How do you prove social media ROI? Hmm…this is a tough question, and one that all of us social media marketers are increasingly being asked.
And sadly, the truth is: most brands struggle to prove how social media contributes to the bottom line. However, it doesn’t have to be that way!
We caught up with Sabrina Rodriguez, Global Head of Social Media & Content at Dentsu Aegis Network, to hear how she and her team are getting social media recognized by the C-suite.
In the video, Rodriguez explains how she is using insights collected via social media to create real business value. Additionally, she provides some actionable advice on how to avoid common social media pitfalls when it comes to demonstrating social media ROI.
Interested in watching more videos related to social media marketing? Then check out the video recordings of the keynotes and breakout sessions from our digital marketing conference, Spark.
Getting started measuring social media ROI
Social media now accounts for 13.8% of marketers’ overall budgets, according to the latest CMO Survey. And as Rodriguez pointed out in the video, “social media is massively important for business,” however, many are still not convinced of the value it brings to the business.
So although investment in digital channels is expected to increase in the next five years, many c-suite executives are still asking: How has social contributed to the company’s bottom line?
“I think a lot of challenges for businesses when it comes to talking about the value of social is really about the mindset,” says Rodriguez. She adds that understanding the importance of and measuring the impact of social media requires a “change in mindset” from both social media managers and senior leaders, according to Rodriguez.
In order for such a shift to take place, as a social media manager you need to first understand which social media metrics you should and shouldn’t be focusing on. (Hint: Vanity metrics such as ‘likes’ don’t make the cut).
Luckily, the major social media networks now offer long, long lists of metrics and ad objectives that you can use to measure your social media marketing performance.
We’ll cover a few of these important social media metrics later on. But before we dive in, it’s important to note that there’s no one-size-fits-all solution for when it comes to measuring social media ROI. However, by following the steps laid out below, you’ll be well on your way to knowing how to best approach the subject.
So, how can social media managers demonstrate social ROI? As we mentioned above, it starts with knowing what metrics to be focusing on.
The social media metrics to avoid
“It is really easy to be seduced by vanity metrics,” which is why marketers must try their hardest to look beyond things like ‘likes’ or ‘followers’ when it comes to proving the value of social media, says Rodriguez.
Definition of a vanity metric: Any metric that doesn’t help you make decisions or help your company reach its business goals.
We don’t need to tell you that saying things like ‘this post got tons of likes’ isn’t going to be enough to convince your boss to put some extra budget behind your next campaign. So here’s a list of metrics you should be careful to avoid.
Pageviews: This social media metric only show you how popular your content is, not how engaging or meaningful the content itself is. When it comes to traffic to your website from social, it’s more important to understand whether or not that traffic is coming from your target audience and how much time that audience spends interacting with the content. That’s why it is more meaningful to look at metrics like time spent on site, bounce rate or sessions than just pageviews.
Social media followers: Being popular on social media can be helpful—but only if your audience is engaged. Instead of calculating social media ROI based on your follower count, you might find it more insightful to focus on ‘engagement per post’ or ‘engagement per follower’. This information will help you determine whether or not your Facebook posts or other social media posts are in fact reaching your audience.
Additionally, ‘fans’ or ‘followers’ numbers can be easily inflated, which is another reason why this isn’t the most credible metric.
(Having a large social media following can help build valuable lookalike audiences when launching Facebook advertising campaigns, if your follower base accurately represents your target audience).
Video views: Facebook’s video view metric shows you the number of views your video had passed the three-second mark. And while it may feel great that people are watching your video, in all likelihood you probably want them to engage with the content by sharing the video.
Page reactions: This is the total number of reactions across all posts in a specified date range. Reactions are usually more common than comments or shares, so you’d be wise not to base your reporting around this social media metric alone.
The social media metrics to focus on
Now that we’ve addressed a few of the Facebook metrics to avoid, here are a few that you can use prove the value of social media to your boss—or even your boss’s boss. However, the most valuable social media metrics for your business will depend completely on your business’s goals.
Page engagements: Facebook’s “page engagements” metrics count the number of unique people that have interacted with your page’s organic content. Why is this an important metric? Well, because social media is about being social and you want your audience to be engaging with your posts regularly.
Page shares: When someone shares your post on Facebook or retweets your content on Twitter, it increases the number of people that are exposed to your content. Additionally, a ‘share’ is seen as a more high-quality measure of engagement than a ‘like’ or comment by both LinkedIn and Facebook’s algorithms.
Bounce rate: You can measure bounce rate via Facebook Business Manager, but as a social media manager you should still be paying attention to this metric. Bounce rate is the percentage of people who visit one page on your website and leave without clicking further into the site. So, if you are sending people from Facebook to your website and leaving after one second, you might need to reexamine the type of content you are posting.
Referral traffic: Expanding your audience pool will help you draw new prospects into your marketing funnel. Just make sure that you use UTM parameters on all your links on social so that you can accurately attribute the traffic in tools like Google Analytics.
Sales: Using new features like Instagram shoppable tags it is now possible to directly attribute revenue to social. If you are not already using shoppable tags or brand giveaways, you can learn more about selling on Instagram in our How to Sell on Instagram: 6 Proven Tips For Marketing Your Business on Instagram post.
Return on ad spend: The Return On Ad Spend (ROAS) metric tells you how effective your social media ads are. So, a 50% ROAS indicates that you bring in 50 cents for each dollar you spend. That’s pretty good! This metric can be used to not only show how much revenue you are driving via your social media marketing but also as an indicator for how engaging your ads are.
As Rodriguez pointed out in the video, you should “start thinking about journey before you start thinking about metrics, and, only after you’ve done that, the diagnostic metrics you use to then measure that journey”. There are many different social media metrics that you could use to prove social media ROI, but the ones you should be tracking will all depend on your specific business goals.
Proving social media ROI requires “taking a step back and looking at the business – the wider business – to identify what challenges the wider business is facing. And then mapping out your strategy against a few of those core challenges.” That’s why the one piece of advice that Rodriguez has for social media managers is to ask more questions that will help them understand the business’ overall objectives.
And the more you understand what your business’ key objectives are, the better positioned you are to craft a story that resonates with your boss.
First, don’t focus on a singular goal or metric. If you are only focused on driving follower growth via your social channels your team will begin feeling stressed out if their performance is only measured on a single criterion and you could be neglecting potential value creation opportunities.
Second, don’t forget that your social media channels and communities are an absolute gold mine of data. When you are developing new business strategies or products, remember to think about how social insights can help drive value for your business.
And finally, get your entire organization involved in what you’re doing on social media – and include them in the process. The more you can support other departments in your organization, the more value you will bring. If you “think about all of the other areas of the business that you can drive value for, you will inevitably get invited to the boardroom to speak.”