Social media marketing is everywhere. From pop stars to reality TV stars, from big brand names to small businesses, from internet marketers to MLM, you cannot be taken seriously unless you have a social network presence. It seems the more fans and followers you accumulate, the more popular you supposedly are.
Is anyone making money?
It is far from clear whether there is real value of social networking in terms of return on investment. How does this online media frenzy benefit your business or does it just burn a hole in your time freedom, outsourcing or advertising budget?
Research from eMarketer* indicates that almost half of brands are unconvinced that social marketing’s offers real value as a advertising investment, be it time or money, and has shown the lack of clear measurements of impact and ROI from social media marketing are the reason most social efforts remain low.
What is striking is the conclusion that “While relatively few marketers reported social was pointless and overhyped or too complicated to deal with, most are still not increasing revenues or otherwise profiting from their social efforts.”
In fact of the half that had some kind of social media marketing campaign going, only about a third felt it was making them money!
What can you measure?
In an attempt to crack the complexity, Cisco have developed a social media measurement framework as a guide and resource for their internal teams to help determine what and how to measure for their social media programs and initiatives.
The measurement “streams” group the most common goals and ties them back to potential key performance indicators and metrics to track them. Hard ROI type quantitative impact measures are certainly difficult to pin down for social media marketing. The environment is completely different to the straightforward cause and effect of most pay-per-click advertising strategies.
With social media marketing, you have to track what is happening in the wider sense first, and extrapolate, thus assessing some of the softer benefits than can have a financial impact further down the line.
6 ways to assess ROI
Here are six ways you can start to assess whether social media marketing is working and your business is actually making money online:
1. Have a clear strategy for your social media marketing. Decide if it is for brand awareness, reputation building, networking, lead generation. Set targets for number of followers or fans, number of leads and assess against daily, weekly, monthly activity over time.
2. Add tracking codes to every aspect of your social media marketing so that you can attribute lead generation to different parts of your strategy specifically and follow them through your sales funnel.
3. Analyse your costs per lead, cost per conversion, cost against earnings etc. For each tracked aspect of your social media marketing campaigns, such as tweets, Facebook posts or social network PPC, videos etc. right down to the specific ad copy for any given posting or page.
4. Analyse your demographics, by using your own tracking, Facebook reporting, or different twitter profiles, or with Google Analytics. Again, track through your entire sales funnel, from impressions to clicks to leads to front end sales to back end commissions to see if there are patterns of people (gender, location, interests etc) who convert highest and are thus most targeted ‘hot’ prospects to focus on going forward.
5. Incorporate feedback activities into your marketing, such as questionnaires (e.g. Survey Monkey) based on open, focus group type questions that ask specifically how people found you, what they like/don’t like about what you do/provide.
6. You should follow up on the ways people enter your social media marketing networks and build out your marketing from there. For instance, you can use tools in Alexa to see where people come from when they visit your site and where they go next!
These are the very basics metrics you should be reviewing. At its very best, social media marketing can be an effective way of attracting highly targeted prospects into your sales funnel.
However, the path to securing a real return on costs in terms of time and paid advertising has far more to do with building trust than selling technique. Social networks are not the place for blatant sales pitches, in fact businesses and individuals show their ignorance and lack of professionalism with that approach.
Rather, social media marketing has everything to do with the development of authentic relationships and giving good value and service to others, a strategy which fosters social proof, long term customers and loyalty.