In order to measure social media ROI for your company, you have to understand that each campaign and company will be different: Different strategies, different goals, different metrics.
Calculating the ROI of social media is always a challenge for businesses, but in her new report The Social Media ROI Cookbook, Susan Etlinger from Altimeter Group has defined six different ways that companies can measure the success of their social media efforts. I like the way she has categorized the multiple ways people can measure ROI. Susan divided them into two categories: top-down and bottom-up.
This is a topic we have written about a lot here at Spiral16. Of course, the best approach to measuring ROI (a financial metric) from the decidedly non-financial interaction of social media is a mixed approach, one that combines the business context you get from top-down methods and the level of data granularity from bottom-up methods, as she puts it in her report.
The Social Media ROI Cookbook is embedded below, but first here’s the 6 Ways to Measure Social Media ROI:
There’s also an entire section in The Social Media Cookbook about correlation, which is great. Going back to combining the financial and non-financial: Correlating online metrics with traditional business data will create a narrative. Look for the points where data matches up. Add some context to the long-term data movement. A little detective work (after a lot of planning ahead on what to measure before you start) goes a long way.
Proving ROI is not always essential, however. According to The Social Media Cookbook, 84% of survey respondents reported that the primary business impact of social media was not revenue generation, but “insight that helped us meet customer experience goals.”
Jay Baer from Convince and Convert said it even more succinctly: “You can’t absolutely prove impacts using correlation, but you can determine where something appears to have an impact, and sometimes that’s all you really need.”
Here’s The Social Media Cookbook: