Integrating social media into the marketing mix has become ubiquitous because brands know it is a core channel where consumers are spending a significant amount of time. We often call it “earned media,” implying that the medium provides free brand exposure, but in reality it is far from free.
The proper planning and execution of a social media strategy strains both client and agency resources because it requires a constant stream of fresh content that is curated in an engaging way and expected to be “always on.” Additionally, the investment in technology and analytics are not to be overlooked.
As brands dedicate more resources to social media, how we measure ROI is a shared concern, but generally ignored because of its reputation for being difficult to accomplish. However, there are simple techniques that you can execute that move beyond counting fans, followers, shares, or comments. This article describes a few key methods, organized into two categories: direct, when a social media activity is linked to a sale; and indirect, when the social activity is important to the brand, but not linked to a sale.
The first set of techniques is the most straightforward and simple. We call these “direct measures.” An example is a data form on social channels to capture leads. The leads are then transferred to a CRM database and tagged with a source name indicating this batch of leads came from a social channel or campaign. Subsequently, a sales match is performed to track the conversion to a sale, which is attributed to the social channel.
If you’re like most brands and have data capture forms or “conversion events” living on your website and not in social, you can rely on the URL tagging method to measure how social is driving onsite conversion. Place a few simple lines of text (query strings) at the end?of social URLs that drive visitors?to your site. By identifying the customers who click through and convert on your site, you can tie these conversions back to the links from social. After those conversions are loaded into the CRM database with a source name indicating “social,” similar to the first method, you can perform a sales match to calculate ROI.
Long term, since these customers are identified in the CRM database as arriving via social channels,?you can analyze this segment as a separate cohort from other groups and compare metrics like churn rates, repeat purchase rates, or offer redemption rates to calculate a lifetime value and compare it to non-social sources.
There are several indirect measures, when an actual sale cannot be directly attributed and linked to a consumer, but nonetheless drives monetary value for a brand.
When we serve content in our social channels, it drives organic and viral impressions that are reported by the channel’s analytic tools. If our Sina Weibo and RenRen posts generated 50 million impressions in a given month, there is a media value to that volume of exposure. If we apply a conservative CPM of RMB 5, we can estimate that the posts in that given month produced a media value of RMB 250,000 ($41,000).
SEO (search engine optimization)
?Any social strategy inevitably generates new content for a brand. This can take the form of pictures, videos, links, mentions, tags, etc. New content directly impacts a brand’s SEO rankings and SEO site traffic. Using any standard SEO tool, brands can measure how their traffic has been impacted by this influx of social content, and subsequently tally the site conversion impact of this incremental traffic.
Another indirect method leverages social listening. If executed?well, social media strategies will undoubtedly resonate in online conversations. Over time, as we monitor social media, we can track how a brand is gaining or losing in key metrics relative to a competitive set. Metrics used under this method might be as simple as social SOV (share of voice) or they can be more refined and use Natural Language Processing to measure favorability, sentiment, advocacy, or campaign- specific topics.
Social is most often used as a branding medium. Traditionally, when measuring the brand impact of digital campaigns, we deploy studies with partners like Dynamic Logic to compare consumers who have been exposed to campaigns with those who have not been exposed. We gauge how exposure shifts awareness, favorability, intent, NPS (net promoter score), etc. Leveraging this established methodology, we can apply it to social media exposure as well.
Today’s tracking tools work in?silos and only measure a single channel. Worse yet, these channels by default assign 100 percent conversion credit to the last exposure or last click. Digital attribution solves this by tracking unique consumers across all digital channels by using a universal tag to break down these tracking silos. Once cross-channel tracking is implemented, regression models are used to assign credit to every path to conversion. Since social is part of the path for many consumers, it will be assigned conversion credit and ROI.
With a little planning and effort, you can easily implement many of these methods to justify the investment in social media for your clients. The difficulties still exist. For example, WeChat has gained momentum in China but due to the private nature of the platform, measuring brand performance on WeChat will continue to be a challenge that we are seeking to solve.
Regional Director, Customer Insights Wunderman APAC