Are You Measuring Your Social Media ROI?


throwing money away Did you know Matt McGee recaps the best search marketing posts of the month on his blog? He does. And they’re awesome. And if wasn’t for his effort, I never would have seen Mack Collier’s post that asks if we’re too worried about finding the ROI of social media. And that would have sucked. Because it’s something that everyone involved in this space should go read. Now.

In Mack’s post, he shows the big brand perspective for social media. The really big brand perspective. The one where you don’t have to actually measure anything, where you can just “feel it out” and “use your gut” to know it’s working without putting anything down on paper because you have so much money that no one asks. He talks about Best Buy and Kodak and Pepsi and Graco and other Madonna-level brands. These companies don’t have to spend hours analyzing numbers or worry about immediately finding the ROI for a campaign. They can sit back and go off a feeling. Because they have a boatload of money. And that’s what you get to do w hen you have a boatload of money – waste it.

You, however, probably do not own that boat.

Small and medium-sized businesses don’t have the freedom that big brands do when it comes to throwing money at things to see what sticks. When you’re little, you need a plan. You need to know what you want to get out of something before you get sign off. You need to know what the money is for. And then, when you are finally given the green light to launch, you need to watch your campaigns like a hawk to make sure you’re getting value from them. You need to define your ROI.

But ROI doesn’t always have to equal just dollars. There are other currencies to be aware of on the Web. ROI in social media can mean lots of things, things that you can leverage and turn into dollars at a later date.

Things like:

  • Links
  • Engagement factors like comments, UGC content, retweets, etc.
  • On site community
  • Brand awareness
  • A change in brand sentiment
  • Traffic
  • Blog subscribers and platform growth
  • Knowledge about your market

However, these things are measurable. And you should be measuring them by tracking brand conversations and through the use of social media tools. That kick-back, California “we think it’s working” attitude may work for the big dogs. However, it’ll get you fired real quick when tweets and a pocket full of famous don’t pay the bills. Unless you’re Pepsi, you need to be measuring your ROI on social media, always.

Define it. Measure it. Defend it to the big dogs. Let that be your mantra.

Your Comments

  • jaamit

    absolutely spot on Lisa. ROI doesnt have to be about immediate sales or leads, it stands for “return” ie what am I actually getting for all this money I’m spending on this social media claptrap?

    I was having this discussion with someone the other day who was basically arguing “oh you dont need to worry about ROI with social media, you cant measure the benefit, that will just limit you.” I respectfully disagreed, but not nearly as eloquently as you have hear.

    it’s nuts how these moneybags companies can just throw cash at a consultant, receive some buzzwords and platitudes and be happy with that. To be honest I feel there’s a similar thing in SEO too – far too few SEOs actually measure ROI and far too few of the big brands esp are happy to spend without knowing what it’s doing for them. it’s those of us who deal with smaller businesses who are pushed to actually work hard and prove a good return on our clients’ investment.

  • Lars Tong Strömberg

    You confuse ROI – Return on investment, with KPIs – Key Performance Indicators.

  • Verabera

    Another good one :) Thanks again!

    About brand awareness and brand sentiment. Any recommendations / studies / articles about how to measure different brand related KPIs? Thanks in advance.

  • Mack Collier

    Hey Lisa, thanks for the mention! I think small businesses also jump into social media without a pre-set strategy and plan, but it can often be because they feel they ‘have to try something’. Tim Jackson at Masi is a great example of this. He was the entire marketing department for his brand, and was looking for a creative way to get the word out about his brand. So he embraced connecting to his vendors and customers via social media, and he’s had big results, I think sales of the brand are up like 400% since he started using social media.

    But the main point I was trying to make wasn’t that companies should just try social media for the hell of it. I was trying to stress that companies SHOULD measure and track what they are doing and JUSTIFY why they are using social media. They have to create BUSINESS VALUE from their efforts. Ideally, that value will directly impact the company’s bottom line, but if that’s not traceable, then track the benefits back to something that DOES impact the bottom line.

    BTW I wouldn’t say that the big brands I mentioned just started using social media because they had buckets of money. I think they started because the guys at the top understood the VALUE that would be created. I asked Richard Binhammer of Dell once how they sold Michael Dell on using Social Media. He said ‘We didn’t, he told US to do it!’ Dell did that because he understood that his customers were using social media, so he saw the VALUE in using those tools to connect with his customers.

    Great thoughts here, I think we agree on the main points! ;)

  • David Booth

    Social media is still in that phase where everyone knows by now that they should be doing it, but few know why and fewer are able to figure out what it’s adding to their bottom line – love to see advocates for the latter!

    This was a larger site, but below is a post from the Google Analytics blog about social media tracking of Lollapalooza’s music festival this year. Even if you’ve got a small site, integrating analytics and social media through event tracking, virtual pageviews and campaign tagging can start to paint a very good picture of what your social media campaigns are doing for you with respect to your own unique goals and KPI’s.

    Full disclosure – I was the author of this post, but hope it helps get people thinking about tracking return on social media investment.

    Thanks for posting about this!

  • cory huff

    Good times. Lisa, thanks for this. Your list made me stop and do a mental check. I’m measuring all of those things, but it made me want to know for sure that I’m measuring the right things.

    Thanks a lot!

  • Ian Harte

    Very good post! I am very interested in what you have wrote about, I am going to have a more in depth read over the weekend, bust now haha!