Companies Don’t Know How to Measure Social Media ROI

Most companies these days are in social media. A survey  conducted by KingFish media, shows nearly 72% of marketers say they use it. Yet, while social media is rapidly coming of age, measurement remains problematic. According to   of ClickZ there are two main reasons for this:

  • Off-site social activity presents marketers less robust data than they have on their own website.
  • Brands frequently lack clear objectives/conversion goals for social media.

Of the two, not having clear goals before engaging in social media or an accurate way to measure it is probably one of the main reasons for companies to abandon social media when they find “it’s not working”!

KingFish media interviewed “457 respondents  in corporate management and marketing/sales management. They found that nearly half of them (43% of marketers – see the graph below) haven’t measured ROI.

4 Ways to Improve Your Social Media ROI Measures

Here is a review of some modern web analytics tools recommended by ClickZ that can better help you determine what’s working with your online marketing.

1. Use More Robust Attribution Models

Last-click attribution is the most common measurement model used by marketers. In Google Analytics, it shows which medium the conversion can be attributed to, giving full credit to the conversion based on what was last clicked. Credit is often attributed to search, and channels such as display and social media are marginalized. But consumers are exposed to various digital messages prior to conversion, and it doesn’t make sense to give last-click all the credit. Then why is last-click attribution still

When the visitor comes in through a combination of mediums (for example, assuming three visits and a conversion on the third, Google Analytics can show the entire journey a customer takes before they convert. For instance, Click Z finds that on average customers interact with a brand 4.3 times over a two-day period before they finally make a purchase. Social may account for an earlier interaction as it is often an upper-funnel player in the buyer journey. What this means is social may not receive the full credit it deserves for those only looking at last-click attribution.

According to Impact Radius, display ads may see a 30-80% decrease in attributable cost per action when attributed by channel. Yetfew companies (only 24%) adopt robust attribution reporting. However, there is a host of attribution methods to select from, ranging from first-click, multi-touch, algorithmic, to fixed attribution. There are some key issues that prevent companies from using these models:

  • Switching from a last-click attribution model to an alternate model requires a complete restructuring of the reporting and compensation structure for marketers.
  • Companies that experience positive Return On Ad Spend from their digital marketing campaigns are hesitant to tweak parts of the formula if it’s already doing well.
  • It takes a commitment in time and resources to implement an effective attribution program.

These issues may make transition more difficult for your company in the short term, but the long term returns in more accurate measurement, allowing you to better hone your marketing approach, will be worth it.

To understand the plethora of options available for digital attribution, research industry publications such as eConsultancy’s May 2011 report: Marketing Attribution Management Buyer’s Guide for an overview of vendors.

2. Make Your Own Site your Social Hub

To measure social media effectiveness, you can’t rely on platform metrics alone for two reasons:

  • They aren’t yet optimized for purchases and conversions, but for engagement and conversations.
  • Platforms lack the ability to conduct experiments and tests on layout in a way that’s totally customized.

If you desire accurate, robust measurement to drive results in a high-conversion environment, your own site is the place to form a strategy around because it provides the most robust measurement.

3. Develop More Granular Conversion Goals 

Typical conversion goals include key performance indicators (KPIs) like followers and visitors, and macro conversions such as revenue and leads generated. However, honing your conversion goals by assigning a mix of both macro and micro conversions aligned with favorable outcomes could help you make better decisions on where to focus your marketing.

For instance, if you measure leads generated by a newsletter and find that it is a high-conversion tool, you can hone this further through a micro conversion measurement such as new sign-ups to the newsletter. If you discover that social media provides a higher conversion outcome than than revenue investment, you could then refocus some of your effort from direct purchases, which might not work as well in social media, to on achieving new sign-ups to the newsletter.

4. Measure social interaction on your site

Monitoring social engagement on your own site lets you combine web and social metrics and create useful segments to understand specific visitors and channels better. Additionally, measures of the social actions users take on your own site can be a strong indicator of the shareability of your content in social channels. You could set up analytics for every social interaction on your site from gaining new Twitter followers to new +1 of your Google+ content.

Case Study 1: The ROI of Social Sharing vs. Email

A recent blog post by Tamara of Eventbrite on All Things Digital compares the ROI on social sharing for their company. With the growth of social commerce (like Groupon), there are measures that help marketers understand the true value of incorporating the social media.

Eventbrite measures results on their own site.

Background: The growing increase in the effectiveness of sharing on social networking sites – Facebook, LinkedIn and Twitter

When someone shares an event with their friends through social media, this action results in real dollars. Eventbrite’s most data shows that over the past 12 weeks, one share on Facebook equals $2.52, a share on Twitter equals $0.43, a share on LinkedIn equals $0.90. A share through their ”email friends” application equals $2.34. In terms of effectiveness, they’re ranked – Facebook, email, LinkedIn and Twitter.


Eventbrite employes a custom suite in-house developed social analytics tools that lets them track and analyze:

  • Which sharing options their users employ
  • Where on the site each share action takes place.

The tools tie back into their conversion funnels, which enables them to attribute ticket purchases to the specific social distribution channel that drove them. For example, they can compare things such as:

  • The value created by a Facebook “Like” vs. a Twitter tweet.
  • The performance of user shares initiated before or after a purchase.

Results Measured:

Eventbrite’s data showed that over the past 12 weeks of the period studied:

  • One share on Facebook equals $2.52.
  • A share on Twitter equals $0.43.
  • A share on LinkedIn equals $0.90.
  • A share through the ”email friends” application equals $2.34.

In terms of effectiveness, they’re ranked as follows: Facebook, email, LinkedIn and Twitter.

Case Study 2: Effectiveness of Groupon

Wherever possible, the simplest and most direct measures of ROI can be used to show the bottom line results of a campaign. A post by Dan Yoo on the LinkedIn blog, measures the results in weekly sales of distributing a coupon.

“You can see the initial spike in revenue in the graph below. That’s to be expected after distributing a coupon. What we found even more interesting was the “new normal” that resulted. Even after the bump from Groupon, our revenue has leveled off to almost 50% higher than before.”


Snap! principle of measuring social:

It will provide insight into your results and help you make data-driven decisions.