Is social media ROI a myth?

Today, we no longer question if social media is just a passing fad. Social media has reached a level of mainstream adoption with 777 million users in Asia Pacific (eMarketer), and most marketers agree to its importance. However, the big question is: How can marketers drive a tangible business performance through social media?

According to an interview with 410 CMOs conducted by Forbes, only 15% of the respondents have seen a proven and quantifiable impact from their social media endeavours. Most marketers still find it challenging to measure ROI and justify their social media expenditure.

In this article, we will be sharing five tips on measuring and managing social media ROI.

Tip #1: Define your ROI

Many marketers zoom in on the dollars and cents when talking about ROI. It’s not wrong, but to solely give ROI a monetary definition is being myopic to the long-term impacts of a well-executed social media strategy.

In defining the ROI of social media, Forrester has identified four factors to consider:

1. Financial: Is there an increase in revenue or reduction in costs?
2. Brand: Has brand awareness and perception improved?
3. Risk management: Is the organisation better at managing a crisis and reputation?
4. Digital: Did the organisation increase its earned and owned digital assets?

Before starting any social media engagement, it’s crucial marketers list the areas (based on the four factors above) where they expect ROI and set relevant KPIs to determine success.

Tip #2: Build social touch-points with your audiences

One of the drivers of conversion is the quality of interaction (or touch-points) your brand has with your target audiences.

These touch-points may include something as impersonal as an unsolicited and untargeted advertisement or an interactive social portal that encourages customers to share ideas they have for your products and services. (For example, “My Starbucks Idea” solicits business ideas for Starbucks from customers. Popular ideas are then selected to be executed.)

Quality and deeper brand interactions are more likely to drive ROI and are also easier to track. It’s important for marketers to think beyond the usual boundaries of social media.

Table 1 below shows 25 use cases of social CRM as listed by research company, Altimeter Group, which are also possible touch-points marketers can build with their audiences. The highlighted boxes are the more commonly applied use cases while the rest are use cases that are under-explored.

Tip #3: Connect social data with business objectives

With the business objectives and KPIs defined, marketers need to set up relevant metrics to measure their success in achieving them. Based on these metrics, a social media campaign may be devised around the intended business objectives and KPIs.

In monitoring and measuring success, some of these analytics and insights tools may be useful:

1. Facebook insights: Track performance of your Facebook page and advertising.
2. Google Analytics, trends, keyword planner and webmaster tools: Suite of tools from Google to measure website traffic, search trends and search engine visibility.
3. Social listening tools: Mine and analyse social mentions on the web and spot trends and track audience sentiments.

For example, if a company has an objective to build awareness for a new consumer product, relevant social data (listed in order of importance) which correlates to brand awareness includes:

1. Emails from users/prospects to customer service expressing interest or asking questions.
2. Product mentions, comments and shares on social media, blogs and forums.
3. Trending searches on the product.
4. Fan acquisition on Facebook.
5. Traffic on website.
6. Clicks on advertisements.
7. Impressions on advertisements.

By assigning weighted values (based on importance) to the above social data, marketers will be able to define an arbitrary parameter for brand awareness and this can then be benchmarked against future campaigns and even sales volume for in-depth ROI measurement.

Tip #4: Integrate and track across marketing channels

It’s common for marketers to leverage multiple digital channels at the same time. Equally common, is a major problem created by “technology silos” where different technologies are independently managed across marketing teams with minimal or no mutual communications. These “technology silos” make it almost impossible to measure the impact of a digital campaign across various digital channels.

There are two factors to look into when attempting to break out of these “technology silos”.

1. Technology: The right technologies can be applied to monitor and track performance across channels. Google Analytics is also crucial in tracking referral traffic to help marketers understand the effectiveness of every channel.
2. Structure: “Technology silos” can be broken by restructuring the marketing team to follow a holistic direction with processes, documentation and communications between teams.

Tip #5: Review and realign goals periodically

In measuring ROI, it’s important to evaluate what worked and what did not work. Also crucial, is the tracking of actionable insights from social media activities – insights that allow marketers to make business decisions.

Marketers should also evaluate which channels to leverage and which platforms/devices to be present on to achieve maximum reach and ROI.

Example: A few years ago when we helped one of our clients to setup a new Facebook Page, the primary objective was to acquire fans. After a year, when the number of fans was at a decent level, we shifted the focus of ROI measurement to lead generation and engagement and fan acquisition was given less weight. Currently, after rounds of goal realignment, we have other ROI metrics like brand perception and conversions adding maximum weight to the mix.

ROI is all about defining tangible objectives and metrics around them. Marketers who are able to get a grasp on the numbers as well as understand their interrelation will be better equipped to define (and redefine) goals, and structures more effectively, ROI-driven social campaigns and tracking strategies.

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The article is written by Leon CK Leong, chief business development officer, TO THE NEW. 

TO THE NEW is an end-to-end digital services network specializing in SMACK Services (Social, Mobile Analytics, Content and Knowledge). With a client promise of ‘Online For Your Bottomline ’, TO THE NEW believes in helping clients use social and mobile media as business enhancing rather than mere advertising. TO THE NEW’s expertise is underpinned by proprietary products and global partnerships in the space of social analytics, digital media, cloud services, social CRM and big data.

TO THE NEW houses digital brands like ThoughtBuzz, Techsailor, Ignitee, IntelliGrape and Tangerine Digital under its umbrella and collectively manages the mandates for 150+ clients in Singapore, Malaysia, Philippines, China, India, UAE, Europe and the United States.