Are Businesses Tracking Social Media Marketing ROI Correctly?

Social media measurement is different to traditional media.

With traditional media, tracking ROI has never really been accurately possible.

You usually pitch in X dollars on your TV, radio or print advertising and assume by estimated calculations that you would have received some no. of eyeballs generating Y no. of sales. While we agree there is a method to this madness being adopted since decades, there isn’t really a substantial proof behind the accuracy of these figures.

With social media marketing channels like Facebook & Twitter coming into picture, marketing ROI on these platforms has begun to be questioned. Why? Because these platforms take ROI measurement to a whole new level than that of traditional marketing – they provide you what traditional marketing never really did.

You can now measure each cent of your marketing spend for it’s return on investment. Not only that, you can also measure return on a number of metrics based on identified objectives.

Over the last year, Facebook has has introduced some great tools to enable marketers to dive into greater depths to identify what is working for them versus what isn’t. For example, marketers can use features like custom audiences, lookalike audiences, conversion measurement and Facebook exchange to garner huge increase in revenues over time.

Yet, many marketers claim that their social media efforts have not given them a substantial ROI.

A survey done by Econsultancy stated that 47% of companies have not been able to measure results from their social media activities or identify the value gained from social media investments. As a result, many businesses are questioning the power of social marketing ROI while a lot of others who are spending huge amounts of marketing dollars on social media remain clueless about the pay back it gives them – they are simply following the herd without a clear cut strategy in place.

Why are companies still lacking in social media measurement?

The key reasons for not measuring social media are:

1. Lack of time: Lack of time to invest in social ROI measurement is the most common reason for companies not measuring their success as listed in a white paper by iContact in a survey done among 414 businesses.
2. Afraid to hear the truth: Some companies may not be quite willing to actually hear the truth about their brand and what customers have to say, hence brand custodians naturally tend to avoid measuring their efforts.
3. No clear objectives: Companies cannot decide what to measure, hence fail in using measurement capabilities to the best.
4. Unaware of the right tools: You may be using the wrong tools and collating huge amounts of irrelevant data, hence you’re unable to measure what’s required.
5. Failing to distill data: Often, a lot of data may be gathered but the proficiency or ability to study and refine this data to gather useful information may be lacking in the team.
6. Do not hire intelligent resources: In cost-saving measures and working with limited budgets, companies sometimes feel it is unnecessary to hire a professional agency or tend to hire cheap resources who may not be able to provide intelligent solutions.
7. Do not follow a plan of action: It is important to have a clear plan of action in place. Your plan should address the following questions:

• What are your business & social objectives?
• How will you meet these objectives (what will be your measurement criteria)?
• Which tools will you use?

If you haven’t started tracking your social media efforts, perhaps it’s time you did it now!

See our blog post on how to measure social ROI or get in touch with us and get help to develop a social media strategy that works for your business.