Question: “How can we measure the ROI of Social Media?”
Answer: “We can’t measure the ROI of Social Media, it’s just important that we’re there!”
This couldn’t be further from the truth.
Recently, I found my way onto the Radian 6 website. Radian 6 is a leader in the world of social media monitoring and they have countless amounts of valuable resources for download on their website. This ebook caught my eye…
ROI of Social Media: Myths, Truths and How To Measure. I thought it may be like others that just offer a vague description of how one company did this, but it doesn’t even come close to making sense for your organization. I was wrong. This was probably the most exhaustive and detailed publication I’ve read on measuring the ROI of social media. I wanted to take a few minutes and jot down some takeaways from the Radian 6 ebook as well as some of my own thoughts.
Chapter One focused on needing to be able to articulate and justify the business case for social media. I couldn’t agree more with this. I’ve actually talked about this before in previous posts. You can’t just jump into social media, blindfolded, because your competitors are doing it. First, you have to be able to articulate and justify why it’s important for your organization to be there!
Chapter Two spoke to the fact that most marketers are unsure how to articulate social media ROI. They provided a couple interesting graphs to back this up:
It is interesting to note that 48% of marketers who place a high priority on the need to measure social media are now feeling pressure to report the qualified outcomes. Why now? Why is measuring social media all of a sudden important to measure? In Chapter three, Radian 6 tells us it’s because we are entering into the “Early Majority” phase of social media. The “Innovators” and “Early Adopters” didn’t find it important to measure because they knew it was important to be there – and that was a good enough reason for them. But, not now. These “Early Majority” folks, like your boss, want proof. They could care less if it’s “cool”, they want to know if it is going to help their bottom line. And we need to be able to give them a justified, positive answer.
Chapter Four begins to dig into a little more detail. It really focuses on what you need to know to calculate the ROI of social media. The first thing that needs to happen is to set your social media strategy, business goals and objectives. Why? Because the metrics you use to measure the ROI are specific to your organization. What works for Red Bull may not work for you. What works for your competitors may be what you’d like to do, but not necessarily what you need to do. Determining these strategies, goals and objectives are foundational to being able to measure success in the future. Radian 6 says:
“To be successful at social media you have to determine why you are doing it.”
I really enjoyed the section in Chapter Four that dealt with knowing what ROI is and isn’t. ROI isn’t metrics. Yes, metrics are used when determining your organization’s return on an investment, but the metrics are not the end. The value those metrics bring is the end. Radian 6 lays out the ROI equation:
Your metrics will help you determine your benefits and costs which lead to being able to calculate your return. “ROI is taking the metrics and turning them into business benefits.”
So, how does one determine the metrics? This goes back to your goals and objectives. You have to land on what it is you are trying to accomplish before you can put metric tracking in place. Once you do, I recommend using Google Analytics to track the social engagement and goal achievement. There is some extremely rich data here.
This really was just a snapshot of the entire ebook, which I highly recommend you download and soak up.
I think in the past I may have found myself in the “Early Adopter” group – knowing the benefits of social media but not focusing on measuring its effectiveness. I am learning that it is so, so, so important to measure what you’re doing with social media. If you are a Yellow Leaf Marketing client, you’ll see some changes coming in the future related to reporting and tracking. If you’re not a Yellow Leaf Marketing client, I still hope this post has been helpful as it has been helpful to me in simply writing it.
HUGE shout out to Radian 6! You guys rock hard.