I’ve been trying to prove social media ROI all wrong, but not until Kalamazoo Social Media Week 2016 did I find a framework for understanding how to wrap my head around it. Basically, we need to stop trying to justify a single platform to leadership. Instead its best to present value as a holistic metric. Don’t get sucked into the black hole that is digital analytics.
Digital analytics broke social media ROI
Digital analytics are the best thing since sliced bread, but it turns out, that it’s also the downfall of too many marketing strategies. We’ve become spoiled with the ability to track every click and lead source, and I’ve definitely done this, that as marketers we have forgotten the big picture. We’re too concerned with ‘likes’ and ‘shares’ and the impact on new dollars. Instead think of all your status updates, engagement, and ad spend as a part of campaigns. What do I mean by that?
Know your metrics
Before the internet (yes, I’m going there), we had print, TV, radio, and billboards. We could track specific people or even our niches effectively, but we could track spending and outcomes. We knew that if we were running commercials on TV and radio for the last month that any increase in sales, above a traditional average, was most likely due to that ad spend. And if we wanted to know which, TV or Radio, had a greater effect we would run only one at a time.
Using the lifetime (or yearly) value of a customer and the cost of the ad spend, we can calculate the overall effectiveness of a campaign.
Can’t we do the same with social?
Thinking holistically about social media ROI
Let’s put it all together to think holistically about social media roi. My year is filled with pre-determined campaigns. I know that every year I have to organize Build IT Together twice a year. For that I use social media, content, traditional media, and more. All of that has a cost. I also know that each new lead and customer from that event has a value. So, when leadership asks me, “Should we be spending on advertising on Facebook for Build IT Together?” I know it’s the wrong question.
The right question? “Is our investment in Build IT Together providing the results we want?”
A little re-framing makes all the difference. Yes, I can measure whether or not Facebook brings in registrations for my event, and whether those individuals become customers, but that’s too narrow a focus. With everything so connected I know that my Facebook ads might not have solely brought in a customer, but maybe Facebook did influence and prime someone to register once they receive my email. Each channel works in concert to help reach my goal.
Show social as just another spend as part of a larger picture. Fill in the blanks:
We earned ____ new customers each with a lifetime value of ______ through our marketing efforts in which we spent $_______. This equates to an acquisition cost of $________.
tldr: In instead of worrying about individual platform and their efficacy, get to know an initiative’s (read: campaign’s) overall effect and cost.