Last week we reported how Senior Marketers did not seem to value conversion rates as a true measure of return on investment (ROI) and that they placed greater importance on “vanity” metrics such as traffic, page views and click through rates.
To confuse the matter further, this article looks at how marketers measure the ROI social media marketing can bring. The confusion arises as the metrics to be used revert back to what I coined “vanity” metrics. Measuring social media marketing, which by its very nature is a much “softer softer” approach does need to revert back, albeit initially, to these metrics. The “ultimate” metric however must be the conversion all online marketing brings.
eMarketer published the pictograms below that shockingly indicate that very few marketers measure social media marketing ROI. 84% of respondents failed to measure ROI in anyway.
Of the 16% that did measure ROI all (at least initially) rightly used the correct metrics to measure social media marketing success. Increased site traffic, direct traffic sources to a website and the click through rate to the website are key metrics as social media marketing tends to less hard sell than traditional marketing.
Where the process will fail, where the ultimate metric will not be measured will be if marketers fail to capitalise on the value of website analytics.
Summarising the process thus far. Social media augments traffic to a website by x%. That in itself is good metric but lacks hard monetary insight.
If you now bolt on strong understanding of website analytics and excellent behavioural analysis such as
multivariate analysis you can track the ROI the increased traffic brings. By assigning a monetary value to the ROI through the increased conversions or the number of leads the process of measuring ROI is complete and as a marketer you have hard empirical and monetary insight to deliver within the company.
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