Marketing Babble

What is social media worth to a business? How should we go about valuing activity or analysing a strategy for social media. How do you prove the ROI? And what metrics should be measured to make such a proof? All these questions surround marketers every day our activity in social media grows, so I thought it would be a useful to define 5 key areas to do this:

1. Determine the Return on Investment

What is the direct return to the business for the investment of time, resources and cash and the possibility of revenue back? This is simpler than it looks, you simply need to keep a record of what the investment costs are inputted against the outputs from the activity.
Some examples of what outputs you can track:

• Successful referrals from links seeded within social media, which leads to conversions or sales
• Uptake of exclusive promotions run off social networks
• Number of leads generated that converted via social media
• Tracked links from advertising creative hosted on social media hub/brand pages
• Trouble-shooting or customer service reduction costs via handling within social media

2. Be measurable yourself

What objective does your strategy aim to meet? Whether its lead generation, customer service, brand engagement or traffic acquisition, being accountable against what you set out to achieve with your social media strategy is key to providing a top-line summary of success.

If you have previously engaged in social media and are testing a new strategy it is good to also have a grasp of what you have done to date and what has worked and what hasn’t, to help shape these new objectives and move forward.

Be realistic with your goal-setting too- having a reachable target aligned with your investment makes more sense than chasing 1million friends or fans just because brand X has that many. The set objectives will help focus the mind on concentrating on only the tasks relevant to that goal too.

3. Resource Requirements

What was inputted in terms of time, budget and team resources to meet the objectives? What is the total cost of social media to the business?

Can you breakdown the activity into specific tasks such as responding to customers, number of content posts or identifying conversations about your brand? And what is the resource required to report on this activity and provide analysis?

Having a measurable metric for investment, to be compared with other areas of the business can help with the justification of activity.

4. What is the value to the business?

This goes beyond simply the ROI measured from the number of email addresses collected from an exclusive Facebook campaign you ran last week, and instead it measures social media against the wider business and its objectives. For example, are you seeing an increase in brand affinity or awareness over time, or extending the reach of a given campaign, or positive sentiment to a particular product.

Social media can also be used as a great medium for customer feedback and suggestions for improvement of service. Are you thinking about how social media can positively effect you brand over the long-term?

5. Testing and Optimisation

As with all areas of marketing, strategy and assumption can only take you so far, but where you can really hone a campaign is testing and optimising performance. Therefore, benchmarking at the start of any campaign is key to measuring the success of a campaign but more importantly to help optimise as you go.

Determining your KPI’s (Key Performance Metrics) will define what metrics you will be looking to study and move during a campaign but in order to optimise these it is important to have a contingency strategy in place if things don’t go according to plan based upon your analysis of these performance indicators.

Having a list of the possible variables you can move during the campaign, whether that is budget, creative testing or team resources, is also a good exercise to plan for acting upon any under-performance.

Remember that analysis paves the way for decision-making which in turn should lead to execution or the shaping of a new strategy. If your test has not met the objectives, why? What would you do differently? Then go do it differently!

So this is the five areas I would consider when assessing activity in social media, but it is by no means an exhaustive list. Please share your experiences and critique on this post…