Can You Measure Social Media ROI?
by Liz Plachecki
Most small business owners already understand that social media is a good idea. If they haven’t discovered this fact on their own, they’ve gotten valuable insight on the topic from a social media consultant. The potential for both connectivity and visibility is enough to convince most business owners to give social media a try. But how much time and effort is it worth? The only way to evaluate its effectiveness is to assess the return on investment (ROI). You might be thinking, “That’s nearly impossible for social media!” But the truth is, there are several proven methods for measuring social media ROI that are, in fact, pretty straightforward.
First, in order to calculate social media ROI, a small business must have clearly defined goals; with no baseline, metrics are meaningless. If you’re at a loss for developing social media goals, consider working with a social media consultant. When it comes to metrics, instead of putting all of your energy on reaching specific numbers, concentrate on where the numbers lead. For example, are you generating more sales through higher numbers of website visits? Do social media users click through to your product pages? Some social media channels, such as Facebook, have their own metrics tools. There are a number of other resources, like HootSuite and Google Analytics, which also provide valuable page metrics.
Many companies struggle to assess interaction because likes and impressions have significantly changed the way we measure this concept. However, interactions are still just as relevant as ever. On average, it takes a Facebook user seven seconds to “like” a post while it takes close friends of a particular user five seconds to take in this information about the “liked” post. What does this mean? Consider how many “likes” a post receives and then multiply it by the number of friends of the users who “liked” the post to get an idea how many people viewed the post.
One of the most effective ways to analyze website analytics is to measure them against pay per click, or PPC, campaigns. How much does a PPC campaign cost per person on average? How does this cost compare to the number of visitors that you get from free social media content? This comparison allows a company to assign an amount of money to the traffic that comes from social media.
Keep in mind that there’s no perfect system for measuring ROI. But no matter how you choose to evaluate your efforts on social media, your measurements will undoubtedly reveal current trends, which can be used to develop standards for measuring future social media initiatives.