Within the next four years, estimates show that an average of 20.9% of all marketing budgets will be spent on social media. Managing your brand on social media can be a daunting task. Campaign metrics from Facebook, Twitter, Instagram, LinkedIn and other platforms often focus on “vanity metrics,” such as the number of likes and retweets, making it difficult to gauge how successful your campaigns are in furthering your most critical business goals.
A company’s return on investment, or ROI, is the central metric that businesses generally use to determine whether the benefits of an investment have outweighed the cost. So, how do you measure ROI with social media? In simple terms, first you must identify the goals of your campaign and decide what metrics you need to measure, then collect the data and analyze. Here are a few steps to help get you started:
- Define your goals
This first step is the most critical. Only once you decide what you want to measure can you track your ROI.
What are you hoping to accomplish from your social media campaign? How do you want to measure your campaign’s success?
Answers to these questions vary greatly between companies and among different branches within an individual company. Think bigger than “more Twitter followers.” Sample goals could consist of increasing your number of newsletter subscriptions, email acquisitions, website visits, or sales revenue.
- Determine the data you need to measure
Once you know the goal you want to measure, you need to obtain access to the data. Let’s say the goal is to drive more sign-ups on your website. If your company is tracking their website conversion statistics using a cloud service like Google Analytics, you can easily connect the live Google Analytics data to your Netvibes Dashboard. The dashboard will continually update with all the latest website traffic and conversion numbers.
Crunching numbers may seem daunting, but with Netvibes, the hardest step becomes the easiest! Using the dashboard’s analytic capabilities, you can automatically track and analyze all your metrics in one place.
Here we can see our social campaign metrics, alongside our website analytics in a separate chart. Comparing the datasets is easy: simply drag-to-compare any two charts in order to spot trends and identify correlations. In this example, let’s compare the number of Twitter retweets with our website sign-ups. The comparison chart clearly shows a strong correlation between the two datasets, and we can infer that the company’s increased presence on Twitter is, in fact, driving website conversions. Approximately 25% of new sign-ups are being driven by the social media campaign.
- Calculate ROI
Your company likely has cost-estimates attached to its goals. Companies may calculate this number in different ways. For example, if the company is currently spending about $20/conversion using PPC campaigns like Google AdWords, that’s a metric we can use. Or let’s say that of 1000 people who create a new account on your website, 50 of them (5%) will go on to become paying customers, with an average revenue of $100. Doing the math, (50 x $100 = $5000 divided by 1000 people), we find that each website sign-up is worth about $5 when translated into company revenue.
From here, calculating social media ROI is simple. Let’s say the company spent $10k on a social media campaign that increased website sign-ups by 25%–in other words, about 500 new people signed up as a result of the campaign. If each sign-up is worth $24 to the company, we multiply $24 by 500 people = $12,000 value. This campaign achieved ROI=1.2
Still too much math? Don’t worry, once the Netvibes dashboard is set up to analyze the goals you want to track, it all keeps updating automatically. You can receive daily/weekly/monthly Pushmail reports breaking down all the analytics for you.
Netvibes Dashboard Intelligence can help you maximize all your marketing campaigns and demonstrate ROI.
For a free dashboard demo, please contact us.