How to Measure ROI in Social Media

© www.briancliette.com
How To Measure
ROI in Social Media
1

Brian A. Cliette
www.briancliette.com
@briancliette
2
www.superlinkjuice.com
Digital Marketing Strategist

Not Just Some Fuzzy “ Awareness and Connections”
Can Social Media Produce
ROI in Dollars?
3

Not Just Some Fuzzy “ Awareness and Connections”
Yes! Social Media
Can Produce ROI
in Dollars
4

You’re snapchatting
You’re Facebook
liking
You’re tweeting
You’re Pinning
5

These activities are great…
Are you tracking?
But the billion dollar question is
6

If you aren’t, you are not alone
70%
Statistics show that more than 70%
Businesses do not track their Social
Media ROI.
Considering the Estimated $3.1 Billions
spent on Social media in 2014, this
statistic is crazy.
$2.2 Billion
7

“3 out of 4 Marketing Executives are
unable to calculate ROI on Social
Media” - Domo Social Media
Without understanding ROI, It’s hard
to justify spending money on Social
Media marketing
8

What does ROI really mean?
9

In the FinancialWorld, ROI is
used to measure the financial
efficiency of an investment.
ROI is based upon the following
Financial Formula.
ROI = Return – Investment / Investment
10

So what about
ROI.... within the
Context of Social
media Marketing?
11

SIMPLE
A Marketing campaign with high ROI is considered
better and more efficient than a marketing campaign
with low ROI
12

Thus... the Social Media
Platform and or Campaign
that commands the highest
ROI should garn the lions
share of ad spend/effort.
So what about
ROI.... within the
Context of Social
media Marketing?
13

Social Media ROI
IR – E / E
Social media investment- the
amount of money that we
invested in our social media
campaign (E)
So what about the
ROI formula for
Social Media
Social Media Return - the amount of
value that we got from our social
media campaign(IR)
14

What’s Your Return On Social Media Investment?
15

Calculate Your Social Media Expenditure
HARD COSTS
Denote the work or
costs associated with
the project during
the campaign
SOFT COSTS
Calculate the soft costs
which include unseen
work that composes the
initial part of developing
a project during the
campaign
COST/TIME SPENT
Calculate the money
spent per time spent
on the social media
during the campaign
SUNK COSTS
calculate the sunk cost
involved during the
campaign i.e. a one
time purchase of
Social Media Software
16

HARD COSTS COST/ TIME SPENTSOFT COSTS SUNK COSTS
Calculate Your Social Media Expenditure
Social Media Expenditure (E)
17

Keep track of your media conversions
It's impossible to measure your return
on investment without knowing your
visitor conversion rate.
Ensure you can determine the number of
visitors traveling to your page from social
media accounts and the amount of those
visitors making actual purchases and or
other actions that directly relate to your
Social media goals.
18

Top 5 Metrics for Social Media ROI
REACH
The more Followers, Fans, LinkedIn Group members. etc.
that you have, the greater your ROI for any campaign or
promotion
19

TRAFFIC
Getting visitors to your website or another URL where
conversions happen is a major goal of any social media plan
20

LEADS
Maybe the most important social media
measure, this is the ratio of leads coming from
each social site.
21

CUSTOMERS
Track the number and social media-generated
leads that become actual customers.
22

CONVERSION RATE
Tracking the % of visitors by social media
platform or promotion piece tells you what's
working and what's not.
23

Defining and Adding a Value
to Social Media Return
24

Return On
Investment Not Return On
Ignorance
“Everything starts with an end in the mind”
Brian Solis
25

Social Media Return
is the Return on
Your Goals
And you can define such goals as
anything you want it to be.
26

Social media return is basically the
value that you derive from your
social media campaign based on the
goals of your campaign
27

Fans
Followers Comments
Likes
Are not Social Media campaign goals
28

Some Popular Social Media Goals
To Drive Sales To Drive Consumer
Insights
To Drive Brand
Awareness
29

To Drive Sales
If your social media goal is to drive sales, then
your social media return is the number of sales
that you can attribute to your social Campaign.
30

If your social media goal is to drive consumer
insights, then your social media return is the
quantity and quality of the consumer insights
you get from your followers(Cost savings versus
Offline Customer Focus groups).
To Drive Consumer
Insights
31

If your social media goal is to drive brand
awareness, then your social media return is
brand awareness.
To Drive Brand
Awareness
32

Deriving Real Dollar Value(s)
Real Dollar Value can be approached in two
ways
1. Using Historical Data 2. Guesstimating
33

Using Historical Data
If you know your Lifetime value (LTV) of each
customer, its easy to back track to conversion
value
EX. Is LTV = $200 and you know 1 in 20 people who
view your video become customers, then the value of
getting a visitor to view the video is $10 ( $200/20) x 1
34

Guesstimating
How much would it cost if
you had to pay for the
equivalent achieved by
social media?
How much are you
willing to pay per
signup?
Cost Per Paying
customer?
Amount labor hours
saved in Tech support?
Cost per lead?
Advertising Value and cost
for equivalent leads?
Use that value
35

Deriving Real Dollar Value(s)
Once you apply real dollar values to these goals
you should have an rough estimate of
Investment Return (IR).
36

37
("IR" - E)/E.
After calculating your Social media expenditure(E)
Setting your Social media goals
Estimating your return and your investment(IR),
Use the ROI formula to
calculate your social media ROI
("IR" - E)/E.
Assessing your Analytics

("IR" - E)/E.
ROI is a measurement of efficiency, so use the
ROI number to compare to other social media
campaigns as well as your TV, print ,radio and
other Marketing campaigns.
Facebook
ROI
Instagram
ROI
TV
ROIVS VS
38

ROI is a measurement of efficiency, so use the
ROI number to compare to other social media
campaigns as well as your TV, print ,radio and
other Marketing campaigns.
39
T H A N K Y O U

How to Measure ROI in Social Media

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