Home > social-media, Strategy > Social Media ROI

Social Media ROI

September 15th, 2009

measure-300x225“How do we measure our Return on Investment from our Social Media efforts?”

That question will eventually be asked by Senior Management. Unfortunately, that question is usually asked after the strategy has been planned, executed and in the wild for some time. At that point, the teams usually scramble to find any stats and data that show an up or down trend in… something before and something after the launch of the strategy. But how should you measure the ROI?

Good question.

The Problem:
The tough part is figuring out what you’re going to measure. First, to get the obvious out of the way, if you have an eCommerce site, and you have a campaign that has specific targeted links to your shopping site, you can easily measure your ROI from increased sales through those links. We’ll leave that out of the discussion for this post.

In a social media strategy, your execution could potentially be free (not counting soft or brown dollars). If your campaign relies on internal Subject Matter Experts (SMEs) communicating and engaging with your audience using free channels such as Facebook, Twitter and blogs, your incremental cost of the strategy can be close to $0.

On the flip side, you may have invested considerably into your strategy. What do you measure to see if you’re reaching your objectives? The answer ties back to your Digital Strategy. When you discovered your objectives in your Digital Strategy, you decided what you were going to measure, right? If only life was so easy.

Qualitative vs. Quantitative:
The problem usually comes down to the old “Qualitative vs. Quantitative” issue. You want to achieve qualitative results, but measure them in a quantitative, unambiguous way. Typical objectives of a Social Media campaign may include:

  • Increase customer loyalty
  • Provide better customer support online
  • Encourage brand evangelism
  • Increase trust in our company
  • Increase brand awareness
  • Increase the influence of our brand

All reasonably valid. The tough part is finding the right Key Performance Indicators (KPIs) to measure them. A common suggestion is, ‘Double (or Triple) the number of followers we have on Twitter.’ Achieving that is not too difficult if your execution team is actively engaging people on the right platforms. But the question is, ‘what does that achieve’? Is it better to get 1,000 random new followers on Twitter, or 100 targeted new followers that are qualified leads, in the right places, that will lead to one of your qualitative objectives? The goal here is to lay out your qualitative measures and make them quantifiable. They need to be defined at the outset, to avoid the tendency to measure any statistic that is going up as a sign of success!

What to measure?
Examples of KPIs from qualitative success criteria include:

  • Reduction in support calls and emails from baseline
  • Number of blogs relevant to our industry that posted something about our brand (good or bad)
  • Number of influential Twitterers that tweeted something about us
    • those influential blogs and Twitterers have to be identified in your Strategy before you execute the campaign
  • Number of repeat visits to our main site or micro-site
  • Increase in average session length or page views
  • Number of new comments on our blogs / posts / support forums
  • Number of comments on other blogs / posts / forums made by our team that elicited a positive response from others
  • Increase in Google PageRank against baseline

Of course, there are many more things you can attempt to measure to see if your qualitative objectives are quantitatively achieved. These measures also give you something to hang your hat on as you continue to refine your tactics to achieve those goals.

Good Luck!

Categories: social-media, Strategy
  1. September 21st, 2009 at 13:46 | #1


    I like your section “What to measure” since you address the operating metrics or the drivers that affect the outcome – ROI. But as such your title might be slightly misleading since you do not focus on ROI – great – but on operating metrics instead.

    I have tried to address this issue as it pertains to social media as well here:


    Thanks again for this nice posts


  2. James Hal
    October 16th, 2009 at 13:27 | #2

    I was struck by the thought that ROI is a dangerous concept. Mass media rarely has real ROI attached to it. It is usually surveyed information that has a lot of subjectivity in it
    Social Media, much like Mass broadcast marketing, does not always fit into a clean ROI bucket. The reason I bring this up is because it changes the conversation with the executives.

    Social Media ROI should be couched with we will aim to see if this happens… and stay away from we will achieve this increase in this metric.
    Pilot and test is the order of the day because Social Media is “more like the Weather than it is gravity” [clay shirky]. We know the variable but predicting the outcome is a bit of a crystal ball gazing exercise.

    To me the ROI buckets typically fall into: Building a sustainable community [metric is traffic and engagement based], Product Research [metric is number of posts that aid in the conceptual solution of a product], Customer Service [you covered this with reduction in calls to contact centre], Marketing and Promotion[Number of direct response forms filled out], and Transparency[# of retweets and posted comments, this one is more about depth then Community initially is]

    Each one of these can have impacts to a P/L
    Community, see Nissan’s the Cube
    Product Research: Bank of America designed a credit card around crowd sourcing
    Customer Service: Wells Fargo, Bank of America, and especially Comcast experience productivity savings and have reduce contact centre staffing
    Marketing and Promotion: Will it Blend is always a favourite, This program has apparently led to an increase in sales of 500%
    Transparency: This is a little less obvious but it early studies from Dell a couple months ago said that their conversion rates we much higher on their direct market initiatives to their audience that were sharing in non-product related conversations online.

Comments are closed.