3 accurate metrics for ROI on social media campaigns

Businesses are struggling with how to evaluate the effectiveness of their social media campaigns. Currently, most companies are using a variety of metrics to measure diverse campaigns across multiple departments. These metrics fail to provide an overarching picture of which marketing programs are increasing their revenues. There are five metrics that accurately measure success in terms of ROI and revenues from social media for all enterprises, both big and small, B2B and consumer web, and across multiple geographies. The following post provides case studies for three of these five metrics. I will outline the other two metrics in a subsequent post.

1. Social media revenue conversion measures how many people become customers through social media referral channels.

Challenges: Social media is great for creating awareness and engagement, but it is hard to measure how many people convert to customers. Facebook’s last click attribution attempts to measure customer conversions by tracking which Facebook links sent people to other websites. However, this doesn’t work well either because there is a delay in the conversion.

For example, someone might see that a friend has posted a link to a brand’s website on Facebook. However, the brand has no way of tracking who clicked on the link, or finding out the social influence of her friends, or if she ultimately made a purchase. Privacy rules also limit companies’ ability to track the entire social shopping cycle. And unfortunately, Facebook Insights (which provides Facebook page metrics) does not offer any context to help the brand discover what motivated someone to click on a link.

Best practice: As the associate director of social practice at Moxie Interactive, Daniel Cho has tackled the problem of measuring social media conversion. When Moxie was tasked with developing social media programs for Verizon Wireless, Cho says, “We focused on total ROI. We put a social metrics layer on top of web metrics. We measured social media conversation volume, sentiments and engagement, which is the number of comments, links and Facebook shares.”

Cho used Wildfire to build a Facebook tab for a Verizon Wireless sweepstakes promotion. Although he could not measure which channel was a better referral channel, he was able to successfully track the social media conversion rates. To do this, he used the number of sweepstakes entries as his main metric. For the secondary metric, he used Wildfire and Google Analytics to calculate the number of tab visits (equivalent to impressions) and opt-in emails.

2. Facebook engagement measures a brand’s ability to communicate successfully with their customers on the social network.

Challenges: Most global brands have multiple Facebook fan pages. Different products and specific regions have their own pages, which are managed by different groups within the company. Businesses need an integrated view of engagement across all fan pages and Facebook app campaigns, so that they can understand what increases their numbers of fans and how this growth compares with industry standards.

Best practice: Many companies use a hybrid solution to track fan page engagement, such as Mediaplex or Google Analytics tags embedded in their Facebook apps combined with Facebook Insights.

SocialBakers the only provider of social media analytics tools that offers an integrated Facebook leaderboard for all brand pages. Their key engagement metric, called “page score,” consists of a combined index score of Facebook page fan growth, content quality and post quality for each fan page.

Ami M. Blaire, senior vice president of marketing at Social Games International, says, “The engagement ratings, the ability to test against and within a competitive set from SocialBakers as well as the contextual metrics are the most valuable tools. Secondarily, the ability to segment by territory and market is and will continue to play a valuable role as we define the best set of programming and promotions.”

3. Social customer support metrics measure the impact of customer support on brand health and the cost of staffing a social support program.

Challenges: Today, people expect their favorite brands to have customer service representatives available on Twitter and Facebook. Companies are trying to figure out how many staff members they need to devote to social customer support and how to best measure the success of such programs. There are several tools commonly used by companies that measure the ROI by counting the number of users supported via social media, but this does not reflect success at a strategic level.

Best practice: Best Buy provides support via Twitter and measures customers’ feedback on the quality of support through a proprietary survey.

Gina Debogovich, a social media lead at Best Buy, told me about how the business shifted focused from measuring return on invested capital to return on engagement.

In 2009, 3,000 Best Buy employees volunteered to answer customer questions on Twitter (@twelpforce) as part of their daily work responsibilities. Through this program, Best Buy was able to estimate the volume of questions from customers and develop consistent, quality answers from its employees. In three years, 50,000 questions were answered. The concept of using employee engagement as a key metric led to the residual value of highly-engaged employees becoming a great social support staff and customers becoming evangelists for Best Buy.

Sudha Jamthe is a social media strategist at eBay, where she focuses on social commerce and social metrics. She has built social media teams, organizations and partnerships for PayPal, AOL/Bebo, Intuit and Network World. She blogs at coolastory.com and tweets as @sujamthe.

Image courtesy of Flickr user Kevin Steinhardt.