The number of companies integrating social media into their marketing campaigns has been growing steadily over the past decade. Some businesses even rely solely on platforms like Facebook, Instagram, and Twitter to promote their goods and services. However, measuring the impact these campaigns have on their business remains a challenge.
A 2015 CMO survey underlined this difficulty, with only 15 percent of participating marketers being able to quantitatively measure the effectiveness of their social media marketing plans. Meanwhile, a recent MDG Advertising infographic shows that not much has changed with regards to measuring the effectivity of social media marketing and its impact on a company’s ROI.
According to the accompanying MDG report, only 20 percent of companies said they were able to determine the success of their social media campaigns while 44 percent could not determine social media’s impact on their business. This problem also affects marketing agencies, with 28 percent facing challenges in measuring the effectivity of social media. However, 55 percent of said agencies claim they could somewhat determine the ROI generated by social media while a mere 17 percent could accurately measure it.
[Graphic via mdgadvertising.com]
Because social media is a relatively new (and constantly evolving) marketing channel, measuring its true impact of ROI remains a conundrum for many businesses. What’s more, a lot of companies remain unsure of social media’s place in the big picture.
There are other reasons why measuring social media impact remains complicated.
- Businesses Have Different KPIs: Brands have their own goals, values, and propositions and the Key Performance Indicators (KPI) they want to measure depend on these. However, KPIs can change depending on the direction the company wants to take. This makes it hard to set specific metrics and data points.
- Data is Limited: Each social media platform has its own set of analytics. Some tools engage followers while others show demographic information. It would also require companies to do a lot of mining just to put everything together.
- Qualitative Results are Hard to See: It’s easy to see quantitative results such as the numbers of comments, likes, and shares. But the more important question is the kind of action consumers are actually taking — the qualitative results. For instance, are they buying products or just sharing content?
- Business Impact is Hard to Determine: ROIs are about returns and investments. Even if companies are able to tie their social media campaigns to their KPIs and business goals, most remain confused as to what it means for their bottom line. Companies would have to consider the number of people working on social media accounts and their salaries, social media software, and advertising costs and compare them against KPIs.
Despite the ambiguity, social media does have a positive influence on a company’s sales and revenue. The question now is how to measure and quantify this impact. Knowing the following metrics of your campaigns can help you measure their effectiveness:
- Click-Through Rate: While click-throughs are a key metric, companies should do more than just track clicks. They should also focus on metrics geared towards specifically designed landing pages and content. Companies should also look at click-throughs in relation to bounce rates. High bounce rates imply that the site’s content is not delivering on the call-to-action or headline’s promise.
- Conversions: Whether it’s a sign-up, filling out a form, or an online sale, companies should have a goal when it comes to conversions, especially when creating paid ads. This is significant as it provides direct ROI numbers. Conversions are also relatively easy to track. Some companies utilize lead generation forms while others opt for pixel codes.
- Engagement: This metric is more than just the volume of likes a page or post has since it doesn’t give a clear indication of commitment. A meaningful engagement that results in brand awareness, product interest or sales are the best testaments to the impact of social media activity. Companies should put real effort into having a dialogue with their audience and influencers.
- Traffic: Identifying the actual value of traffic is about checking the share of driven traffic and the actions generated by click-throughs. Tools like Google Analytics makes tracking the impact of social media on site traffic simpler. Companies should look more closely at how much of the site traffic was driven by social media since this will provide you with concrete numbers that you can work with.
Remember, you can’t market what you can’t measure (at least not effectively). So, before you run a social media campaign, be sure to set up adequate analytic tools that measure the data that correlates with the outcome you desire. For many businesses, picking the right tools and correctly assessing the data they collect comes with a learning curve. However, once you get past that hurdle, you can use the data to grow your business by leaps and bounds.
[Featured image via Pixabay]