Social media return on investment is a contentious, confusing subject for many people. But I’m going to answer all of your deeply held, esoteric social media ROI questions. I will share a scalable system for computing results you want from money you’re putting into your social media campaign, starting in the next paragraph. What? You don’t believe me? Good! You should be skeptical!

At a South by Southwest Interactive Festival session, Liz Strauss, Eric Swayne, Petri Darby, Matt Ridings and Ford Motor’s Craig Daitch pledged to lay bare this difficult topic. While I would have loved to get some hands-on examples of how to work with this often-dodged topic, I got no such answers. The name of the panel, “What’s So [Bleeping] Hard About Social ROI?,” was a little misleading — yet there was a ring of truth to it — because the session seemed to be a roundup of all of the reasons its so “bleeping” hard to find ROI and not a substantive session on how to actually grapple with this thorny issue. Lots of comments on Twitter agreed.

Some terrific points were made — I will most certainly share — but more questions were asked than answers given. This left me a little disturbed, given how much preparation some of the presenters had. I think it could have been more hands-on with slides showing concrete examples. I wanted to get my proverbial hands dirty with a few calculations.

Here are the 10 best take-aways from this social media ROI session.

  1. When social media is done well, it builds trust, which can be measured by the speed and reach of a campaign.
  2. When in doubt, ask yourself, “What is the ROI on NOT engaging in social media?”
  3. There isn’t one fancy social media measurement tool that delivers on everything.
  4. Set clear goals for how you’ll track engagement.
  5. Consider the time intervals you want to measure. For example, the Make-A-Wish Foundation looks at its social ROI on an annualized basis because its presence builds all year and then culminates in many year-end donations.
  6. Be wary of oversimplifying by drawing a direct correlation from multifaceted information.
  7. Create your own metrics, such as tonality, velocity and influence.
  8. More than two-thirds of technology being implemented fails because “all those silos make the information useless.”
  9. The big-picture strategy has got to filter down the ranks. (And I would add that measurable info also has to cycle back up to the big-picture people.)
  10. All of your organization’s social media efforts should work in harmony. Human resources, recruiting, marketing, communications and sales should work together on an integrated strategy.

What do you think this panel missed in terms of social media ROI? Share your clear comments on this murky subject.

This post is by Lori Randall Stradtman, who designs WordPress websites and blogs about social media trends at Social Media Design and Social Media Examiner.

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9 Responses to “From #SXSW: Do you still struggle with social media ROI?”

  1. Aaron says:

    Declare what it is you are measuring and who owns the measurement. Then investigate and optimize after 90 days.

  2. Rebecca says:

    There are some great points here. But I was nevertheless slightly disappointed – you complained in the beginning that there were more questions than answers during / after the original SXSW session and I was hence expecting your insights, rather than the takeaways from the session. And then you aske your readers for their answers?

    Regardless, thanks for the article – it does give food for thought.

    • LoriRandallS says:

      I appreciate your candor, Rebecca! I would have loved to emerge from that session with a repeatable process that I could share or at least some concrete steps for measuring some aspect of ROI.

      I attended as more of a reporter than an expert, though I've been studying this area pretty aggressively lately. My friend Marshall Sponder wrote an outstanding book on the topic (Social Media Analytics) and gives away a chapter in his book in exchange for a tweet. It's hefty stuff, but if you're serious about getting quality measurements he's a terrific resource.

      I hope this helps! And thanks again for commenting.

  3. Daniel Fell says:

    One of the big problems with any marketing measurement today is the misuse of terms. When we use ROI in the boardroom it has a very specific meaning to CFO's and CEO's. They are looking for financial calculations and social media measurement is really struggling with that goal right now. Marketers would greatly help their efforts toward trust, accountability and senior management support if they'd develop a common set of definitions and use them more consistently.

    • LoriRandallS says:

      I agree! After listening to the discussion and trying to piece together consensus where it existed, it became clear that setting clear terms is critical. Social media engagement can serve so many purposes at once that measuring it can feel like cat herding, but ROI can be addressed.

      As one who wrote as an educated reporter, rather than a Social Media Analytics expert, I will defer to my buddy Marshall Sponder, who wrote Social Media Analytics.

      Thanks for sharing your perspective Daniel!

  4. Tracking social media ROI is part of what I do on a daily basis. I have to admit, there are elements that are "difficult" to track, and then there are elements you can definitely track.

    Start with Google Analytics and an effective business website funnel. If you sell products you can easily set up goals to track the funnel from the link that brought the customer to the website, right through to the "thank you for your payment" page. If you're a services business, you can track the enquiry through to the "thank you for contacting us" page.

    Or less reliably you can just ask your new customer where they heard about you – that is always a classic that gives great insight.

    I really love this topic, and marketers should always be asking themselves the ROI of their social media activities on at least a monthly basis.

  5. Peter Mesnik says:

    As a vendor of a social media platform we can talk a lot about the do's and dont's and our individual customer experiences to help determine ROI. However, one common thread we see working across customers is that if you persist in sending high quality social content to your audience you will eventually have something to work with. You do not need too many data points for that part, other than noting what type of content gets the most likes and responses. Then you can add social deals occasionally and if you use the right promotion engine you will learn who your best and most influential advocates are.

    We also find that a lot of customers tend to forget about incorporating their email list into the mix. Most companies have an email list that is much larger than their number of Facebook fans and Twitter followers. So using email to drive social interactions is probably one of the most important parts of any strategy. The email to social conversion rate would be interesting to measure.

    You can click on my link to learn more about what we do in this area.

  6. [...] recently shared with SmartBrief what she feels are the top five [...]

  7. link wheel says:

    Yes we have more over find the customers on the internet now what is to have done with our product

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