Social media is an important tool for companies looking to increase brand awareness and engage with their target markets. Businesses that invest a great deal of time and money into their campaigns on Facebook, Twitter, and other social networks must be able to quantify the impact these strategies have had on their ROI.
Determining and measuring metrics for social media marketing ROI can be a complicated process. Often, a glut of data can be as unhelpful as too little information; therefore, before launching social media campaigns, companies should pinpoint the most important metrics, or key performance indicators (KPIs), to measure throughout the process.
Choosing the Right Metrics to Measure Social Media ROI
To decide which metrics to use in their social media evaluation processes, companies must first determine their goals for each campaign. Is it to increase traffic to the company’s website? To lengthen the amount of time spent on a specific page? To improve the audience’s general impression of the brand?
As they decide on which metrics to measure, businesses should consider factors within several of the phases of the sales funnel, including:
- Awareness. From advertising to branding to contests, companies use a multitude of methods to raise awareness. Common metrics to measure this characteristic include frequency, reach, and impressions of a campaign.
- Interest. To create interest around a product or service, businesses use their Facebook pages, social media advertisements, and content marketing (often in the form of keyword-optimized social media posts). Clicks, “Likes,” shares, comments, and click-through rates all indicate the scope and success of an interest generation campaign.
- Desire. Brands employ numerous techniques to raise their desirability quotient, such as marketing automation, retargeting, and Facebook page design. They measure their success in terms of page views, remarketing click through rates, return visits, and total time spent on a site.
- Action. Awareness, interest, and desire are the carrots that companies dangle to get to the action stage, where potential customers become “converts.” Price optimization, offer testing, branded pages, and conversion optimization techniques all comprise an action-oriented social media campaign. Metrics to measure customer action include costs per customer, conversion rates, revenue, and sales.
- Loyalty. The bread and butter of any business, loyal customers are those who continue to return long after the first purchase. Social media often plays a vital role in nurturing companies’ relationships with customers, from loyalty programs to LinkedIn groups to pages dedicated to longtime customers. True ROI and Customer Lifetime Value are two ways to measure how well a campaign has encouraged and rewarded customer loyalty.
To gain the most accurate picture of how well a social media campaign has worked, companies should take a multifaceted approach to measuring ROI. Although the original goal may have been to generate loyalty among existing customers, an uptick in interest from potential future customers is an important factor that should inform future campaigns.
With the careful selection of metrics to measure KPIs for a social media campaign, brands stand the best chance of leveraging these platforms to their advantage and achieving a strong ROI for years to come.
What metrics do you use to measure the effectiveness of social media marketing campaigns?