In this week’s video, Joe Fox tackles a common question that he receives from marketing clients – how do you measure social media ROI (return on investment)?
Many of our potential clients see that social media could work for their business, but they don’t understand how to use it to its full potential (or just how much work goes into successful campaigns!). In order to dominate digital, businesses need to master social media and understand how to analyse their returns and their online influence. Learn more about how you can do this in the video below!
Stay tuned for episode 5!
Video Transcript [edited]
“Okay, so today what we’re going to talk about is a question that often comes across my desk or happens when I’m about to close a deal, in regards to social media marketing – “What is the ROI of social media?”
Now, a lot of people who are watching may not necessarily know what ROI is – it means Return On Investment. We work with a client, they pay us X amount of dollars, they want to a dollar figure returned on that money that they have invested in our services. A lot of people do not understand that 1) social media takes time, 2) social media has to be organic and authentic and 3) a heap of work goes into running a successful social media campaign. Content on content, advertising on advertising, there’s a lot that’s got to be done.
Now, the two ways that I suggest people look at the ROI of social media is 1) what is the return on the investment financially? So, if you’re selling a product, how many of those products are being sold through social media? Is Facebook advertising really effective for you? Is engaging with your customers and having conversations with them and answering their questions effective for you? Is that generating sales? Is just your general word of mouth, where people are tagging their friends into your social media pages, what is working for you to generate those sales? The only way you’re going to be able to answer that truly is having a look at Google Analytics and having the right metrics and dashboards set up on Google Analytics to be able to give you this information.
You need to look at it in comparative periods. Have a look at implementing a social media marketing campaign for three months, compare it to the previous three months and work out if there’s a good return on your investment financially. Now, the second ROI that we refer to in social media marketing is return on influence. How much brand awareness have you generated through social media? This may not necessarily relate to a tangible dollar amount and it may not show on your Google Analytics, because you don’t know if ‘Becky with the blonde hair’ has turned around and spoken to her friend, or whether this friend has turned around and purchased because they’ve seen you on social media and her friend has reconfirmed that for you.
It’s very hard to tell how much influence you have on social media, but there are certain tools that you can use to do that, and we’ll be talking about them further on in later videos, in depth, and where you can find them, but I guess what people have to understand about social media is that there’s the two forms of ROI. Return on your investment, which is a dollar for dollar figure that you can match through Google Analytics and through your website platform, and the second thing is your return on influence. How much influence and how much brand recognition have you built through running social media campaigns?
The truth is, social media is a platform that businesses simply cannot ignore. Businesses that are choosing to ignore it and choosing to stick their head in the sand are going to get washed up and left behind. It’s as simple as that. We’re seeing it happen more and more now. Businesses that are adopting social media and have adopted social media campaigns and social media advertising and marketing into their marketing budgets are doing extremely well and reaping the benefits. Businesses that chose to not get involved, on the other hand, are getting washed up, becoming irrelevant and trying to play catch-up.
Rhiana is one of our fantastic content writers.