One of the most compelling challenges for the companies/clients which enter in social media is to calculate the ROI. Most of the time the agencies are speechless to their clients and the clients to their CEOs.
When it comes to numbers, Facebook, Twitter and Instagram all of them have huge metrics available to measure, but still when it comes to ROI the same metrics seem to be less important to figure out the right numbers in excel for the clients and CEOs. We are happy to say “Yay we have got 100,000 fans” and this becomes our success metrics. This indeed is not a great measure of success but still lots of people consider it as a great ROI metric when they compare their spending to increase Likes(so called unreachable/paid fans).
What is ROI?
How to calculate your return?
To calculate your return it is very important that we are first aware of our goals. What are you looking as the output from your campaign on social media.
Goals are not necessarily an online sale on the website but can be categorize into several things
- Filling out a lead generation form
- Signing up a newsletter
- Social Interaction(A comment or a share)
- Views on a Video
- Time Spent on a Webpage
- Reach a specific page on website
- Traverse minimum number of pages on website
- Post reach to a specific number of people
The goals are set up by the marketing team and senior managers, and should be fixed at the beginning of the campaign. Please note it is important to have specific goals from the campaign initially so that you can clearly map your results to that.
Social Media has 2 perspectives to it as they are shared Media –
How to add a value to your goals on social media metrics
Macro vs Micro Conversions
In simple terms there can be many micro conversions on page level but there will be one ultimate goal of your owned property(like website , blog etc) which is your MACRO Conversion.
Facebook launched conversion measurement protocol which will help to optimize your adverts. Simply follow the steps in below link to create facebook conversion pixels
Once you have set the pixels, start tracking your GA (Google Analytics). You can also see the results on Facebook tool.
It is always recommended to track your conversions from one tool (GA preferred) or if you are a tool freak here is the list – http://www.adpushup.com/blog/web-analytics-tools-google-analytics-alternatives/.
You cannot keep tracking different medium conversions on different tools. In worst case put all your tools data at a common point under common metrics. (Will cover this in detail in my coming blogs)
The other way to go ahead on this is to create trackable links for different social medium- https://support.google.com/analytics/answer/1033867?hl=en
This will help you create trackable links by giving in details the Source, Medium, Campaign Name and other details. This can directly give you the conversions made by your social media separately. Make sure the links you are sharing on posts or ads are trackable to have a clear idea on all the details
Now when you see your analytics you can clearly see the number of Macro Conversions that you have made using ‘social’ in your reports
After analyzing the data from both perspectives (it is not ‘either or’ it is both) you can check out the marketing/advertising spend.
The total spend on the campaign will include your advertising spend on the different medium to increase reach, tools cost and time invested(if you want to include the hourly cost of your manager)
Make an excel for your company putting all the fields in detail, assign values and see the dollars which you or your marketing team is generating from Online Medium.
The final table will look like as below
Take spend into account for each of the channels and calculate the ROI. These figures will definitely give you a closer look to your social media channels in terms of spending.
Incorporate this exercise in your Social Media Reports to calculate and track the ROI. Do not forget to share this with your friends. I have to track my social media ROI too 😊