Any business investment is made to benefit the company in question in one sense or another. However, measuring the direct financial gains from a social media campaign is next to impossible as you do not exactly get paid for every “like” on Facebook or “retweet” on Twitter. With 41% of companies in a survey of 1000 admitting they had absolutely no idea of social media’s financial impact (Baer, 2012), why is it that 88% of companies are using it for marketing purposes? (Bennett, 2014).

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Quite simply, the prominence of social media in modern life means that companies not creating social media campaigns are putting themselves at a major marketing disadvantage. Knowing this, alongside the fact that sharing content and creating eWOM (electronic word of mouth) is free, and therefore the cheapest form of marketing, it is no wonder companies are attempting to measure the return on investment (ROI). So, if this is the case, how do we place a financial value on the effectiveness of a social media campaign?

In her report “Can You Measure the ROI of Your Social Media Marketing?”, Donna Hoffman, scholar and principal of marketing at The George Washington University states that by trying to financially measure ROI marketers are incorrectly trying to quantify the return from a social media campaign (2010). Hoffman believes companies should instead be looking at what marketing objectives can be met by these efforts.

KPI’s

These objectives should be quantifiable and linked to a specific campaign, meaning that the objectives can be amended depending on what the business wants to achieve from the campaign. These objectives are also known as KPI’s (Key Performance Indicators). It is not possible to give a list of the best social media KPI’s due to the individual nature of business aims, however developing an understanding of general key social metrics will allow you to look at your campaign and assess whether it has been successful.

Once you have defined your goals, it then becomes possible to measure the success of the campaign based on metrics decided by the person who wants the best outcome for the company and knows what constitutes its success – you.

Click here to view the top 13 KPI’s for social media managers

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As already established, setting KPI’s is the beginning step to measuring the success of a social media campaign and therefore these should be set at the first stage of the campaigns development.

However, there are different ways these KPI’s can be assessed for success. Using the two main metrics of social media marketing; “Reach” – the measure of the range of the influence of any content and “Engagement” – the actions taken by users on the posts (Ramachandran, 2015), allows for two different assessment approaches. The first is to measure what we would call the superficial gains of a post, likes, followers gained, shares to name a few. This can be audited by you or your company very easily and is a good measure of the reach of the post and how well it did against your KPI’s for that campaign (bear in mind the only way to audit the success of your social media is against what YOU set out to achieve).

Google Analytics

Another option available is Google Analytics, using this you can audit what happened because of your campaign. This is possible because the software allows you to see where visitors to your website came from and to understand their behaviour on your site. This is the engagement side of the metric and can show you the number of conversions and the value of said conversions as a result of any social media post. Using Google Analytics to see the impact of a post also allows comparison to your own previous campaigns, although they will have had different KPI’s as each campaign is different, it is always useful to see if a different style led to a large increase in range or engagement!

More reasons you need to be using Google Analytics

There’s always a way

As a final note, although Falls said that the issue in determining social media’s ROI is in trying to put numeric quantities around unquantifiable human interactions (2008), the two methods outlined in this post should give you the tools to work around this. Setting your own KPI’s allows for a new kind of ROI calculation without needing to place a numeric quantity ($) on interactions, with Google analytics doing the opposite and placing a conversion value on interactions.

Thanks for reading! For more on how to measure the success of your social media campaign why not visit our friends Klipfolio here.

References:

Baer, J. (2012). Not Tracking Social Media ROI is Your Fault. [online] Convince and Convert: Social Media Consulting and Content Marketing Consulting. Available at: http://www.convinceandconvert.com/social-media-measurement/not-tracking-social-media-roi-is-your-fault/ [Accessed 1 Dec. 2017].

Bennett, S. (2014). 88% of Companies are Using Social Media for Marketing. [online] Adweek.com. Available at: http://www.adweek.com/digital/social-media-companies/ [Accessed 1 Dec. 2017].

Falls, J. (2008). What Is The ROI For Social Media?. [online] Social Media Explorer. Available at: http://socialmediaexplorer.com/content-sections/tools-and-tips/what-is-the-roi-for-social-media/ [Accessed 1 Dec. 2017].

Hoffman, D. (2010). Can You Measure the ROI of Your Social Media Marketing?. MIT Sloan Management Review, 52(1), pp.41-49.

Ramachandran, S. (2015). Reach and Engagement: Making the Most of Social Media Marketing – TFM Insights. [online] TFM Insights. Available at: https://insights.technologyformarketing.co.uk/reach-engagement-making-social-media-marketing/ [Accessed 1 Dec. 2017].