How much is a tweet or a Facebook status update worth to your business? Unlike other forms of marketing, social media can be difficult to measure for Return On Investment (ROI), but some new tools are now making it easier. However, there is still a lot to learn about ways social media contributes to an online business model and how to capitalize on this infant technology.
Qualifying Your ROI
The fact is that different businesses have different bottom lines. Every business may want to make a sale, but non-profits also want to create exposure for causes and fundraise as well. Some forms of ROI are due mostly to social influence alone, and this can be the trickiest part of social networking ROI to calculate. There are applications like Klout, within Facebook, that can give you a number associated with your social influence, but does that number help your business? It may not be a concrete way to measure ROI, but it does help social media managers understand what topics are of interest to their audience and who their most active friends are and their immediate influence, too. This can help business owners to create social media campaigns that are very niched and to roll them out quickly. Certain companies specialize in marketing for your specific niche, and that’s probably one of the most important factors in being able to produce a campaign that can measure ROI. Get partnered up with a company that does marketing for accountants if you’re an accountant for example, it’s all about finding the best people to work on your campaigns.
Dollars and Cents ROI
Businesses want to measure conversions and sales, when they are interested in increased sales. There are tools that can help you do that. In Facebook, Conversion Measurement will tell business owners what behavior a person took when clicking on their Facebook ad. This can help track things like new registrations. Combining this tool with Optimized CPM, which helps businesses target their ads to specific demographics, can yield real dollars and cents ROI.
Traffic is also a good indicator of potential ROI. Administrative panels can usually give you a good idea where your traffic is coming from and which countries are the biggest visitors. It can also clue you in to invalid clicks, if you have a Google PPC campaign that is receiving too many hits from Nigeria, for instance. It can help you fine tune campaigns so that you don’t lose money. If you have a blog that can also show where your traffic came from, you can also determine which of these social networking sites give more value for you.
If you want to be very clear about where your traffic is coming from, create shortened links for specific social networking sites. You can then track them from the shortened link builder site. It will tell you which links were clicked the most. If you know which you used for which sites, it can give you a very accurate picture of the amount of traffic coming from each social network marketing campaign that you engage. Shortened link builders are perfect ways to analyze a variety of data, including times links were clicked. This can provide an excellent way to determine traffic from your social networking profiles. Using that in conjunction with your traffic stats on your main website, you can figure out which sites drive the most traffic to your main website. Combine that with tools and sales data and you can get a very good overall picture of your social networking ROI.