ROI on social_fi

Social Works Hard for the Money: How to Identify the ROI of Social

PHOTO CREDIT: Viral Blog

In the second post of our Back2Basics series, Leigh George PhD, a Vice President with Social@Ogilvy Washington, takes a closer look at ROI in social media. 

In case you missed it, see Part I: When Does Content Marketing Become Native Advertising?

In September, I spoke on Social ROI at the Mid-Atlantic Marketing Summit in Baltimore. The talk received an enthusiastic response online and offline. It really seemed to to fill a need.

From the feedback I received, I had the clear sense that though people knew the importance of social media to their organization, they hadn’t been able to communicate it to management in a persuasive way. The problem, and what really inspired my talk, is that we’re using the wrong language to measure the impact of social media.

Why should I spend my money on social?
We’ve all faced or imagine facing this scenario. Your client or boss leans forward in her chair, stares you down and says something like, “Direct clicks from social are contributing less than 1% of total sales. That’s abysmal! Explain to me again why we’re wasting our time with social media?” Executives, of course, want to see the business impact of any initiative they invest in, but digital marketers have instead focused on the complete opposite. What’s going on here?

Most of us are measuring the wrong stuff.
Instead of measuring hard business objectives that demonstrate the business impact of social media, we’ve become fixated on whatever metrics social networks will give us: fans, followers, retweets, pins, posts, and on and on it goes. Even though the social data we collect are vanity metrics—numbers that do nothing but reflect back on the platform they came from—how can we not report on them?

They’re often big. They go up and down. They’re mesmerizing. We need to step back and take a breath and realize that just because we can collect this data doesn’t mean we necessarily should. If social metrics don’t provide insight into business impact, what does?

Use a results-focused measurement framework.
If what we want to do is understand the impact social has on moving people toward action, we need to identify true key performance indicators (KPIs). The metrics social networks provide we mistake for KPIs are really just diagnostic metrics or levers we can adjust to impact the true performance metrics in a customer journey we should measure: reach, preference and action. If the data we gather can’t directly provide insights into any of those key points then it isn’t a KPI, it’s a diagnostic metric.

Incorporate measurement early and often.
Here’s a trick question: When do you measure? The answer you usually hear is “at the end of a campaign”. Beep! Wrong! Measurement should be incorporated into every stage of a social program—even before work officially begins.

  • Make sure there is an analytics expert in pitches who can speak to measurement models
  • Identify your business goals and strategic objectives at the outset
  • Set benchmarks to measure against during strategy and activation planning
  • Continue to monitor and conduct interim analyses when the program launches
  • And of course provide a final report on the total business impact of the program

Social media is seductive. The numbers are so readily available it’s easy to get distracted by vanity metrics. Just remember: measurement should always track back to hard business goals. If you start veering into the territory of social metrics, you’re heading off course.

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