Comprehensive Guide to Measuring the ROI of Social Media Marketing

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Comprehensive Guide to Measuring the ROI of Social Media Marketing

With all the good press it’s been getting lately, you’d think that social media was a gift from the internet marketing gods. Want to expand your brand’s reach online? Social media’s got you covered. Want to connect with thousands of potential customers for free? Social media, for the win!

But while social media marketing has its place, it’s not something that you should go all-in on without having a definite system in place for measuring its return on investment (ROI). Even though sites like Facebook and Twitter are free to join, you’re still investing your time in maintaining your presence on these sites, and it’s important to be sure you’re exchanging your time for some sort of value.

So, as you might expect, the first step in measuring the ROI of your social media campaigns is to determine what you want to get out of these sites. Are you investing time in social networking simply to increase brand awareness? That’s fine, but you need to have some measure in place to determine whether or not your efforts are succeeding. Similarly, if you’re actively engaging in social media to drive traffic to your site, you’ll want to ensure you have a way to track whether or not your investment is resulting in sales.

If you’re only engaging in social media marketing because some “guru” blog tells you that you should, it’s time to take a step back and figure out what it is you’re hoping to achieve on these sites.

Let’s say your only goal with social media marketing is to build awareness for your brand online. That’s a very valid goal, especially if you’ve recently started a new company or website and are trying to gain traction in your marketplace. However, it’s important to realize that although the term “brand awareness” can be somewhat nebulous, there are ways to measure your expanding influence that you should integrate into your business model.

For starters, here’s what you shouldn’t measure – the number of “friends” you have on any given social networking site (unless you’ve conclusively proven that an increase in social media contacts correlates to an increase in sales, which we’ll get into later in this article).

While having a large number of friends on Facebook or Twitter can be a good sign, the number alone doesn’t tell us anything about the people who are following you. Are they fans who actively engage with the content you produce, or are they simply people who added you as an afterthought and have no intention of following through on any of your calls to action? Unfortunately, it’s impossible to measure the caliber of these connections by numbers alone.

Instead, what we need is a way to determine how many people we’re reaching with our campaigns. Consider the following two metrics to track whether or not your brand’s influence is growing online as a result of your social media involvement:

Klout Score – Your Klout score is a metric that measures how “influential” you are online according to your social media presence. It’s calculated based on the number of contacts you have on various social networking sites (including Facebook, Twitter and others), as well as how influential these contacts are in their own right.

Now, the Klout score as a metric has been taking a lot of heat lately from critics who argue that it’s too easy to game and doesn’t provide any worthwhile, actionable information to business owners. And there’s definitely some truth to these statements, considering how easy it is to buy hundreds of Twitter followers or the fact that your Klout score, on its own, won’t grow your business any faster.

Consider the following quote from Niall Harbison, writing for Business Insider:

“How do we know people are influential in the real world? We paint a picture over time and look for signals that as humans we all know and understand and the online world is no different. People don’t walk around in the real world with numbers above their heads telling you how important they are. At the end of the day Klout is just another number and people always try and game numbers.”

However, it’s also worth considering that measuring influence and branding online is incredibly difficult to do and for this reason, it’s admirable that the Klout score is even attempting to measure something so elusive and hard to capture. The key to using this metric effectively isn’t to compare your scores to other business owners, but to see if your own score increases over time as a result of your social media efforts.

Basically, if you’re investing time and effort into social media sites, you should see your scores increase over time. If you aren’t seeing any movement in your Klout numbers, you’ll want either try different social media marketing tactics or get out entirely (as it could be that your target audience members aren’t that involved with social networking sites).

Google Alerts – Another good way to measure your brand’s influence online is with Google Alerts set to notify you every time your company name or other target keywords are mentioned.

To set up a Google Alert, navigate to There, you’ll be able to specify the terms you’d like to be notified about, as well as the frequency of alert messages you’d like to receive and the types of content you’d like analyzed. Ideally, you’ll be able to track whether your social media campaigns are effective or not by an increase in the number of Google Alerts you receive for your chosen keywords.

Using these two metrics together should give you an idea of how your brand is growing online, but what if you want to track something more measurable? Say you want to determine whether or not the visitors you receive from these social networking sites are actually turning into sales or not.

Up until recently, tracking social media conversion rates was pretty tricky, but with the launch of Google’s new version of their Analytics program, this data is much easier to come by. It’s now possible to tie specific traffic channels to Google Analytics Goals to determine if these sources are resulting in sales, but there are a few things you’ll need to set up before you begin tracking this data.

First, you’ll need to determine what it is on your website that determines a sale or a goal conversion, as Analytics will need this information to determine when a qualifying event has occurred.

For example, if you plan to use this system to track sales of your own products, the event that signifies a conversion is the buyer landing on your “Thank You” page. Or, if you want to track whether or not your social media visitors are opting in to your email list, your end goal might be having them land on a customized subscriber page.

Alternatively, it is possible to use the new Google Analytics to track things like downloading a free report on your site, watching a video for a certain length of time or even heading to another site to purchase something (which is ideal for affiliate marketers). However, for the purposes of this article, we’ll focus on conversions based on reaching specific URLs, as these are the most common conversion types and the easiest to track in Google Analytics.

You’ll also need to have the new Google Analytics program activated before you’re able to begin tracking your social media conversions. To do this, simply log in to your existing Google Analytics dashboard and click on “New Version” in the top right-hand corner (if you haven’t already).

Once these two steps are complete, you’re ready to set up your conversion goals. Here’s how to structure your tracking system to ensure your social media investment is putting more money in your pocket:

Step 1 – Set up a Google Analytics Goal

To create a new goal, click on the gear icon on the far right-hand side of your Google Analytics dashboard, which will bring up the Advanced Options screen. From the menu that appears, select the “Goals” tab:

Then, click on “+ Goal” under an open Goal set in order to set up the first piece of your social media ROI tracking system:

In the screen that appears, you’ll be able to give your goal a name and select the type of goal you plan to track. From our previous discussion, you should already know what specific user action will trigger a goal conversion, so select the Goal Type that best corresponds with your desired outcome. In this article, we’ll be looking at goals achieved by “URL Destination.”

After you select the “URL Destination” radio button, the following options will appear:

Fill out this screen with your target URL and the value of a visitor reaching this page. For example, if you sell a product for $27, the value of each goal conversion will be $27. Skip the “Goal Funnel” section for now (this is one of many advanced analytics options the new Google Analytics offers that can be added in as you become more sophisticated with these tools), and click “Save”.

Step 2 – Set up Advanced Traffic Segments

Now that we’ve defined the type of goals we want Google Analytics to track, we need to add a method for the program to track which visitors have arrived from different social media sites.

To do this, we need to set up custom segments. In your site’s Google Analytics dashboard, click on “Advanced Segments” and then on “+ New Custom Segment” in the bottom right hand corner of the screen that appears:

In the next screen, select “Source” from the list of traffic criteria and then enter the name of any given social media site you want to track. Use the “And/Or” feature to add multiple social networking sites to a given segment, or create different custom segments for each social media site if you want to compare the traffic quality of one site to another:

Keep in mind that although Facebook and Twitter are the most popular social media sites right now, your site might also receive traffic from Digg, StumbleUpon, Youtube, Google+ or a number of other social networking sites. Check your “Referring Sources” traffic stats to see which sites send the most traffic your way and create your custom segments around these referrers.

Step 3 – Analyze Your Goal Conversions

Now that we’ve got our goals defined and our custom traffic segments set up, we need a way to visualize exactly which conversions resulted from social media traffic.

To do this, click on “My Conversions” from the top navigation bar, then select “Goals”. This will take you to the Goals Overview screen, where you’ll be able to see graphs representing the number of conversions that resulted from your social networking traffic:

Image: Unbounce

Within this screen, you’ll be able to see the percentage of your total goal completions that resulted from social media traffic, as well as which specific URLs led to your sales.

So, what do you do with this data? First of all, check the percentage of your goal completions that resulted from social media. If this number is small, you either need to rethink the way you’re approaching your social media marketing campaigns or get out of it altogether. Not every site is a good fit for social media, so if you’re investing time in this area but not seeing results, it’s worth rethinking the amount of time you commit to social networking sites.

On the other hand, if you see an acceptable number of conversions to justify your investment, the next step is to determine which social networking site is responsible for the most sales. You can do this by setting up separate custom segments for the social networking sites that send you the most traffic and comparing them against each other. If you notice a significantly higher number of conversions from one traffic source, adjust your campaigns so that most of your time is spent on that site.

Setting up tracking systems to measure the true ROI of your social media marketing campaigns might sound complicated, but it’s a vital part of determining whether you’re investing your efforts in ways that actually help your business to grow. By following the steps described above, you’ll be able to make informed decisions based on actual data that show whether or not your business is growing as a result of your social networking involvement.

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AJ is the co-founder of Single Grain, an SEO Agency based in San Francisco, CA. Single Grain specializes in helping ... [Read full bio]