Is measuring ROI from social media that valuable?

Over 1 billion expressions are created on social media every day.  Knowing this, brands are aggressively placing social media at the fore front of business strategies as it holds great potential for marketers to tap into a new found form of marketing data. But how does one measure the success of social media? Is there a direct link between social media activity and ROI?

According to a study from Econsultancy & Adobe, “60% of marketers say engagement is still the only reliable way to measure social media ROI.”

Where does one begin to understand the ROI potential?

1. Establish what your engagement strategies do for your business at present e.g. is it driving new traffic to your website, an increase in online or offline sales and/or keeping existing customers coming back - are these strategies working? An increase in the number of likes, shares, retweets, fans & repins do not qualify as the usual KPI measures and do not equal true engagement.  Top quality engagement is turning those activities into sales.
2. Work intuitively to engage your community (your audience) & understand their goals, as they are likely to not be in line with your business goals.
3. Invest in tools that can track engagement impact that use brand mentions; follower & fan growth (impressions); click through rates to mention a few.
4. Once the tracking tools are in place, an in-depth understanding of the metrics is required to fully understand all interactions available. One cannot view any single social media channel of a company in isolation to determine ROI. All components need to be taken into consideration.  Richard Mullins, Director at Acceleration, says “marketers who are serious about social media need to start thinking about data architectures and analytics tools.  It is a complex and specialist field…the value can be immense".

The truth is, as there are in fact plenty of ways we can gain insights into ROI from social media, through  various platforms– we will NEVER be able to account for every single tweet, share & like.  The social media world out there is far too large & intertwined that ROI cannot be measured for every activity as they happen.

We can however encourage marketers to not get caught up in defining exact ROI figures but to shift their focus to the  more “soft “ approach, which is listening & talking to your customers to learn more about them  i.e. engaging with your customers. 

Ask yourself: “Is the short term tangible ROI more valuable than the insight I gain from long term engagement with my customers and the business potential there of?”

Ros Siddle, Marketing & Loyalty Research Manager, Truth