By David Neuman
I attended a great conference yesterday hosted by BDI that featured case studies from various businesses using Social Media. This was my fourth BDI conference, and recommend that anyone who has an interest in Social Media attend future ones. My only issue with the conference was the overkill of “Social Media and ROI”. A typical conversation between two people pertaining to this went something like this:
Person 1: “You need to justify Social Media by showing ROI”
Person 2: “Ok, but how do you do that?”
Person 1: “I don’t know, but it’s important”
Remember when direct mailing, television, and radio were the dominant marketing methods? Businesses would typically utilize these media to increase brand awareness and ultimately increase sales. How was ROI tracked for these businesses? Granted a lot of companies used coupon codes or different phone numbers to track campaigns, but were these effective in seeing full ROI? Businesses in the past were willing to spend $100,000 on a few television spots without having a clue on what the outcome was. Sure they might have seen an increase in sales and/or call volume, but could have it been from word of mouth or another marketing effort?
What has changed then? The Google Effect. Google Analytics brought online revenue tracking into the mainstream. If you installed E-Commerce tracking and a couple of snippets of code, you can effectively see where each of your sales came from online. This proved extremely effective in analyzing ROI for your SEO and paid search campaigns. Back when print and television advertising was in its prime, it was impossible to measure ROI like this so advertisers weren’t held accountable for it nearly as much.
Social Media (at least the phrase anyway) came after SEO and paid search. When Social Media started to blow up in its popularity, marketers were already used to being able to measure ROI for their SEM campaigns. Because this was possible, it had to be as well for Social Media right? Companies have been trying to show the ROI of Social Media through programs, formulas, custom coupon codes, tracking codes; even by assigning dollar values to Facebook fans and Twitter followers. Nobody has been successful in fully tracking Social Media’s ROI. Why? Because it’s impossible. Assuming that you can fully track Social Media’s ROI is like assuming that when you tweet a link to your company’s website that everybody who discovers your website through Twitter will always click on that link when they purchase a product from you.
I’ve listed below a couple of benefits of Social Media that cannot be tracked in terms of ROI. It’s impossible, yet there is no arguing that these are all important parts of any Social Media campaign.
- Resolving Consumer Complaints: Twitter, Facebook, forums, blogs, and countless other Social Media sites make it easy for unsatisfied customers to voice their complaints. Since these complaints are public, businesses benefit the most from responding to these complaints publicly as well. When a company is successful in satisfying the complainer, it not only helps with their brand image, but might turn that “I’m never buying from you again” consumer to a repeat customer. Unless you command that person to give you a heads up every time they buy from you again (which is just awkward), you cannot track the ROI of resolving consumer complaints. Yet there is no arguing that these is a crucial part in any Social Media campaign. Ignoring these individuals is almost a guarantee that they’ll never buy from you again.
- Buying Behavior: Say, for example, that you discovered the clothing store “American Eagle” because you saw a Facebook contest they were launching. Imagine that after you researched their website you end up becoming a frequent customer of theirs. Every purchase (online anyway) that comes from you should show in e-commerce tracking as from Facebook right? Well, it doesn’t. It wouldn’t make sense for you to click on their Facebook link every time you went to purchase product from them. Chances are you either typed in the direct URL or searched for the company name on Google, Bing, or Yahoo. Facebook doesn’t receive credit for all of these sales even though they were responsible for turning you into a regular customer. The same goes for some first time purchases as well. People, by nature, will research more than one company to find the best price / value for whatever type of product they are looking for. They might discover your website through Social Media and decide to buy from you after doing additional research, but the purchase might come from typing in the URL directly upon their second visit to your website. Again, Social Media is responsible for the purchase, but will not receive credit for it (according to e-commerce tracking anyway).
- Brand Image: Social Media can be an effective strategy in shifting the image of your brand. How you communicate as a brand on Twitter, Facebook, Linkedin, forums, etc. will reflect how consumers view perceive your brand (especially if you are reaching individuals on a wide scale). If you effectively shift people’s perceptions of your brand to reflect that of the company’s goals, it is a definitely Social Media success, albeit one that is not trackable from an ROI standpoint. Remember when Jet Blue had that fiasco in February 0f 2007 at JFK airport when they kept people on planes for hours without taking off anywhere due to weather conditions? People went from associating Jet Blue with being a “cool airline” to one that didn’t know what they were doing by that one incident alone. Thousands of people swore they would never fly Jet Blue again because they apparently didn’t care about their customers. JetBlue used Social Media to create videos, blogs, tweets, etc. to illustrate why the incident occurred, why it won’t happen again, and why you should still remain a customer of theirs. It was effective in counteracting these negative associations with JetBlue’s brand, but if you were to ask JetBlue what the ROI was of this Social Media campaign they would not be able to tell you. However, they would say with 100% certainty that Social Media was crucial in shifting their brand image and keeping (and generating) customers.
These are only three examples, but it clearly shows that holding a Social Media campaign accountable by its ROI performance doesn’t make much sense. However, it’s important to show the value that your Social Media efforts have produced. Value is a must for any marketing campaign even if it’s not ROI-based. Below I’ve listed some metrics that could help guide you on assessing whether your Social Media campaign has been effective.
Branded Search Volume: Google has a tool online that allows you to measure monthly search volume for any keyword phrase. An increase in search volume represents an increase in brand awareness. If this is seeing a regular increase then you can fairly assess that your marketing efforts (Social Media and additional strategies) have been effective in building your brand.
Engagement Levels: I can buy a 100,000 Twitter followers and Facebook likes in a short period of time if I wanted to. I compare the value in this to buying traffic to a website using programs like Monster Pops that produce a 99.9999% bounce rate. Twitter followers and Facebook likes are important to measure if you are growing your accounts by natural methods, but to truly see the value of these networks you need to look at engagement levels. Engagement refers to any interaction that takes places through your Social Media channels. This could be a retweet, reply, like, comment, etc. If this metric continues to increase, it shows that people are becoming increasingly engaged with your brand which is extremely valuable from a branding perspective. When analyzing this metric, it is important to weed out any spam comments or messages as they skew numbers.
Total Website Traffic: Analyzing traffic from Twitter, Facebook, etc. is useful, but doesn’t paint the full picture. Similar to the “buying behavior” bullet point I mentioned earlier, someone might discover a website through Social Media but will likely visit the website in the future via search or directly typing in the URL. Because of this, site traffic should be analyzed as a whole instead of solely by referring traffic. However, if you are launching a blog it is important to analyze your blog traffic separately each month.
Value Added Benefits: These are benefits from Social Media that you simply can’t put into numbers. Was there a lot of negative complaints online that you resolved successfully through Social Media? Did somebody who is an influencer in the space positively mention your brand? Did you successful get your product listed on a bunch of blog posts via blog outreach? If Social Media has been providing noticeable value in these areas (and in others) it’s difficult to argue the benefit of it.
Impressions: Analyze impressions for all of your video and image content to see how many eyeballs you’ve successfully reached. These numbers will not be reflected in your analytics stats so it is imperative to keep track of these numbers regularly.
Again, as with any marketing campaign, you need to justify its worth, but when it comes to Social Media judging it by ROI will ultimately set you up for failure.
Tags: roi, social media
