How to Measure Social Media ROI - Why it's Difficult to prove, What Tools to Use to Measure, and What to Measure
So do you ever have the argument with internal stakeholders or even your clients about social media ROI, and they say that if you can't prove sale, then what's the point of even investing in social media? Well, today that's exactly what we're going to go over. I'm going to tell you how and what you can measure for your social media ROI.
Why it is difficult to prove Social Media ROI
ROI on social media is not impossible to measure, but it can be difficult to directly pinpoint a conversion to a particular social media activity, which is what most stakeholders want. They don’t care about your engagement, they want to know where their profits are coming from. Social Media ROI has become the bane of any marketer’s existence because there is a gross misconception about what social media is all about from a business point of view.
Unfortunately, most businesses see social media simply as a platform to shout “buy my stuff” to their followers. But that’s not what social media is all about or should be used for. Social media marketing is utilising your social channels to build trust for your business. According to Hootsuite’s Digital Trends 2020 report, search engines are consumer’s main channel used to find out information about given products or services, followed by social media. With younger generations, it’s the other way around, where social media channels are their main information resource. This report makes it pretty clear that social media is one of the drivers you use to nurture your relationship with your customers, to give education them about your business so they can make an informed decision when they’re ready to convert.
“Social media marketing is utilising your social channels to build trust for your business.”
Given that social media is about nurturing relationships and the different ways you can engage with your customer through social media, it can take quite a few touchpoints to get a viewer to become a customer. Don’t just think channels here. Think of each level. For example, on Instagram there are posts, Stories, Reels, IGTV, comments, hashtags that you can approach and engage customers.
You also have to consider the type of offering you have. Are you offering something cheap and a spontaneous buy or service that requires a tick of approval from several stakeholders? Your type of offer can take time to convert. A person could see several of your campaigns over a few months, and then finally commit to a sale. So then which campaign to you pin that sale to?
It all comes down to this - your social media ROI is essentially an overall health check that coupled with social ads and a few sales posts peppered in your social postings, your ROI should gradually over time show your brand and the love for your brand is growing. Your ROI is what stats that give your business value in the digital space. It’s not just about a dollar figure.
How to Measure Social Media ROI
Before you start tracking data, you might need to set up a couple of things on your website to get as much data as possible on people visiting your business’ social pages and website.
ROI v. ROAS
Now, before we go any further, we need to clear the air about something. You might have read about something call ROAS, or Return On Ad Spend. In your Business Manager on Facebook, you can measure the return you receive on ad spend. This is not ROI. ROI is the return on every cent you’ve spent for a given activity. This includes labour costs, production costs, power, rent, etc. ROAS does not include any organic posts you do, its data is strictly based on ads.
Step 1 - Write out your goals
So the first question you want to answer is what do you want to achieve? Write it down, and create a SMART goal if you wish. Remember to be realistic! For an overall strategy goal, I try to keep things fluid. Your strategy needs to be flexible as there are events that can occur that are beyond your control. Keeping your goals fluid will help you evolve and change them with what happens in the business.
Step 2 - Set up your Social ROI tools
Once you’ve written your goals down, make sure you have the right tools set up to track and measure your data. Here’s what I use:
Facebook Pixel - You can set up a Facebook pixel to track how Facebook users use your website. Use a pixel to create audiences based on their activity to retarget or introduce to new products and sales.
Google Analytics - See how customers are entering your site via social and where they drop off, how long they spend on each page, etc. Connect Google Search and Google eCommerce to get the full picture of how people interact with your website.
Campaign URL Builder from Google Analytics Developer Tools - create a UTM take so that you can easily track every post you’re scheduling that has a link to your website. Create a UTM tag for every single post that has a link to a page on your website.
Google Data Studio - Visualise your data so you can see exactly what’s happening over time. It’s a bit tricky at first, but once you get the hang of it, it’s a pretty powerful tool. You will have to connect what’s called “data sources” to bring in your data automatically. Some are paid, and some are free.
Your Third-Party Post Scheduler, such as Hootsuite or Sprout Social - Your post scheduler can give you more robust analytics compared to Facebook Insights.
Step 3 - Track and Review
Once you have everything set up, give your tools a couple of days to gather your data. Then, start having a look and reviewing and creating your reports in Google Data Studio.
Here’s what stats I keep an eye on as a basic start. There are heaps of other stats you can measure depending on what you want to find out about your social media efforts:
Awareness (From your social channels)
Reach
Engagement Rate - how many likes, shares, comments and saves
Followers
Awareness (from your Website)
Sessions
New Users
Source/Medium
Search Queries
Consideration (from your Social Channels)
View watch time, or audience retention
Engagement Rate - what types of comments are you getting? How many likes, comments shares and saves
Link Clicks
Newsletter sign ups
Consideration (from your website)
Number of returning users from each source/medium
Time per session
How many pages per session
Newsletter Sign-ups
Conversion
This depends on your goal, whether that’s a sale or a lead.
For ad campaigns, you’re checking your spend vs. you objective (obviously), but keep an eye on these stats too:
Frequency - Don’t let your frequency get too high
Landing Page views - Find a handy video here on why you should optimise for landing page views over link clicks
Link Clicks
Views at 25, 50 75 and 100%
To wrap this up, We’re sure social media platforms are working on ways to make it easier to measure ROI, but for now, consider ROI for you socials, especially for your organic activities as a health check. For ads its much easier to correlate a conversion to your spend and investment.