How to Measure Social Media ROI
Social media marketing is a great tool that helps businesses of all sizes promote their brand and engage directly with customers and fans. Over the years, many businesses have definitely recognized the need to remain socially engaged but many of them do not know how to measure social media ROI (return on investment) for their marketing campaigns using the e-commerce/goals functionality of Google Analytics. Google Analytics is necessity for anyone who wants their marketing efforts on social media platforms to translate into improved sales and profits.
Here is a simple method that you can employ to track your social media results with the help of the free Google Analytics program:
Step #1: Decide the goals of your social media campaign
Identifying the goals you want to track should be your first step towards measuring the ROI from your social media campaigns. For example, one of your goals may be converting 5 percent of all the Internet users visiting your website from the social media platforms into customers. Once you know what you want to measure, such as sales in this example, the next step is to set up goal tracking in Google Analytics.
- Log into your account’s admin area
- Click on profile of site for which you are creating goals
- Select Goals tab
- Click on + Goal link in one of the goal sets to pull up the screen that enables you to choose one of the four goals you want to track using Google Analytics
- If the sales funnel on your website ends up on a predetermined thank you’ page, then choose the goal option ‘URL Destination.’ Also fill out the fields that show up when you choose this option. If you are employing a complicated e-commerce system, then you must choose the goal option ‘Event’ and also follow the instructions on ‘Conversion Overview’ in Google Help in order to properly set up the goals.
Setting up goals can be a bit intimidating, but we are happy to help if you need it. For most work we do at Midas, we insist that Google Analytics is installed and goals are established or else measuring website performance starts to become a guessing game, kind of like if customers turned invisible as soon as they walked in your store. If we run a campaign, we want to be able to measure social media ROI to know what worked and what didn’t.
Step #2: Measure social media traffic conversions
As soon as you set up your goals and activate the system, data (in regards to the number of sales happening on your website) will be generated; however, feeding in your conversion goal alone is not sufficient for obtaining meaningful information about the ROI of your social media campaigns because this feature takes into account sales from all sources. In order to segregate the conversions from social media and those from other sources, you need to create an Advanced Traffic Segment in your Google Analytics account. This can be done as follows:
- Navigate to the screen ‘Traffic Sources Overview’ from your reporting dashboard
- Click on ‘Advanced Segments’ button which you can see immediately under the main header of the page
- Click on the button ‘+ New Custom Segment’ button which shows up on the lower right-hand side corner of the segmentation menu
- On the new screen that pops up, add ‘OR’ statements using the ‘Source’ metric in order to specify the users who come from specific social media sources. A custom segment can be created for each social media platform from which your website receives traffic. Ensure that mobile and desktop domains as well as all URL shortening services (as an example, Twitter’s ‘t.co’) are also used. You should not group all social media domains into a single custom segment ‘Social Media Traffic.’ This diminishes the value of the data you generate.
Step #3: On the basis of data generated, make adjustments to your social media marketing strategy
After creating the custom social segments, you can come back to the reporting dashboard ‘Goals Overview’ in the ‘Conversions’ menu in order to apply the custom filters that you have created using the ‘Advanced Segments’ button. This will help you to clearly know how many of the visitors to your website from the social media platforms have turned into paying customers.
The ROI from your social media marketing campaigns can now be worked out by comparing the number of sales that has been contributed by this source with the time, effort and money involved in running the campaign. It is important to measure the ROI for each social media platform because it is commonly seen that when some platforms provide a positive ROI, other don’t, and calculating this can help you allocate your future marketing dollars accordingly.
Conclusion: How to Measure Social Media ROI
We hear many complaints about the mystery of social media marketing. Truthfully, many people just don’t want to put in the work to deeply analyze everything that’s happening. If you take these steps, measuring your social media ROI is actually easier than offline ROI in many ways. Invest in setting up your systems and you’ll be able to measure social media ROI and build your business with proper clarity and strategy.