61% of social media marketers say measuring ROI is the hardest challenge facing them making it the number one complaint about social media marketing. What makes measuring ROI so difficult for social media is that there isn’t always a correlation between the metrics most people pay attention to and actual sales. Social media has forced marketers to begin embracing new metrics but most are still having trouble correlating those new metrics with sales.
What is social media marketing success?
To understand the problem a little better, here is an example. Say that social media marketing success is determined by content engagement (56% of marketers in the survey mentioned above reported engagement as their most important metric). Engagement is simply the number of “likes,” shares, and comments on a given post. For most marketers, high engagement rates is a sign that the content is good and their community of followers is active. But it might be a lie.
A video uploaded to Facebook might have a 30% engagement ratio which is quite high, but only return about $1 for every marketing dollar spent to produce and promote the video on Facebook. Another video, or meme, or text-only post might have an engagement ratio of only 1 or 2% but an ROI of $4 for every marketing dollar spent. In short, engagement doesn’t necessarily correlate with ROI, and marketers are often stuck pursuing a metric that doesn’t matter in the long run.
Click rates vs. online behavior
Another metric that marketers often pay too much attention to is click rates. The thinking is that the more people that click on a link, the more people will buy the product of sign up for the service on the landing page. On the surface it sounds logical, but like engagement rates, click rates can be deceiving. Time and time again we see that click rates and ROI have virtually no correlation. Ultimately it doesn’t matter how many people click on the link, it matters what they do once they get to the landing page. A better metric for correlation with ROI is the bounce rate (a higher bounce rate negatively correlates with ROI) and the average time on page (a longer average time on page positively correlates with ROI).
There is no single metric that will adequately predict the ROI for a given post. Instead, marketers need to invest in tools that allow them to look at several different metrics regarding the delivery of the content, the behavior of the consumer, and the attitude of the target audience.
- Delivery. In marketing lingo, an impression is the total number of times an ad is fetched from its source and is a way to count the total number of times your social media ad was displayed on a person’s screen. It’s a good indicator for the reach of any given post.
- Action. Engagement ratio can be a useful metric but only when paired with metrics like average time on page.
- Attitudes. Net Promoter Scores (NPS) will tell you the likelihood that a person would recommend your brand to their friends or family and Brand Lift polling will give you an idea about how well people remember ads you’ve promoted and their general attitude towards your brand.
Taken all together, you’ll have a better idea of whether your social media marketing efforts are leading to a higher ROI.
Chatbots and ROI
A big trend in social media marketing currently is chatbots. Chatbots can improve your social media ROI in a couple of important ways. First, it can increase ROI by decreasing labor costs by automating much of your customer service interactions in social media chat platforms. Second, it can increase ROI by helping consumers navigate your online store and complete purchases right from the social media chat platform helping turn social media followers into actual customers.