How Effectively Measure Social Media ROI
The healthcare industry is among many that are utilizing social media to engage patients and communicate valuable healthcare-related information. More than 40 percent of consumers say that information found via social media affects the way they deal with their health (Mediabistro). And, social media’s growing influence both on healthcare consumers and providers doesn’t stop there. Consider that:
- 60 percent of social media users are the most likely to trust social media posts and activity by doctors over any other group (Infographics Archive);
- 60 percent of doctors say social media improves the quality of care delivered to patients (Demi & Cooper Advertising and DC Interactive Group);
- 26 percent of all U.S. hospitals participate in social media.
Social media spending overall is expected to account for 16 percent of the digital ad market by 2017, according to research firm eMarketer. The question though, is how many people really understand the benefits and return on investment (ROI) derived from social media?
Measuring social media ROI is necessary
There are numerous reasons why measuring social media ROI is important, including:
- To prove the value of these investments to your organization’s overall goals and business objectives,
- To clearly see where efforts and resources are being used efficiently, and alternatively, to evaluate where resources are being wasted or not used as efficiently as possible,
- To identify gaps in strategy, key messages and content,
- To illustrate where your social media budget is being used most effectively as well as areas where it can be pulled back.
While there are a number of ways to gauge social media performance, including measuring fans, followers, retweets, shares, referral traffic from social media platforms and purchases made from social media referrals to name just a few, the fundamental problem with social media marketing is that there is no common denominator to measure ROI, according to Ad Age. In fact, the research firm TrustRadius found that demonstrating ROI is the number one challenge among marketers, with 60 percent naming this as one of their top three challenges.
So – now that social media has proven its impact among media channels, its return on investment must be proven, particularly to secure executive buy-in for funding social marketing strategies. The question is, how?
Following are five steps you can employ to measure the effectiveness of your social media efforts, according to Ad Age:
1. Identify your key performance indicators (KPIs)
Are you looking to drive revenue? Build brand awareness? This differentiation will determine what success looks like for your social marketing efforts.
If your goal is sales, ROI should be measured as a dollar value. By assigning a dollar amount to your conversion goals, it is easy to understand the impact of social media marketing to your bottom line.
Brand awareness can mean something different from one person to the next. To some, it might mean getting your brand in front of as many people as possible; others might want journalists to remember your brand name. It’s important to agree on one specific brand awareness goal.
2. Align your social media goals with your business objectives
For a campaign to be meaningful and measurable, it must be broken down into smaller, bite-sized goals. Again, these goals differ based on your overarching KPIs. For organizations looking to map revenue to social media, social media goals might be product purchases, customer sign-ups or free trials. Those wanting to track brand awareness might identify social media goals that include brand mentions, followers or impressions.
3. Set up Google Analytics to track conversions
The ability to retain and convert your audience depends on how informed you are about their behavior on your site. Nearly every single goal is measurable if you adopt the right approach. Google Analytics is a free tool that can be used to set up trackable goals and monitor how often visitors complete the actions you define.
4. Assign values to your KPIs
Once you have identified your goals and set up tracking, determine the monetary value of these goals. There are several different methods to choose from:
- Lifetime value – how much do you earn from each customer, on average?
- Lifetime value multiplied by conversion rate – how much is each potential visit worth to you based on the percentage that converts?
- Average sale – how much is the average purchase through your site?
- PPC valuation – how much would you end up paying if you were to use ads to achieve the same social media results?
5. Benchmark against your competitors
Compare your social media efforts to your competitors. This enables you to uncover areas of opportunity for your organization to stand out and be heard through the noise. Learn what platforms are most successful in reaching your target audience and how many posts competitors are publishing per day so you can see what works
There’s no doubt that social media can bring significant value. The key is to consistently work to improve your social media ROI by understanding the results of your actions.