Recently I came across a report by Forrester Research, The ROI Of Social Marketing. The report was on measuring the ROI of social media. This report has been timely, as social media marketing has matured from the “newborn” stage to the “preschooler” stage.
As social media marketing has gained popularity, social media marketers have tried quantify the impact that social media has on their client’s (or their own) campaigns. Some marketers have fallen into the trap of trying to assign financial value (ROI) to nonfinancial metrics such as likes, followers, retweets, blog comments, and positive reviews.
To determine the social ROI of your social media marketing campaign, you must first determine what are your business objectives. It is shortsighted to only plan for short-term gains, not accounting for the overall goals of the organization.
According to the Forrester report, there is something called a “Balanced Scorecard”. The scorecard explains a few basic principles of a short and long-term strategy that monitors business impact from four main areas:
- Financial: Have revenues or profits increased or costs decreased?
- Digital: Has the company enhanced its owned and earned digital assets?
- Brand: Have consumer attitudes about the brand improved?
- Risk management: Is the organization better prepared to note and respond to attacks or problems that affect reputation?
You’ll also learn how to validate your results against your organization’s business objectives, and how to avoid the pitfalls of narrow, short-term thinking about social ROI.
When used correctly, the Balanced Scorecard helps to:
- Align measurement to all corporate objectives, not just sales
- Enhance the strategic development process
- Build consensus
- Avoid short-term gains at the expense of long-term brand health
One thing that I have noticed during my time in the social media metrics industry is that many people are trying to reinvent the wheel. They forget that there are many tried and true methodologies that can be applied to social media analytics. The traditional strategies are able to measure brand lift in traditional media, as well as social media. The Forrester report says it perfectly when they share that the key to measuring social media analytics effectively is to:
- Define your objectives
- Select the brand attributes that fit those objectives 9awareness, purchase intent, preference, brand association, etc.)
- Plan surveying methodologies to measure the impact on consumer perception
Overall, social media is maturing, and so must the reporting and analytics that business provide for themselves and their clients. As social media matures, its metrics will not only gauge activity (retweets, mentions, reblogs, comments, shares, impressions, etc.), but also the business outcomes and its overall objectives. Social media will also shift from short term goal-setting, to long term goal setting, as businesses begin to realize that social media is here to stay, and has a tangible impact on their business.
Lastly, instead of trying to fit ROI into every campaign report, social media analysts will understand that not every social media program needs ROI to deliver business results (and when analysts try to fit ROI into the report, many times it stretches the facts and the ‘results’ cannot be backed-up. Classic square peg, round hole). Even though businesses do not know the true value of their website, Facebook Fan Page, or company blog, they will increasingly understand that it is impacting their business, even though ROI metrics are not readily available.
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What are your thoughts? Do you think that ROI for social media analytics campaigns is mandatory? Is it possible to calculate in a quantitative manner?
Find the full Forrester report here: Forrester: The ROI Of Social Marketing
by Brienne Torley is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 Canada License.