the largest potential audience
Acquisition – measure changes in brand social channel followers/subscriptions
Activation – measure changes in engagement and advocacy rates
Campaign success – measure sentiment, verbatim and keywords before and after the campaign to determine campaign success (please ensure you utilise a natural language processing tool or human measurement for sentiment analysis)
The latest survey, released last month entitled, Social Media in Australia indicated that Australian business use the following metrics to track their social media investment:
The most popular metrics are brand awareness metrics, followed by sales. Sentiment is the least utilised metric (which is probably because most social media tools utilise keyword methodology, which is inherently inaccurate).
Sources indicating ROI challenges*
Most social media marketers are struggling to track return on investment from social media. In the latest TrustRadius survey, measuring social media ROI was cited as the number one concern for social media marketers:
TrustRadius goes on to explain that..
Altimeter’s March 2015 report findings state:
Last year, Altimeter found that the majority of marketers identified as measurement as the number one area for investment in the year
The latest survey released this month from B2C: Benchmarks, Budgets, and Trends— North America states:
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