The How & Why of Social Media ROI, part 2.


The second in a series of articles for work, focusing on social media ROI and attribution. Please click through the hyperlink below to read the first article on my company’s blog. 

How to Measure Social Media Effectiveness

Every business is responsible for a given outcome. That’s especially true for marketers. This can be an especially difficult expectation, because so much of what marketers do is nebulous, or dependent on other people (i.e., the consumer). Projecting a return on investment to a client can be scary, but it’s a necessity in any advertising negotiation. Marketing is a business.

A subset of marketing, social media marketing, is even more precarious, as I discussed in the previous blog in this series. Even more so, the metrics needed to adequately calculate the success of a social media campaign are different for each business. For example, a successful social media campaign for a B2B business will look different than one for a customer-facing brand. That’s why there isn’t just one answer to how or what to measure in social media. Let’s start by taking a look at what most businesses on average look at when measuring social media effectiveness:

  • Increase brand awareness
  • Drive leads in the pipeline
  • Drive traffic to website
  • Reduce customer service cost
  • Improve customer satisfaction
  • Improve customer retention and loyalty
  • Increase sales

To be successful in social media, you have to first figure out why you’re doing it. What are your goals? What are your objectives? What is it that you want to accomplish? Businesses often have trouble understanding which business objectives social media can achieve and are not sure how to incorporate social media initiatives.

In order to determine the value of your return, you must decide what your return is going to be. Is your goal to increase awareness for your brand? Is it to support customer service? Or is to actually increase your sales numbers? Once you’ve defined the “R” in your “ROI,” you can create the metrics and KPIs needed to measure the return on your investment.

Metrics and KPIs

Metrics and KPIs (or key performance indicators) are often confused for an ROI. Instead, metrics are how a company shows a positive or negative change in a given campaign. Metrics are numbers that indicate that change. KPIs are predicted events in a given campaign that prompt a given action. Let’s take a look at how metrics and KPIs look when evaluating the effectiveness of a social media campaign.

On Facebook, the number of likes, shares, comments, and posts that are generated by your Facebook page are all quantifiable metrics that can be tracked on a daily basis. Depending on what you want your social media campaign to accomplish, the desired trend of each specific metric may be different. However, a successful campaign generally seeks an increase in all metrics.

Those metrics, when compiled into upward and downward trends, can be used to determine the KPIs of your campaign. For example, the average number of Facebook likes for your page may trend upward to an average of ten new likes per day. Hitting that average is a key performance indicator, indicating that your community growth is accelerating at your desired rate.

To put it simply, metrics indicate the success or failure of your predetermined KPIs. KPIs, when looked at collectively, help determine the return in your “ROI.” Metrics communicate key performance indicators, which measure the value of your return.

Sounds Fun, Right?

It’s really not that difficult. Now that we’ve discussed the inherit difficulties of calculating a return on your social media investment and the specific definitions needed to determine what a return will look like for a given campaign, we’re ready to see what a full ROI calculation looks like. Join us next time for “The How and Why of Social Media ROI: Part 3” for an in depth look at a real-life ROI calculation.



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