Guest Wise Dame Susan L. Brown for Brown & Associates
ROI for social media and communities is the “elephant in the room.” Everyone wants a definitive answer to how to evaluate return on investment. Also how much investment is enough? What are the resources needed? What kind of social media is effective and why?
Addressing these questions is the first step to defining Social Media ROI.
Context is everything
The first issue to realize is that while social media and networking communities are new vehicles, however, they must be evaluated in context of each company’s business model, objectives, market and customers. Without this context there is no objective way to determine the value of social media and communities in a business situation.
What are these vehicles and why are they different? Mainly because the value of social media is interactive and immediate feedback as well as “user generated content,” a marketing-speak way of saying the content includes a dialogue with participants, instead of the advertising model where copywriters create text and readers are passive recipients.
Success in online marketing hinges on effective budget allocation and marketing mix decision making. Practitioners and executives must be able to identify the marketing campaigns and assets that help drive the business’ top and bottom lines, and invest in and optimize them accordingly. This of course requires access to comprehensive, granular, and accurate web analytics data with which marketers can measure campaign performance and understand the complex website and social media behaviors of prospects and customers. Performance measurements should not occur solely within the confines of individual channels and campaigns. The best online marketers measure performance and ROI in a comprehensive view that comprises all online channels, be they social media, paid and natural search, email marketing, banner or display ads as well as lead generation webinars, opt-in advertising campaigns, website content, coupons, contests, blogs, videos, etc.
Social Media Benefits and Risks
6 Key Steps to Determine Social Media ROI
- What are your purposes and objectives?
- To introduce new products and services?
- To provide customer support and/or reduce call center expenses?
- To generate leads?
- To create customer, partner, patient communities as a vehicle for engagement and retention?
- To create internal communities or collaboration portals for employee retention, engagement and to add to innovation?
- To use communities to increase revenue through coupons, contests, direct sales?
- Can you use social media to sell directly?
- What elements of social media would be most important and yield greatest benefits and ROI for your business?
- Customer, Partner, Patient, Internal Communities
- Facebook page(s)
- Twitter campaigns
- Online ads
- YouTube Channel
- Budgeting and Resources?
- Determine % of Budget for Social Media (Consider 2-5 % of marketing budget to start)
- Content creation; at least one dedicated FTE per blog, or vehicle; or outsource?
- Participant response: at least one dedicated FTE per blog or vehicle; or outsource?
- Creating On-Going Content; What Content aggregation, lead management or listening tools to use?
- Social Mention
- What to measure?
- Website click through, Page views, downloads, etc.
- Community/Fan page followers; membership, referrals, etc.
- Social media activity; Community, Facebook, Twitter retweets/ activity/responses, engagement
- Online ad follow through (leads, conversion to sales, etc.)
- Lead results (qualified leads, scoring, contacts, registrations, etc.)
- Customer or user conversion
- What analytic/measurement tools to use?
Don’t Miss–Part III: Judging Social Media Success
(C) 03/2011, updated, 1/2013; all rights reserved. This article may be shared in part or whole with credit given to author and link to Brown & Associates