How to Measure Your Social ROI

Social is the trend that stuck. For marketers across every sector and industry, social platforms are delivering brand awareness and sales, earning the resource and investment they increasingly demand.
 
Frequently however, social remains a must-do activity that lacks strategy and direction. Conducting any marketing activity simply because it’s expected, fashionable or trendy is a dangerous waste of focus, and driving a return on investment (ROI) from such activity can be frustrating if not impossible.
 
Are you currently engaged in social and unsure on its return? Do you have to justify the existence of social platforms and campaigns to senior management?
 
Well here’s how to precisely determine your social ROI, in a way that makes total sense for your business.
 

Step 1: Be explicitly clear about what you’re trying to achieve

There can be no clear outcome without clear ambition.
 
What are you trying to achieve by being on those social platforms? What role will social play in your marketing strategy? And which social platforms are right for your business and audience? Figuring this out will help you determine a benchmark for success, against which to measure your results.
 
Strategic focus is fundamentally driven by ROI, or more specifically by revenue, and that can be influenced by referral traffic, community engagement, brand awareness and so on.
 
Having a multi-level strategy in place works well for social because it allows you to get down to the tactical delivery that must take place every day, while framing that activity appropriately in the context of your larger-scale ambitions.
 
So, what do we mean by a multi-level strategy? If your ultimate social goal is to accrue ‘likes’ for example, it’s about thinking bigger: Why do you want 5,000 likes? What will you do with them once you’ve got them?
 
A stronger overarching goal would be to ‘Increase referral traffic by X%’. Beneath that might sit increasing followers and engagement (and accruing likes), but from this higher vantage point you’ll be able to drive your tactics across multiple social disciplines.
 
Take a moment to crystallise your strategy and determine which social platforms and tactics you’ll need to use in order to achieve the ROIs you set out, carefully thinking about your costs and what you want to gain. You’ll need to know this for the next step.
 

Step 2: Set your stage 1 gateposts for measurement

Gateposts need to connect your tactical activity to your strategic goals. So if your ultimate aim is increase referral traffic by X%, and your tactics include using Twitter to…
 

  • Express opinion
  • Celebrate and link to complimentary businesses and resources
  • Link to useful information on your site
  • Link to conversion pages on your site

…then followers have multiple opportunities to engage with your brand. To determine your social ROI you need to know which of these tactics are most effective at referring traffic to your website.
 
A gatepost sits behind every type of social broadcast and captures the activity it generates; it’s a reporting point to determine what has happened. It might be a Hootsuite report, landing page statistics or a Facebook conversion pixel. It should capture pertinent information, so for this example where our strategic goal is to increase referral traffic, the gateposts must capture that, but they could also capture the other benefits of social – engagement, shares and so on.
 
For social to be truly strategic, these gateposts are vital for capturing what works for your brand.
 

Step 3. Weight results according to importance, not just effect

If we weight each activity according to how important it is to our strategy, we’re able to determine which activities generate the best results for our business.
 
Tactical activity for one week on Twitter might look like this:
 

TWITTER
Type of tweet

Number sent

Favourites Retweets New follows Unfollows

Site referrals

Opinion

15

3 35 47 3

297

Link to compl. info

10

150 25 15 1

3

Link to onsite info

15

5 7 55 2

350

Link to conversion page

5

1 4 35 7

67

In this example, linking to complimentary information that’s not on our site generates the most favourites but actually drives less site referrals. It has benefits for engagement, but not for driving referrals and therefore revenue.
 
According to our strategy, we value referrals over engagement. So we’d attribute less weight to this activity. Linking to onsite information is great for referrals, so we’d attribute more weight here.
 
A favourite is great but does not prove valuable engagement, so lets give this a score of 25. New follows are fab – we’re reaching more people so we’ll attribute a score of 50 here. Retweets are even better. Our audience is engaged and sharing to their audience. Let’s give this 75. Site referrals – people clicking through to our site as a result of the tweet – is the sweet spot and so gets the largest weighting – a whopping 100.
 
Our results can now be calculated not just on volume, but value. This is how it looks:
 

TWITTER
Type of tweet

Number sent

Favourites Retweets New follows Unfollows Site referrals

Referral Score

Opinion

15

3 35 47 3 297

34789

Link to compl. info

10

150 25 15 1 3

6688

Link to onsite info

15

5 7 55 2 350

38426

Link to conversion page

5

1 4 35 7 67

69082

Weighting

25 75 50 0 100

Multiply each output by its weighting. E.g. 3 favourites x 25; 35 retweets x 75 and so on. Then add up all the score for each activity.
 
We can now clearly determine the social value of our activity based on output. Linking to conversion pages on Twitter drives the best results.
 
But we must monitor input too because that will tell us how much time and money goes into creating each of these tweets and that’s what will give us an ROI. For reference, he ROI calculation is:
 
ROI = Gain of investment - cost of (3)
So what’s the cost of these tweeting investments? It’s not always practical or easy to work out exact hours and effort expended for this kind of activity. But we can attribute a similar weighting to the input as we did to output. How can we do that?
 
Sharing an opinion – this could be easy for the MD. Not so much for a new social media exec.
 
Linking to complimentary information – with a sharp eye for great content and a job role focused on the industry, finding such links need not be resource-heavy.
 
Linking to onsite information – we need to create this information and it needs to be of high quality and interest to garner attention. How easy it that for your organisation?
 
Conversion pages – again, we need to create these and continually optimise them. Do you have the skills in-house? Do you outsource this?
 
For this example, let’s weight these as such:
 

  • Opinion – 25
  • Linking to compl. info – 50
  • Linking to onsite info – 75
  • Conversion pages – 100

We can work out a ‘cost of investment’ by multiplying this ‘value’ by the volume of activity.
 

TWITTER
Type of tweet

Cost of investmentt

Number sent Favourites Retweets New follows Unfollows Site referrals Referral Score

ROI

Opinion

375

15 3 35 47 3 297 34789

92

Link to compl. info

500

10 150 25 15 1 3 6688

12

Link to onsite info

1125

15 5 7 55 2 350 38426

33

Link to conversion page

500

5 1 4 35 7 67 69082

137

Weighting

25 75 50 0 100  

Multiply the volume of activity (# sent) by your output weightings.
 
And now we can calculate an ROI by subtracting the cost of the investment from the gain (the referral score) and dividing it by the cost of the investment. Remember the ROI calculation is:
 
ROI = Gain of investment - cost of (3)
And so…

TWITTER
Type of tweet

Cost of investment

Number sent Favourites Retweets New follows Unfollows Site referrals Referral Score

ROI

Opinion

375

15 3 35 47 3 297 34789

92

Link to compl. info

500

10 150 25 15 1 3 6688

12

Link to onsite info

1125

15 5 7 55 2 350 38426

33

Link to conversion page

500

5 1 4 35 7 67 69082

137

Weighting

25 75 50 0 100  

Interesting findings. While conversion pages clearly deliver the best ROI, opinion tweets are a strong second place contender. And that’s because in this example, we’ve sent 15 tweets linking to onsite information – something we’ve considered a higher cost than sending 15 tweets sharing opinion.
 
The changeable element here is in the third column – we have control over how many tweets we send. The ‘human’ decision here, in addition to all these stats, is whether your organisation values fewer site referrals over an activity that costs less to the business.
 
These simple steps to calculate your social ROI ensure social activity remains strategic and focused, and enables you to justify the value of each activity. Social is a must-do activity but only with clear direction. Activate these techniques and start refining your social spend today.
 
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About the Author: TMO