HOW TO Measure Return on Social Media Marketing

8 Ways Social Media Marketing Yields ROI

Roughly half of all marketers can’t tell you the return on their social media marketing efforts according to e-Consultancy.  Sounds like a cop-out to me.  From my perspective, the benefits of social media marketing are neither harder nor easier to measure than many other forms of non-direct marketing.

Social media marketing has an impact both early and late in the purchase process compared to other forms of marketing. To quantify your social media marketing results, here are eight ways marketers use social media and suggestions to help assess their impact on your company.

  1. Extends message reach. Often referred to as earned media, social media enables marketers to contact a broader audience through the word of mouth from referrals in the form of tweets and social sharing across a variety of different sites. For each referral, multiple people are potentially exposed to your message. And these people may even give your message additional credibility due to the source of the share. You can count these impressions and assign a cost that represents your “paid media” savings.
  2. Provides another message distribution channel. While social media shouldn’t be used as a broadcast channel to blast unwanted messages, it provides another channel to communicating with interested prospects and customers. This can take the form of a blog, videos, Facebook fan pages, Twitter, and LinkedIn groups. The benefit is that prospects often must hear a message multiple times before they act. Having your message on different medium can help reinforce your communication. As an owned media format, its cost is lower than third party paid media sites.
  3. Improves search engine optimization. By incorporating your company’s keyword strategy into your social media content, you’re cost-effectively supporting your search engine optimization efforts. This is particularly true when you integrate a blog into your website and post relevant video. Some SEO professionals refer to this as Social Media Optimization.
  4. Provides product ratings. By allowing customers to rate and evaluate your product, customers get feedback from their peers regarding your offering. While many companies are nervous about using ratings and reviews since they can highlight potential product issues, more often this targeted form of social media, qualifies and helps close sales by building customer confidence.
  5. Reduces sales costs. Supporting customer forums where customers can get answers to their product-related questions, lowers the barriers to purchase. Use of various social media platforms such as Facebook groups and LinkedIn Q&A allows other customers, who understand their peers’ questions, to provide timely responses.
  6. Expands customer service options. Expanded corporate presence on a variety of social media platforms enhances your customer service function by allowing your staff to respond to prospects and customers when and where they’re thinking about buying your products. Beware, this benefit can have a downside, since customers’ social media platform response expectations differ based on channel. On social media networks, they expect faster, better service. Further, aggravated customers can verbalize and amplify their dissatisfaction to others. Many companies find this use of social media causes more of a reallocation of resources than a savings. (Here’s more information about social media and customer service.)
  7. Enhances HR options. Using social media networks helps human resources organizations staff positions more quickly and cost effectively while enabling them to do more detailed pre-screening and reference checking. While LinkedIn is the go-to resource for hiring, recently, Deep Focus used Facebook to attract 100 prospects for an open house focused on hiring creative staff. Depending on your organizations reach and creativity, you can also use other social media formats like your blog or Twitter to broadcast notice of your job openings without paying fees.
  8. Supports PR goals. Through the use of social media, PR professionals can disseminate their communications message using alternative channels. Among the tasks this can work for are senior management positioning, blogger outreach and use of social media press releases. This allows marketers to use multiple channels.

If you’re using social media for any of these eight major uses, you’ll want to track directly related interactions. Once you can do this, it is pretty easy to assign a value to each interaction and calculate the break even point (i.e.- money out equals money in) and profitability. You will know much have you made from your investment in social media initiatives relative to alternative channels.

If you have any suggestions, please add them to the comment section below.

Happy marketing,
Heidi Cohen


For more information on social media marketing metrics, here are seven factors to measure.

Photo credit: Gregg O’Connell via Flickr

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One Response to HOW TO Measure Return on Social Media Marketing

  1. Taariq Lewis says:

    Hi Heidi:

    This is a great post that came across my Twitter stream. Thank you very much for this effort. You shared excellent points and very clear as to the maximum impact that Social Media can deliver to the upper-part of the funnel. I would also share that Social Media delivers further ROI in the middle and lower sales funnel by increasing conversion opportunities or sales with scalable, interactive engagement, not previously possible. If Social Media Strategists were able to measure their inbound impact relative to their outbound costs, they could see both cost savings and revenue generation opportunities.

    At Terametric , We’re trying to help marketers think through exactly which inbound metrics they will need to measure to bravely map outcomes to revenue or cost-saving opportunities. We discuss some of these ideas on our blog.

    What do you think? Are inbound metrics a constructive way to map Social Media ROI to financial returns?

    Taariq Lewis
    Terametric