How Do You Measure Social Media ROI for Your Business?

It’s pretty obvious by now that using social media isn’t just simply setting up a Twitter account and a Facebook page. It isn’t just about broadcasting your message or giving your sales spiel over and over again. And it isn’t always easy to measure the return for your efforts once you do get your hands dirty with social media and marketing campaigns. But it is important that you do attempt to measure the results, whether you’re using the information to adjust your tactics to those getting better results, or you are asked to justify the time and money spent on it.

A recently released report from Altimeter, called Social Media Analytics: A New Framework for Measuring Results in Social Media, gives us a solid framework to begin to build our own measurement strategy:

“Marketers around the globe are ranging from toe dipping to jumping all the way into the social marketing space –yet most lack a measurement yardstick.  While experiments can fly under the radar for a short term, without having a measurement strategy, you run the risk of not improving what you’re doing, justifying investments, and the appearance of being aloof to upper management.  To be successful, all programs (even new media) must have a measurement strategy, and we’ve done just that.”

The report is a collaboration between Jeremiah Owyang of Altimeter and John Lovett of Web Analytics Demystified, along with a whole host of skilled contributors. I think this report is a huge gift to the social media and marketing community, as they’ve released it with a Creative Commons license, so others can also build on and customize it for their own (non-commercial) use. But even if you have no need to add to it, this report is a great starting point for those interested in setting up measurement standards for their own efforts.

Social Marketing Analytics is organized around four main business objectives, which serve as the foundation for measuring social marketing efforts, according to the paper. These four objectives, Foster Dialog, Promote Advocacy, Facilitate Support and Spur Innovation, also have Key Performance Indicators (KPI) attached to them by the authors, although they could easily be adjusted to fit a particular business if needed.

Along with the KPIs, the report lists vendors to watch for each particular indicator, and the authors also state “There is currently no single vendor that can effectively measure all aspects of social media.” Many businesses are using mashups of different vendors for measuring different indicators, and building a ‘social media dashboard’ for listening (and engaging customers), is usually one of the first steps in social media strategy, although it may be that collecting all of the data with no clear objective or standard might be simply an exercise in collecting data.

In reading Social Marketing Analytics, I was impressed by the details included for each objective, especially the formulas given for measuring and tracking the metrics in order to create a baseline and see the changes which happen with properly executed campaigns. I highly recommend reading and downloading the report for anyone involved in marketing or social media. It’s a valuable resource, even if all you do is use it as a jumping off point for your own efforts.

Derek Markham[Derek Markham is a writer, a father, a WordPress addict, and social media butterfly who loves to share what’s new and interesting in his world in under 140 characters. Hit him up with an @ reply anytime!]

Image: © ktsdesign – Fotolia.com

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