Video Infographic of Social Media in 2011
Many organizations do not completely value social media as a form of increasing their customer reach. In fact, the reason why many companies hesitate to utilize social media as a medium is fear of losing control. However, with the right channels and professionals in place you can engage with businesses and consumers alike. You would be surprised how quickly you can reach a customer!
This short video infographic video highlights the importance of social media to your business. Whether you are a small business or a large corporation the rules apply equally:
The Financial Impacts of Social Media ROI
So in my previous post about which metrics to track for social media ROI, I explained the different aspects that you should consider when it comes to your social media networks. Taking these metrics into account, we were able to create conversation rates, amplification, attraction, view ability and click-through rates. It is important to watch the trend that these rates follow and look into any dips and peaks – what caused the conversation to decrease or what type of content resulted in better amplification, etc. – but for many companies this will not be enough. It is nice to see improvements in social media but your end result needs to be cold, hard cash money! Most brands use social media as an avenue to drive sales and therefore need to use these metrics to truly figure out what their social media ROI is.
This is where you will need to gain some web analytical skills if you do not already have a background, or maybe you have someone in your company who specializes in it (even better!). Before I jump into how you can track your social media success on your website, it is important to understand that some of your social media efforts could result in in-person sales, especially if you are a physical store. If this is the case, run coupons or specials that have specials codes or are directed only to specific social network audience. This is a great way to figure out if your efforts are being utilized by your audience…plus who doesn’t enjoy a nice discount coupon J
When it comes to discovering your social media ROI that is restricted to the web, you have to really analyze your website. First of all, if it’s an e-commerce site then that is awesome, this will make things a little easier. But for non e-commerce sites, and maybe even some e-commerce sites, you have to really dig in deep and figure out what you want your audience to do on the website. What is the end result that you are looking for? Do you want them to contact you to find out about your product or pricing? Do you want them to sign up for your newsletter or blog RSS so that you can keep them in the loop with information? There are many purposes of a website so you really need to figure out the purpose of yours.
After analyzing your website and figure out what end results you want (aka conversions), it is time to set up goals on your analytics tool. There are many different tools such as Google Analytics, Yahoo Analytics, Omniture, etc., but they should all allow for you to set up goals. For e-commerce sites, you’re end goal is to sell product so set up goal that gets counted every time a user checkouts and buys some product (you can even go and create values for the goals and products, allowing you to really see how much income is being created). For the non e-commerce conversions, such as contacting you or signing up for a newsletter, create thank you pages and set up goals to track when users do either of those and land on the specific thank you page (after some time you can start analyzing how many of those conversions have lead to sales and calculate an estimated value for each goal).
Once you have these goals set up and running, you can begin segmenting your data with the analytics software in order to see which social media sources had the highest goal conversion rates (and if available, the goal value per visit from that social network).
*Side note: ROI is return on investment so it would also be beneficial to compare and analyze the income that you believe social media has accounted for with the money and time invested on your social media efforts.
I also like to note down the number of new leads and total revenue per month and analyze the trends for these values. Discover when and where you were bringing in the most leads and income. You should also document, when you are not bringing in leads and income. Compare this to your social media metrics for those same time periods. For example, let’s say you have a huge jump in monthly income in October and you look at your social media metrics and notice that your engagement rates for Facebook were at a high point, it’s a no brainer, start to analyze those metrics! See what you were doing and what type of content you were sharing during that time period on Facebook. It could be that you were running a campaign that worked wonders for your organization!
If you put your thinking caps on, you can discover your social media performance, as well as the best tactics for your organization. This process is by no means an easy one. It will take time, and you may even have to discover other efficient ways to calculate financial ROI. So I ask that you please share with our readers through the comment section! We also understand that these concepts are sometimes confusing so feel free to leave us questions or contact us if you would like us to explain something in more detail.
Metrics for Social Media ROI
Whether you are an agency or an in-house social media specialist, you are bound to have clients or supervisors barreling down on you for the ROI on social media. The single most common question that is addressed to all social media experts is: How do you determine the ROI of all of your social media efforts?
I am going to give you tips on how to measure your metrics, but with the caveat that currently there is no real ‘formula’ to calculate ROI on social media. This post will provide you with ideas to create metrics that you can implement and modify for your organization.
After conducting thorough due diligence on how to effectively measure and evaluate ROI, I came across a very reputable expert in the market, Avinash Kaushik. He has had the most influence on the way I think about analytics and ROI.
Let’s start with the basics. Always keep an eye on the general metrics such as Facebook page likes, Twitter followers and total interactions. Evaluate the amount of interaction you have on your social media network per users (follows, likes, subscribers, etc.). This helps to determine the significance of your social network community. There is no point in having well over 10,000 followers on Twitter when you only have interaction with about 5 users. It is great to build both a strong fan base and following but it is just as important to ensure that you are consistent in engagement.
Total interactions are easy to calculate for Facebook through their ‘Insights’, however, it will take time when you are collecting data for other social networks. For example, Twitter will require that you add up the total number of times you were re-tweeted, mentioned, included in a hashtag, and added as a favorite tweet within the time period that you want to analyze the data (daily, weekly or monthly). For other social networks you may have to consider the number of shares, comments and likes, so make sure to take the time to determine what you truly consider an interaction for each network, respectively.
After you are done with the steps outlined above, you want to now break down the ‘interactions’ of your social networks. Focus on how users are interacting with the content that is presented. Here is where I will use some of Avinash’s terminology and ideas, while introducing new ones as well. According to my own analysis, consider focusing on the following factors: conversation rate, amplification rate, attraction rate, view ability rate and click-through rate. Let’s get started!
Conversation Rate
This is the true engagement for conversations in your social media communities. Conversations will be different depending on the network. For example, Facebook, Youtube, and blogs are focused on comments; however, Twitter is measured with mentions and hashtags. Calculate the figures for each network, and calculate how many conversations took place per post, tweet, or video submission.
Amplification Rate
This is the total number of times that your content was either shared or re-tweeted. Calculate the number of times that your posts or tweets were shared and determine the rate per post. You can take this one step further, and determine the reach of your content. Every time your post or tweet is shared, it is available for an entirely new audience, expanding the number of eyes that could potentially see it. You can also investigate and see what type of content is being amplified the most. This will go a long way in helping you understand your community a little better, and the type of content that interests them.
Attraction Rate
Ensure that your content is attractive to your market. Calculate the total number of likes or +1’s per post or the number or tweets that were added as a favorite per total tweets. The more that people like what you have to say or share, the more that people will care.
Viewability Rate
This stat is a little harder to find on Twitter, however, for other networks and mediums such as Facebook, Youtube and your blog, it is the total number of views or impressions per post. This is not as important as the other metrics listed above, but it is always nice to see how often your content is being looked at and if no one is seeing it, then you better find a way to get users to view it!
Click-Through Rate
Everyone shares links, whether it is a blog post, a highlighted product or content that you found on the web. However, there is no sense in sending and receiving links, especially in hopes that the end user will click on it. Efficiency is the name of the game; so I recommend using bit.ly, to help you keep a track of your outbound links. After you set that up, use this as a tool to figure out how many clicks you are receiving per link, measuring which content and times are best for content distribution.
Now that you know what metrics to follow, create an excel spreadsheet that will allow you to keep track of your social media networks. You will notice that some of the numbers will pose as a challenge, as you will be calculating them manually. Consider searching for tools that will allow you to calculate statistics that show your analytics. If you are a large brand, this is not a request it’s a requirement. If you have any suggestions on which tools work well for you, please leave a comment. We are all about collaboration.
Now that you have a method to organize your social media metrics, it is now time to determine the true financial impact for your brand. Check back for the second part of this post to find out how these numbers and conversion rates can help you determine your actualized ROI. You can be ambitious and contact our team; we can help you with your social media needs! Contact us!
