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Social media ROI isn’t always easy to track, but establishing, measuring and tracking metrics in this industry is crucial to ensuring that you aren’t wasting your time and energy.
Social media ROI
If you’ve never measured social media ROI before, this article will give you several concrete strategies that can be applied to your own social media marketing campaigns to improve your overall results.
Let’s get started!
Step #1 – Establish a measurable goal
One of the biggest challenges involved in tracking social media ROI is that the impact of these measurements can be extremely hard to capture. How exactly, for example, can you measure the financial impact of having 10,000 Facebook followers compared to 500? How can you quantify the role increased brand awareness plays on your company’s bottom line?
For this reason, the first step in the process of measuring social media ROI is to select the specific metrics you want to measure in the first place! Although the metrics that make the most sense for your business may vary, any of the following options present potential, trackable social media metrics to consider:
- New website visitors obtained from social media sites
- Website sales resulting from social networking site visitors
- Total number of social media profile followers
- Links to your website or other content pieces shared across social networking sites
- Brand awareness or mentions on social media pages
Obviously, tracking each of these metrics requires a separate combination of tools and programs to measure the value received from social media marketing campaigns compared to the time and money invested in them.
However, for the purposes of this article, I’m going to focus on the second option from this list – tracking the website sales that result from social networking site visitors.
Not only is this metric one of the easiest options by which to measure the relative value of business social networking activities, the basic process of setting up tracking systems and tracking results can be easily adjusted to accommodate any of the other potential metrics from the list above.
So, in this case, we’ve decided to measure the sales that result from social media visitors, but we need to be more specific than that. As an example, saying something to the effect of, “My goal is to bring in $2 in sales for every $1 invested into my social media campaigns” will give us a concrete way to determine whether or not our activities are on track.
Step #2 – Set up Google Analytics goals
Alright, now that we’ve determined what specific goals we’ll be measuring our progress against; it’s time to put the necessary tracking tools in place!
In this case, I’ll be using Google Analytics to measure when sales are occurring, as the program is both fully-featured and free to use. To set up goal tracking within Google Analytics, start by navigating to the “Admin” section of your dashboard and then selecting the “Goals” tab from within your website’s profile.
Within Google Analytics, you’ll have the opportunity to set up four different types of goals:
- URL Destination
- Visit Duration
If your site uses a single, defined “Thank You” page that’s displayed following a successful purchase, you’ll want to select the “URL Destination” goal option. If your site utilizes an off-site shopping cart provider or if your checkout process is dynamically generated, the “Events” option will better suit your needs.
In addition, depending on the complexity of your site’s sales funnel, the “Goal Funnel” features may help you to better track your website visitors’ progress through your sales process, though this option isn’t necessary to ensure proper tracking.
For the most part, setting up your Google Analytics goals is simple – just add a goal name and then fill out the required forms that appear. However, if you need further step-by-step instructions on how to set up some of the more advanced features this program provides, take a look at the following articles from Google’s help desk:
Step #3 – Create Custom Segments for social media traffic sources
Now, assuming you’ve set up your Google Analytics goals correctly, you should start seeing data returned within a day or two that demonstrates when sales or other types of conversions are occurring on your website. Unfortunately, though, this information – out-of-the-box – isn’t divided up by traffic source. At first, all you’ll see is the aggregate data – which isn’t that helpful from an ROI-tracking standpoint!
The solution to this issue is to create “Custom Segments” within your Google Analytics account that will allow you to separate your conversion sources according to the traffic source that initially sent over the website visitor. When set up correctly, this will allow you to determine which sales on your site resulted from social media visitors, and which conversions came from natural search traffic, PPC ads or other sources.
To set up Custom Segments, return to your Google Analytics dashboard and select the “Advanced Segments” button that appears in the upper-left hand corner of your main reporting area. Next, although you’ll see a number of default options appear, we’ll want to be more specific than any of Google’s standard Advanced Segments provides for – so click the “+ New Custom Segment” button from the lower right-hand corner of the work panel:
On the screen that appears, select the “Source” option from the “Include” menu, and then enter the root URL of every social media site you want to track. Although the specific sites you track will depend on your site’s unique traffic profile, at a minimum, you should create segments for:
Be careful not to lump all of your chosen social networking sites into a single Advanced Segment. Instead, create separate Segments for each option, as it’s possible that your ROI will vary widely from one network to another.
Step #4 – Measure conversions across traffic sources
Once you’ve completed Steps #2 and #3, it’s time to bring these two elements together to determine – conclusively – which social networking websites are sending you buyers.
To find this information, return to the “Overview” page found within the “Conversions” section of Google Analytics. This will bring up a record of all the completed goal events that occurred on your site, as well as the financial impact of these goals (if you assigned a goal value to each of your tracked variables).
While the information will initially include goal completions from all traffic sources, you can again click on the “Advanced Segments” button from within your dashboard in order to apply any of the Custom Segments you created in Step #3 to your conversion metrics. Apply each of your Custom Segments to this data and make a note of the number of sales that have occurred as a result of social media participation across each of the different networks you’re active with.
Step #5 – Evaluate social media revenue compared to investment
Finally, keep in mind that the information we’ve tracked thus far only covers the revenue side of things. To truly understand the ROI of social networking, we must also compare the amount of money that was spent to bring about these sales.
Again, this will require some tracking on your part. When conducting social media marketing campaigns, it’s important to keep track of both measurable expenses (for example, paid content for use on your social networking profiles, app development and so on) and the cost of the time you’ve committed to your participation. If you’re paying an intern $10/hour to work 10 hours per week maintaining your social media presence, that $400/month must be taken into account as well.
Ideally, as a result of these tracking exercises, you’ll see a positive ROI for your social media marketing activities. However, don’t panic if your numbers aren’t initially positive. If you’re disappointed by the results you’re seeing, use the data you’ve generated to identify less profitable campaigns and weed them out in favor of those that bring in more sales.
Over time and with consistent tracking and effort, you can use this tracking process to turn your campaigns into lean, mean, profit-generating machines!