we can’t stop moving

Social media - But does it

make money?

If executed correctly, Social Media can provide reliable returns as well as be an invaluable marketing tool.

Can social media provide roi?Short answer:

For the longer answer, we must first go through some basic concepts...

ROIKeeping it simple: you put money into marketing and expect sales to increase as a result. If you make more profit on sales than you spent on marketing, that is a (positive) return on investment.

Return On Investment

ROISocial Media

• increase in brand equity, fidelity and loyalty

• improved brand perception• efficiencies in customer

satisfaction / service• increased sales• cost-effective customer insights

and research• efficiencies in PR• efficiencies in advertising

product and service launches

Social Media, if done right, is most often used to provide the following types of ROI: Types of ROI for SM

where you are

where you want to be

To establish ROI, you need to know (and measure) where you are and where you want to be constantly:

example: sales, footfall, clients database, site traffic, customer sentiment, brand equity, etc.

Where am I?

know numerically what your goals areAB

Most companies don’t have the tools in place to measure where they are in respect to their goals. This can be the single biggest hurdle to measuring ROI in social media.

84% of companies don’t measure ROI

in social media

source: Emarketer

Here is the big problem

Sales

Number of followers

To Know whether you have had any returns, you need first of all to set up ways of detecting the real impact of social media on your returns. Each company will have different ways of measuring this and different goals - perhaps you will need to start from scratch, but these measurements are essential to analysing your returns.

Fans

Clickthroughs

Footfall

time spent interacting

Measure, measure, measure

efficiencies

returning visitors

*Each brand will have a different set of measurements relevant to them, the above are just a few examples.

digital leads

Positive mentions

Site visits

Negative mentions

customer feedback

Blog posts

referral links

loyalty

biggest spenders

you need something like this

time

sales

sales

social media activity

normal sales for period

In our quest to map out the effects of Social Media and ROI, we should have something like this:

Once you have you measurements in place, you need to look for correlations between data. This is the secret to measuring ROI in social media.

Correlations

time

sales

sales

social media activity

normal sales for period

time

sales

sales

social media activity

positive correlationsuccessful social media campaign

no correlationunsuccessful social media campaign

normal sales for period

Once you have you measurements in place, you need to look for correlations between data. This is the secret to measuring ROI in social media.

Correlations

Correlations between measurements should not be mistaken for causes. Just because something happens when an event takes place, does not mean it was directly caused by that event. Correlations are here to help identify ROI, they do not offer 100% certainty, but are our best tool for measuring ROI in Social Media.

disclaimer 1!Just as correlations don’t give you 100% certainty, we should also make a note about ROI vs Marketing: ROI is a financial measurement and Social Media is (in this context) a marketing effort. Marketing does not sell directly anything, but rather increases the probability of sales. So by trying to match ROI and Social Media we are measuring much more the probability of sales than sales themselves. We are looking at influence.

disclaimer 2!

Moving on - Define SuccessBefore going out and trying to find out ROI in Social Media, you need to define what your goals are in a measurable way.

What does success for your brand look like?

Brand Awareness More site visits, more mentions in social media, fan pages, high ranking SEO, etc

Sales

Brand Engagement

Customer Service

In store sales, online sales, user journey in online purchase process, higher conversions

Video demonstration views, time spent on website, number of shares of embedded content, etc.

Number of customer interactions, Visitors to education resources, reduction of calls etc

*Each brand will have different measures of success relevant to them, the above are just a few examples to illustrate possible real world scenarios.

A sample social media campaign

landing page

• Increase 25% Sales through Social Media Channels• Increase positive mentions by 50% (reduce negative by 25%)• Achieve average of X views of landing page per day

campaign•Page views• Visitors•Avg Time spent on page•Bounce Rate•User Journey

sales• Increased?• Correlation with Social

media data?• Increase in purchase

attempts?• Increase in landing

page visits?

• Extra Sales / Campaign cost $$

•Potential customers in database

• Customer Insight• increased awareness

roi

Example Goals

Measured! Now analyse your data

Do you see any trends? Is traffic up to your store after posting on Facebook or Twitter?

Does store traffic correlate with more sales when evaluating that same data? Does a higher sentiment analysis on Twitter lead to more sales or more visits?

Finding trends and tracking them back to their point of origin is the key to measuring ROI.

Quantity vs QualityBe careful when analysing data - sometimes numeric growth does not always translate to results. It is very important to qualify your interactions and not just be happy with increases. But be happy if you can answer yes to some or all of the following questions:

Did sales increase with increase in hits and

followers/ fans?

*Each brand will have different measures of success relevant to them, the above are just a few examples to illustrate possible real world scenarios.

Are your visitors returning and is your

bounce rate decreasing?

Are visitors spending more time interacting

and viewing more content?

Are visitors spending more time

interacting and viewing more

content?

Is brand sentiment online improving as

a consequence of your social media presence?

Are fans of your brand spreading your

message voluntarily?

Word of mouth has always been effective in increasing sales. Social Media is the digital equivalent, with massive amplifying potential (global audience).

Everyone knows Social media can deliver value and ROI, the difficulty is putting in place the measurements to prove it.

It comes down to justifying the spend

• Brand loyalty• Positive association to brand name• Increased public awareness and

brand recognition• brand engagement• improved customer service and

satisfaction

You can expect other types of return from Social Media, for example, increases in:

These returns will also translate to sales, only indirectly and will have a different life-cycle, possibly taking longer to monetise, and potentially having a much better cost-effect ratio than other types of marketing campaigns in the long run.

But wait, ROI’s not all

If online direct sales is your company’s goal, your sales results will be your ultimate measure of success. But for most brands, the biggest value Social Media will provide will be Brand Equity.

In the cluttered world of online communications, Brand Equity is quite an achievement. Social Media can now make or break a brand’s image online, with massive repercussions offline.

Brand Equity

why should someone buy your brand over

your competitor?

Conclusion

Once you’ve measured the impact of a successful Social Media campaign, you know Social Media can provide good ROI and you can then justify your Social Media spend.

We have gone over a few different ways of adapting the return to fit the needs of your business (sales, footfall, fidelity, brand identification, meaning, etc).

Don’t forget that ROI is not the main reason to get into Social Media - you will achieve much better results if you think longer term brand engagement, consumer insight and brand equity rather than short term ROI. ROI will come, but most likely within months and years and not days and weeks.

ROI yes, but not just that...

next steps...

Ultimately, we believe Social Media is an important part of any brands marketing arsenal. Consumers will talk about your brand whether you wan’t them to or not and there is great value in being part of the conversation.

Get in touch with us at W3Haus and we can answer some of your questions about how to measure your brand’s ROI in social media campaigns and also other questions like:

1) What does a social media campaign look like?2) What should my brand be doing? 3) Which services (Facebook, Twitter, etc) are right for my brand?4) How would i implement measurements for ROI for my company?

And any other questions we might be able to help you with.

You can reach us on:rodrigo@w3haus.comTwitter @w3hausuk

ok, what next?

For further details, please contact: rodrigo@w3haus.com

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