Can You Calculate Social Media ROI?
I’ve been a bootstrappy, DIY, organic lead gen, jargon-slinging social media pro since way back.
What I mean by that is, my social media and content marketing clients have been small and medium businesses and nonprofits. Even when I work with big Fortune 500 companies, it’s typically with a small internal business unit within one of their marketing departments.
And that means, so far, I have not had the budget to work with enterprise-level social media monitoring tools.
I’m told that these tools are the best thing since sliced gluten-free bread. They can do everything from tracking your social shares and sales to planning your next vacation and teaching your children to speak in cascading style sheet.
Hey, c’mon now, that is impressive.
Indeed, I’ve even had job interviews with a few of these platforms, which is to say, startups in Austin. I failed to secure offers from them, I think, because of the way I answered this very question:
Q: Can you calculate the return on investment (ROI) for your social media marketing efforts?
A: Um, kinda. Sorta. I mean, how do you guys feel about anecdotal tracking?
Still, I contend that’s a better answer than, “What’s the ROI of your mama?” For realz, I’ve heard this offered by grown-ups in professional settings.
The Year of the Dragon. The Year of the Metric.
I remember when the calendar rolled over to New Year 2008. All the social media rockstars were tweeting that this would be the Year of Social Media Metric.
It had been foretold.
It took a year or two before they started trumpeting the Year of the social media ROI epiphany.
There should have been placemats, you know? Like at Chinese restaurants. And firecrackers. (Everybody likes firecrackers.)
For all of our hand waving across all these years, we’re still early in the game, and we’re still chasing this elusive social media ROI. Finding it, measuring it, reporting it. We’ve managed to put a lot more words around it. We’re closer.
It’s Like Our Own Little God Particle.
We’re narrowing in on the Higgs-Boson of Social Media, you guys.
Let’s look at some numbers.
In Content Marketing Institute’s most recent survey and report, B2B Content Marketing 2015: Benchmarks, Budgets, and Trends — North America:
only 21% of business-to-business (B2B) marketers say they are
successful at tracking the ROI of their content marketing efforts.
only 23% are.
I can’t help but wonder:
- Are the 20% who “get it” working for big enterprises and, as such, they have access to those whiz bang social monitoring platforms and their Big Data Metric Crunching Engines?
- Just because you can measure the ROI doesn’t mean that it’s tracking on an upward trend line. Or any line.
- Just because you can’t reliably measure ROI for your C-Suite patrons doesn’t mean that you’re throwing stuff against a wall hoping it sticks.
- Can I misapply the 80/20 rule here and invoke Pareto and his Principle?
So Many Social & Sales Metrics Make Tracking Tricky.
Say that three times fast.
Some Important Metrics:
Most importantly, how do you calculate Your Break-Even Point? That’s where sales generated, or at least supported by social media and content marketing activities, offset and exceed the cost of said activities.
You can’t if you don’t know both sides of the equation–money in, money out.
Obligatory Mention of Non-Fiscal Returns
Look, I’m a strong proponent of building community, growing audience, and adding and tightening connections between yourself, your brand, and your advocates, ambassadors, clients, and prospects. Not just between you and them, but connecting them to each other.
It’s a big tent. Let’s all do-so-di and help each other ’round and ’round under here.
There are profound, righteous, superhappycosmic reasons to do social media and content marketing aside from making money. Just ask the Iranians, the Egyptians, Ukrainians, and the Ferguson protestors who furthered the #BlackLivesMatter movement sparked by the Zimmerman acquittal.
This is how we exercise our Citizen Muscle, as Annie Leonard, that Story of Stuff dynamo, calls it. This is the stuff that democracy was founded on. The stuff of the republic. The one with the little r, for all of us, by all of us.
And yet, those are all just warm fuzzies and feel goods, right?
There Is No Cash-in-Hand ROI Until Somebody Puts Cash in Your Hand.
Technically, social media ROI is not a yes / no question.
Sure, you could ask it that way,
“Is there a return on your investment in social media and content marketing? Yes or no.”
But what we really want is hard data and meaningful numbers. Not meaningless numbers.
So, How Do You Measure Your Efforts?
Say you pay a highly qualified team to develop and grow a robust online presence for your small business. (Notice how I didn’t say, “Get an intern. Have them work on it over the summer.”)
You need to know that, in the first year, your team may not be able to show conclusively that their efforts have secured new business.
Does that mean you’re not getting a return on your investment in personnel and overhead? Does that mean your efforts have been for naught? That social media marketing isn’t worth doggone?
How can you tell?
(Does a hunch count?)
None of This Is Nearly as Rigorous as We’d Like. Sorry to Break the News to You.
And, that’s why all the handwaving in the blogosphere and on the conference circuit will continue. We content marketing pros will keep fiddling with ways and practices to find and track social media ROI.
We’ll all get there.
But, in the meantime, you can take a holistic look across various indicators and get a view into the fertility of your programs.
Sí, se puede.
We’ll look at a real-world example in the next post: Hyper-Local, Hyper-Anecdotal ROI for Fun and Profit. But first, I had to get all of the above off my chest to prep you a bit.
You see, I’m kinda embarrassed about the relatively weak and gratuitous scholarship that I’ve got coming down the pike. The thing is, it’s the most detailed and rigorous treatment I’ve seen around meauring return on investment and calculating customer value. Even still, it’s back of the napkin stuff and doesn’t scale into a process.
Until then, don’t forget that seeds take time (and sunlight, and water, and nutrients) to sprout. Keep funding your social and content efforts and building your assets.
As Dorie says in Finding Nemo, “Just keep sowing.” That’s what she says, right?