Eva Taylor, Senior Manager of Global Marketing, Hootsuite
From customer advocates to YouTube experts and peers on all manner of social media platforms, the influence of everyday experts on how consumers discover, connect and buy makes social the right channel for digital growth.
Yet trying to prove the business impact and ROI of social media can be tricky for even the most experienced marketers. Consider that 80% of Fortune 500 companies have active Facebook pages but only 20% are able to quantitatively prove social media’s impact, according to Harvard Business Review. That can hamstring the most well-intended social program. In Hootsuite’s 2018 Social Trends survey, 56% of respondents said that not being able to prove the ROI of social media made it difficult for their organization to be successful with social programs and investments.
The reality is that traditional “vanity metrics” such as likes, comments and shares don’t show the true value that social media brings to the enterprise. Today, organizations are discovering the value social can deliver beyond top-of-funnel customer engagement—from lowering customer-service costs to attracting top talent. Some are even feeding social insights into supply chain analyses.
The result is that marketers must rethink their metrics as their social strategies mature, since strict ROI calculations – which divide revenue by cost – only capture part of social media’s value.
To solve the ROI puzzle, you need to be specific about what you want to achieve – from the business challenges you want social to help solve to how you’ll map business objectives to social KPIs. Until you’ve answered those questions, it’s difficult to “prove” social media ROI.
With that in mind, following are five elements essential to taking the mystery out of the ROI of social:
1. Build Your Social ROI Measurement Foundation
It can be almost impossible to measure ROI if you don’t have clear objectives in place. Set realistic goals and benchmarks that will allow you to quantifiably measure social’s impact on your business. Asking the right question is everything. Did you hit your quarterly business goals? If so, what contribution did social make? Create a three-stage framework: 1) Define what you want social to solve. 2) Measure by setting targets and tracking against them. 3) Prove that you hit your business goals. Using a measurement tool to unite organic and paid social data for its 11 media properties, Latin American publisher Grupo Expansión was able to turn social data into new revenue. A 70-person social team used insights from the data to tune content performance. And sales teams used the data to demonstrate the exact monetary value of promotion on social media properties, leading to new advertisers and revenue.
2. Use the Right Tools, and Consolidate
No matter what your goals are, measuring ROI is critical. A social analytics solution can help you measure ROI and use social data to influence strategic decisions across your business. More than 75% of organizations use at least three different platforms to manage their social media, according to Hootsuite research. Consolidating social media technologies into one social media management solution enables you to share key learnings across the organization, and measure the impact of social at a strategic level. In Fairfax County, Va., for example, county officials united 40 departments on social media through an integrated platform. With one secure system, they can tie social media activity back to practical outcomes such as boosting clinic visits, keeping citizens safe during natural disasters, and even finding homes for pets. How’s this for social ROI: By creating engaging content on social media, the Fairfax County Animal Shelter decreased pet euthanasia rates from 28% to 13%.
3. Measure ROI Beyond Revenue
Not every organization needs to increase ecommerce purchases or prove direct revenue from social. You can extend your measurement model to include business goals such as brand awareness, customer service, and other KPIs. For example, at DaVita – one of the largest kidney care companies in the U.S. – the goal wasn’t to increase revenue but to educate the public about kidney disease and raise awareness of kidney care with targeted social content. The program led to an 82% increase in completed risk assessment quizzes and a 90% year-over-year increase in kidney education health appointments.
4. Prove (and Improve) Your Paid Social ROI
With so many social advertising metrics available, it can be hard to know which matter for your business. It’s important to set goals, choose the right metrics, measure your return on ad spend, and get the most from your social advertising budget. Among the key metrics every marketer needs to know are things like return-on-ad-spend, cost-per-thousand and cost-per-acquisition. Running social ads can take a lot of the guesswork out of measuring ROI because you know exactly how much you’ve spent on your ads. But a lot of costly employee time can go into any project, so it’s important to include such resources when calculating the cost of your investment.
5. Get Executive Buy-In for Social
Finally, all the skill and passion in the world won’t help you scale social media across your organization unless the executive team has bought in to its value—and is willing to invest the time and resources to make it work. Share your social progress with executives on a regular basis through reporting. Start with a small number of metrics with a plan to track and share larger-scale metrics over time. Another terrific way to get buy-in is to get your leadership active on social. A socially active leadership team sets the tone for an entire organization to scale out on social.
Don’t wait for the perfect ROI model. Proving and improving the value of social means learning as you go. Unlike data tracked in website analytics, social data is unstructured and varied in format since it comes from different public sources. It’s better to get comfortable with a few assumptions. You’ll trade a bit of accuracy for speed, helping you quickly adjust budgets and tactics.