Social Media ROI Measurement: Holy Grail or Destined to #Fail?

When it comes to social media, many businesses are still scratching their heads over how to participate, where to communicate and most importantly, how to measure success. Ever since web marketing began, the main advantage it brought to the table was the ability to track everything: impressions, ad clicks, user activity on-site, and hopefully, sales or conversion of some sort. Fast forward ten years and a social media revolution has emerged; people are now more influenced by online word of mouth than advertising. Smart brands know they need to get involved, but may be a bit leery over transparency and lack of control they have, since consumers are now part of the brand conversation. Moreover, branded social media campaigns lack the standard process and metrics of online advertising. You don't just pick a target audience, find contextually relevant websites and throw a banner ad up hoping they see it and take action.

So, let's say a company has chosen to participate in social media marketing. What's next? Hopefully, they've set goals and built a strategic plan because they know without one they cannot determine success. They've researched where their customers are mainly participating online and decided on which tools (websites) to engage with them. They've also created a content calendar because they don't want to be one of those ghost pages on Facebook or Twitter with little or no content.

So how will they track success and what metrics will they use?

First, it's important to remember that social media engagement is smart for business. As you can see from this video, companies that are social gain more business than those that sit out.

However, to strictly tie social efforts to sales would be setting up to fail. There are so many more intangible factors that indirectly increase revenue through a variety of methods including customer service, retention and brand awareness. Just servicing peoples' inquiries alone through social channels saves valuable inbound call time. Furthermore, by showing people that you are actively involved in generating relevant and interesting content that tells your story, they will in turn share your message with their peers. That is the nature and power of online social communities.

In summary, try to find ROI metrics that make sense for your company. They may be as simple as tracking followers' clicks to your website from Facebook and their activity once there (assuming you have analytics), or the number of responses you receive from your postings and an increase in followers. Advanced tracking would show soft sales tied to postings, couponing, contests and better ranking in the search engine rankings.

Regardless of what you do socially or how you measure it, you must get involved and experiment. Or, as the Socialnomics video points out, what's the cost of doing nothing?