Pretty much any company worth its salt is engaged in using social media in some capacity for business purposes at this point. As someone who has built a solid consulting agency using social media and content marketing, I can attest to the value of it holistically.
But as with any marketing channel, return on investment comes into the conversation especially when discussing social strategies with medium and large business clients. Businesses as a whole have become metrics obsessed, and the day of saying we “have to do social media” regardless of the numbers is past (for the most part).
So how exactly does one measure social ROI? Is it even possible, or should we be evaluating its performance in some other way?
Social Media and the Buyers’ Journey
From an SEO perspective, it is critical to make a website easy to use, navigate and crawl (for search engines to index the content). However, there is a whole separate angle that matters for marketing and sales.
A good website will help usher visitors through the whole buyers’ journey, sales cycle or decision process, depending on which catch phrase you use to describe it. In years past, you could expect to control how the buyers’ journey experience played out. In many cases you could rush the visitor along toward conversion while still on the website.
Fast forward to 2014. That old “control” model no longer works. One of the biggest changes that social media has introduced is a transfer of control of the conversation. Now the visitor has a great deal of control over what they want to consume, what works for them and where they will find the information they need to make an informed purchase decision.
Given that mindset, social media naturally changes the focus from website to web presence. It’s not about how you maneuver the on-site experience. Your web presence is pervasive, extending to social profiles, review sites and even word of mouth.
While you do not control the whole conversation, you have a golden opportunity to influence it. You have to provide the information needed at all stages of the buyers’ journey, so prospects can find it themselves during the research phase. It requires a leap of faith, in that you must deploy a lot of content and features on the website before you can truly test effectiveness.
So if you only have influence, not control over the conversation, how in the world can you measure ROI with any level of certainty?
Different Metrics for Different Social Tactics
This is where it gets tricky. The old model of correlating a user behavior with a revenue generating conversion is fast becoming old hat.
Users will find you on social media, visit the website, ask friends what they think of you, read reviews and do everything they can to be informed before they ever allow you to talk to them. Most users don’t want to talk to you until they’ve already whittled their list of potential solutions down to the top three to five. By the time they actually engage with you directly, they are typically very close to asking what the price is.
The important thing to remember is that when managed properly, social media plays a very similar role in your sales process that PR does. It can help build awareness, drive consideration, build a list of prospects and -- sometimes when things fall just right -- close a sale. But for most companies the majority of the value it provides cannot be directly attributed to revenue.
If you force the issue and try to make a one-to-one correlation, you will be very bad at social media marketing. Nobody gets on a social network to be pitched nonstop. If that’s your game, you might as well stick with the old school tactics.
My main point is this -- when you are deciding how to market yourself using social media, think about what you can truly measure to benchmark success.
Follower count has taken a beating in recent years because it can be gamed. While that is a good point in the grand scheme of it all, it can absolutely be a useful metric if you play by the rules.
If you do a lot of content marketing and inbound, then you can measure success in several ways: number of visits to the page/post, volume of shares/likes, and even new followers or subscribers. This is the whole point behind word of mouth marketing -- activity is the goal.
Many of you are probably reading this and thinking, “Sure Tommy, that will go over well with the C-Suite at my company.” That's a great point. Let’s look at how to make the leap from tactic-level measurement to return on investment.
The Answer = Multichannel Attribution
Everyone wants to understand ROI for social efforts, but precious few of us have invested in properly attributing conversions and revenue back to multiple touch points. For years, we could push out PPC ads or some other tactic that succeeds at driving conversions and call it a day.
You can still do that, but it's an incomplete answer. Especially in B2B, it is very rare that a prospect will find you for the first time via Google AdWords and convert immediately. In most cases, they will see your ad and do some research first. Such is the impact of two decades of wild-wild west spamming, scamming and malware on the internet.
So with the understanding that conversions hardly ever come on a first interaction with your brand, the only reasonable answer is to measure back as far as you can before the conversion happened. This is not rocket science for those of us with more advanced analytics packages like the Adobe (formerly Omniture) Suite, but it does require a good amount of setup and investment to get it running properly.
In the end, you can absolutely provide an ROI against your social media efforts. The issue is that it won’t be a direct correlation, but rather a contributing factor to a conversion via some other channel.
This is a key reason that Google has been working to build in the various multi-channel funnel and similar views within Google Analytics. At some point, they will get it right and everyone can benefit from it. It makes sense to start thinking about how to embrace attribution now, because those of us who are doing so are already a couple of steps ahead of the competition.
I chose to focus almost exclusively on using social media as a marketing vehicle in this article. From that perspective, it can be easily tied to ROI if attributed properly across other marketing channels. Of course, there is also the customer service piece of social business, which is much easier to measure using data points such as lifetime value, retention rates and customer satisfaction scores. It’s high time the business world gets serious about folding in social metrics within their reporting structure for demand gen and lead gen. This is the only way we will truly understand its impact on ROI, so we can start cutting through the time wasters to focus on the areas where we best advance the bottom line on behalf of our companies.
How does your company measure the return on investment for social strategies? Have you figured out how to attribute properly across multiple channels?