Francisco Marco-Serrano, senior lecturer in economics and module leader for social media marketing at GSM London, explains how to demonstrate social ROI to your board
In 2014 it is unlikely that any decent marketing strategy is not going to at least mention social media, but there is still a lot of uncertainty regarding the tangible financial outcomes of investment in social media marketing. So, what should marketers be doing to demonstrate this tangible ROI to their boards
1. Recognise measuring ROI has its own ROI
It does take time and resources to be able to effectively measure on ROI social media, but in doing so you will be able to show the value of this activity to the people in the business who hold the purse strings. Any good business is only going to continue to invest in those activities that are having a real impact on the bottom line. When it comes down to discussions of finance it is easy to dismiss more objective and tangential evidence of impact for example the number of shares or likes for a post. These forms of evaluation are valuable and are an easily measurable way of showing reach and reputation but it is important to look beyond these more easily accessible sources of data to be able to extrapolate real, financial value to the organisation.
2. Social media is not an isolated strategy
Or at least, it should not be. Regretfully, many organisations, moved by the novelty are experimenting in outrageous ways; yes, innovation is the key to success… but can drive you to the abyss, as well. Make sure your digital strategy is aligned with your company strategy, as you would do with any offline movement you would make.
3. Understand your target market
Any business needs to understand how its target market becomes aware of its brand or product. Social selling gives marketers a much clearer way of tracking this journey through the standard social media metrics of which you will already be aware.
To make the most out of this information you need to be able to adapt your measurement strategy for your target market. What type of interactions are most valuable in driving that progression to action or sale amongst your target audience? This is another trendy conversation in the new media industry and clientele alike, which are the benchmarks: what’s the value of a Facebook fan?, how much for a Twitter RT?, which is the profitability of a Pinterest pin?; difficult to say, hard to quantify, but let’s move to #4.
4. The key to success is ‘testing, testing, testing’
You should always take a structured approach to measurement and readjust your activities to those approaches or techniques with better performance. Which tools work best for you will depend on your industry, your business and your customer so test out different techniques to find out which is going to suit your needs best.
There are an increasing number of tools at our disposal to help in bypassing the ambiguity that comes in determining whether social media has contributed to a sale. These range from very elaborate statistical techniques (e.g. marketing mix modelling which FMCG companies are now using to assess their ROI), to more simple statistical techniques such as correlation analysis (which can be put into action by means of a simple spreadsheet). You can also use affiliate marketing strategies which allow you to trace back the source of the conversation, or even, simply asking the customer (either at the point of sale, or afterwards by means of surveys). I would always recommend trying out at least one of two techniques first to see how they can be adapted to fit with the needs of your business before you start applying more and more resources in your quest for social media ROI (remember #1: the ROI of your ROI measurement).
5. Nirvana comes and goes
So, you succeeded. Now, keep working on it; this is neither the 1950s, nor 2000s… today’s happiness can become tomorrow’s sorrow. Even if it worked, do not retreat in your measurement strategy; remember, this is warfare.
