Since this is for a marketing course I should cover ROI. It’s been mentioned before but I haven’t talked extensively about it. There is no one standard for every organization to measure their return with social media marketing. The costs and benefits are, in general, different between businesses, industries and forms of social media; for some it is also difficult to determine what the return actually is, a lack of time or a lack of knowledge regarding social media networks. Though with all the tools available nowadays it is fairly easy to measure the ROI of social media marketing, or “social media measurement”. Further on I’ll be covering examples and some tools.
Social media being used internally will also be looked at.
Alright so first let’s go over some tools. First off is the mediums which is used, which will yield different results. Forums, wikis, blogs, vlogs, twitter, facebook, linkedin and so forth are just some forms of the mediums available. Each medium has specific tools geared towards it (i.e. tools for forums are different from tools for a wiki), though there are a variety so there are also tools for multiple platforms. Any of these mediums can be used internally, externally or for both.
The easiest tool to access would be Google’s Analytics; they offer social reports which help “measure the impact social media has on your business goals and conversions”. This is broken down into 3 subsections: sources, sharing and conversion. That’s just looking at the social reports aspect of Google Analytics features as the tool can be used to track various other statistics. Similar to Google Analytics is Alexa which offers various statistics as well as a ranking system. The statistics from Alexa are more specific than Google’s as demographic information is also provided, allowing for a more detailed analysis of the medium. Both can be used for ROI with the various information provided. Whether a target audience is being reached or not, or whether your social media initiative is creating any impact or not can be evaluated.
Google also offers it’s own ranking system called Google PageRank which is accessible from Google’s toolbar. However there are many, many more tools that can do a similar task. There are also other tools as well such as twitterfeed which creates an RSS feed from your Twitter (though it’s not limited to Twitter since you can also link it to other social media services as well).
There are various examples given within Groundswell by Charlene Li and Josh Bernoff which I’ve mentioned in previous posts; such as AFOL (Adult Fans of Lego) or Dell’s support forum. Both of these examples provide different types of returns for their respective companies and have different cost-benefits. AFOL generates sales, ideas and much more for Lego while on Dell’s side they’ve reduced the costs of having a full-fledged support center as well as an energized community for both which have been embraced by the companies. Another example is BestBuy’s Blue Shirt Nation which brought to surface ideas and talents. LoyaltyOne along with Northwestern and Ivey Business School released a report which indicated that consumer social media engagement lead to increased sales; you can read and download the full report here.
Here is a link to an infographic which summarizes the ROI of Social Media Marketing by MDGadvertising fairly well: here.
And here’s a short video on ROI from Investopedia:
