Calculating ROI for Social Media

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If you're interested in taking advantage of social media, you will probably need to convince your boss that it's a sound financial investment.  Here is a list of things you should keep in mind when calculating ROI on social media initiatives.

Contents

1. Exposure & Analyze

Here are some metrics you should be looking at when applying exposure to your ROI:

  • Impression
  • New vs Returning visitors
  • Frequency
  • Referrers/Sources
  • Page Views
  • Clicks/Visits


2. Engagement

Not all visitors are created equal. So measuring and analyzing how engaged they are is very important.

  • Pages viewed- how many pages did they visit during their visit.
  • Assets viewed - what pages did they view? They they look at the whitepapers, videos, pictures?
  • Time on site -how much time did they spend on the site.
  • Participation - did they participate in a discussion. Did they leave a comment on your blog or posted in your forum?
  • Sharing -did they use a sharing feature to tell friends or colleagues?
  • Generated content -did they upload content or posted an article on your website?
  • Registration -did they register for something?
  • Enquiry -did they send you a question via email form?
  • Transactions - did somebody complete the sales cycle and purchased something?


Evaluating engagement

You have to determine how action equals intent, and how intent translates into revenue. For example:

  • Visits - it shows brand engagement however you have to look at how long they stayed on the site.
  • Registration - in the future will you be able to reach people who join the mailing list?
  • Tell a friend - recommendations are the strongest sign of intent.
  • Coupon downloads- Shows interest in a specific offer.
  • Location clicks - Shows interest of finding your office or store.


ROI Calculation

  1. Define the metrics that indicate intent.
  2. Estimate conversion rate and the revenue each action will bring for both exiting and new customers.
  3. Use these rates and projected sales to predict revenue.
  4. Normalize by averaging expected value.


Once you have your ROI methodology you should build your business case.

  • Assumptions
  • Economic impact


Non-Measurable ROI

  • Word of Mouth
  • PR value
  • Internal recognition and exposure
  • Benefit to brand
  • Ongoing value of user generated content (UGC)


Social Media Tracking Tools

Sprout Social - an affordable way to track your social media initiatives.

References