Social Media Analytics: Effective Tools for Building, Interpreting, and Using Metrics

How to Measure Social Media ROI – by yourself

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ROI (Return on Investment) has been THE buzz word for the past six months or so (well before Facebook became an IPO and stole its thunder). Why? Because now that social networking sites are here to stay, marketers are being forced to carve out a place for it in their overall marketing budgets, instead of using discretionary funds for “emerging technologies.” But it’s no easy task to get the buy-in on a whole budget dedicated to social media marketing (SMM) – especially if you work for a small business.

First of all, many people perceive that social media marketing is virtually free.

Networking sites themselves are “free” to be a part of, but managing them correctly and devoting the time necessary to developing a strategy and creating unique content is in no way FREE. Large corporations have huge sectors and agencies and freelance writers devoted to keeping their blogs and social networks alive. That’s a lot of actual dollars and cents.

To boot, if you ever took an intro level economics class, you know about “opportunity costs.” These are the costs you incur by not doing something else. For instance, if you spend 2 hours writing a blog post, you’re losing 2 hours where you could have been creating an email. If your emails on average garner about $800 each, then to make spending your time creating a blog post worth it, you’ve got to at least generate $800 in revenue from it, right?

If only it were that simple. Social media marketing is a little different from traditional marketing- it takes time to build a base, a reputation, and to increase your site’s SEO. If your ultimate goal by participating in SMM is to increase revenue, then you’ve really got to think about three things:

  1. The resources you have involved in it – How much money do you have, how many people do you have to draw on for the effort, how much time is your team spending on social media?
  2. Your more immediate goals – be they awareness, engagement, purchase intent, etc.
  3. How much value you associate with each social networking touch point (a twitter follower, or a facebook fan etc.).

TechCrunch reported that the value of a Twitter follower is less than one cent. Others think Twitter followers are worth closer to $3/month. There’s really no conclusive evidence because it’s always a case-by-case basis.

Social Media Analytics: Effective Tools for Building, Interpreting, and Using MetricsSo how do you figure out what the ROI of your social media marketing strategy is?

1. Instead of associating value directly to dollars, associate value to your key performance indicators (KPIs).

Ex. How many of our twitter followers shared our content or purchased our product? 

2. To delineate your KPIs you have to think long and hard about what your end goal is.

Is it awareness about your brand? Is it to influence purchase decisions? In what part of the marketing    funnel are you trying to reach your target?  

3. Determine how active your followers are on average. Some indicators of their engagement level on various social networking sites are how personalized their Facebook or blog comments are and by how much time they spend on your landing page or site.

Do they visit your page, whether it be your Facebook page, blog, etc., once and then never interact with it again? 

Some advocate for creating a social media scorecard. This method incorporates manually grading or balancing different interactions (a video view versus a tweet).  These “grades” are dependent upon your SMM goal(s). You basically create a weighted scale to help you determine your ROI.

After you figure out the value of each KPI, you can put them in order and then multiply the number of interactions with the grade. Add them all up for a total campaign score. More about this method to come.

What factors do you include when calculating your social media ROI?

Analytics & Social Strategy – Do they exist?

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I’ve been working on this post for a while. Why? Because to be completely honest, there’s a ton of debate around social media ROI and analysis. As I’ve researched, though, I’ve found a few tips that can help you in the right direction when it comes to measuring the success of your social media efforts.

I want to start by stating that it’s not all about the money. Let me qualify that – I mean, every marketing initiative doesn’t directly translate to actual dollars. A lot of marketing is about maintaining current relationships (CRM – Customer Relationship Management). Here’s a great quote I found in a recent STORES article:

“It may be hard to accept that the sweet spot for social is more about deeper engagement and brand building than a lift to the bottom line.”

Marketers are pointing to the ever expansiveness of social networking and claiming that even if you can’t evaluate the numbers properly, you still have to be involved with social media marketing. Nielsen’s Social Media Report noted that nearly 80% of Internet users visit social networks and 53% of active social networkers follow brand. No matter what, social networking is important for brands.

But, if you can’t measure the success of your latest social media campaign, then it’s almost impossible to determine areas for improvement and growth for your next social endeavor. So there’s no way that we can completely ignore the numbers!

Here are some low barrier to entry ways to start measuring the success of your social media efforts:

At the beginning of a campaign, be it a new facebook contest or an integrated social media and online event, the most important thing to do is to delineate what factors you’ll be looking at to indicate either an achievement or a failure. This could be increased engagement, awareness, preference change etc. There are many options in the marketing funnel.

Then, you must determine what Key Performance Indicators (KPI’s), will help you figure out if you’ve achieved this goal. What do you want your new followers or community to do – how do you define conversion? This could be FB likes, email opt-ins, ad impressions, site traffic, twitter followers.

Once your campaign launches, you then have to monitor them – looking at social “analytics!” What are people saying, are they retweeting you, how much? Are they sharing the content via FB, or forwarding an email, how often? Are they recommending your product or brand via Yelp or other networks? Are theyblogging about you?

You can find most of this information on your own, using Facebook insights, Hootsuite analytics or bit.ly for twitter (and Twitter also has its own website analytics), YouTube analytics, google analytics for web traffic levels and sources and you can even use technorati.com to search the blogs that include your brand name or topic.

Still wondering what the value of these followers and shares is? Check out my next post about low-level social media ROI!

How are you currently analyzing your social media efforts?