OH the age-old debate … how do we track the ROI of Social Media? I love this debate. Although “age-old” really only encompasses the last 3 years or so, it’s the most frequently debated and discussed topic in marketing today. There are many opposing viewpoints on the answer: some disbelieve the ability entirely, others point to Social Media as the ONLY way to drive results. So what answer can our 3 years of experience with over 20 different brands provide towards a solution to this quandary?
Social Media’s effectiveness is only as track-able as your company’s effectiveness. What I mean is that no company can get the answer to the question if they don’t know the answers to all the other questions that precede it:
— Where does your revenue come from currently?
— What / who is your best lead source?
— Where is your top spending customer?
— How many sales does your online traffic drive?
I’m not dodging the original question, I am qualifying the field that we are analyzing. In fact, knowing a client’s current marketing & sales landscape, I can track the number of sales driven by a blog. I can track how much revenue was generated per impression on Facebook, but only in the one way that I can control: advertising. Recent technology breakthroughs in online data collection gave way to Retargeting Advertising, which is a highly track-able and convertible ad medium. So I can show you how many conversions our content is able to drive in base sales, inbound leads, email signups, white paper and case study downloads, etc.
However, if your company does not know the correlating data between inbound leads and sales conversion, or how effectively you can close through email, I can’t help you learn exactly what Social Media is doing for you. To illustrate my point, here are two scenarios and how they play out through tracking results:
- COMPANY A is a lovable brand with a great product. They sell to both Consumers and Businesses. They know how much they’ve sold in total year after year. They know their expenses. However, even though they have e-commerce on their site, they don’t know their traffic numbers, their total online sales, or how any of those numbers correlate.
- COMPANY B is a B2B brand with a great product. Although they aren’t as lovable as A, they have a solid brand. They track their data effectively. They know the percentage of attendees they will convert to sales through a webinar. They know that if they get a customer to take an online demo, they’ll close them 30% of the time. They know how their traffic numbers, inbound leads, and requests convert to revenue.
With Company A, we can use Social Media and good content to drive a ton of attention, momentum and buzz around the brand. We can use that attention to push it to action (traffic, clicks, email sign ups, etc).
When it comes down to knowing how much Social Media has made in revenue, however, we are handcuffed by the lack of tracking within the company. Their revenue is muddled with all of their other efforts made that year – like events, press, traditional PR and networking. We can look at their yearly sales and hope to guess that our metrics make the case showing that we were integral in that growth, but it’s not very convincing. This isn’t necessarily because the Social Media was ineffective, it’s because Company A is unable to know what is working and what isn’t. And in these cases, Social Media is the newest and easiest methodology to discard (even when it’s the most powerful medium they have working).
With Company B, every metric we gather tells the overall story. If we drive 100,000 impressions through content shared on Facebook, and that content drives 500 clicks, that increases the web traffic by X%, which they know increases Revenue by Y. When we report that we generated 10 webinar attendees with video content posted through an Influencer on Twitter, they know they’ll get on average one new customer worth $5,000.
Your company must take data tracking seriously. Is it tedious? Of course it is, but you can’t honestly discredit Social Media’s effectiveness when you don’t know how effective any form of advertising is for your brand. With that knowledge, think about how much better your budgeting, spending and appropriations could be, imagine how much waste you could cut out of the bottom-line.
Tracking the success of all your lead-generating efforts is simply smart business, and what better time to start than with the beginning of a new year. Take baselines of your active clients now and look at them often while setting your 2014 Goals!
Want to talk more about the numbers?