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Monday, November 7, 2016

Measuring Social Media ROI

It has been 3 long years as I close in on the completion of my Ph.D. in Education Technology at the University of Missouri - St. Louis.  As I finalize my dissertation on the use of social media by universities in communicating with students and alumni there are many interesting questions my committee have been asking.  I will share my answers to some of those with you now specifically on the measurement of marketing ROI for both for-profit and not-for-profit organizations.

How do not-for-profit organizations, such as universities, measure return on investment?

Measuring ROI for traditional nonprofit organizations can be difficult as many of the positive outcomes of spend on research or a marketing campaign or appeal may be intangible with a social (ethical) component.   Quantifying those benefits are difficult to say the least but can be recorded and noted.   However, other outcomes of marketing and research spend can be quantified. 

For example, if a university spends dollars on research for a new drug and takes that drug to market then we can weigh the costs versus the outcomes (sales) against one another.   But even in this case, a clear cut example, we are still missing the value brought to the lives of healthier adults or children due to the use of this new drug.  So in this case we know our hard ROI figures are definitely understated.  By how much, it is hard to tell.  But certainly we could try to apply values to our formula.

Regarding pure “marketing” ROI, nonprofits can measure this in various ways.  The metrics to consider depend on where in the marketing funnel the dollars are being spent.  There are many funnels for nonprofits but in general it comes down to these main four components shown below from top of the funnel to bottom respectively with tactics and metrics also listed:

For universities the above funnel is the same for the alumni association or those in development.  But this funnel does not work for those in charge of student enrollment.  For this function, a more traditional funnel is in play as shown below:


With marketing automation tools like Hubspot, Eloqua, Marketo and Salesforce, most of these various actions can now be tied back to the initial visitor via tags.  The challenge is in determining the correct attribution model to clearly understand the value each part of the marketing strategy brought to the table.  In a panel session I moderated last month on marketing ROI which included digital strategists from Purina, Centene, Linkedin, Adobe and Perficient, we all agreed that measuring ROI is difficult due to the complexities of marketing these days, but as long as you stick with one attribution model you will at least be making apple to apple comparisons for assessment purposes.  No metric will be 100% accurate in the digital marketing world.

A recent article reported that only 15% of organizations (for-profit and not-for-profit) can quantify the impact of social media.  Discuss how organizations should measure the impact of adopting digital media strategies.  

Today many CMO’s are still having major issues quantifying the impact of all of their marketing campaigns.  In a recent article by Adobe, 93% of CMOs say they are under pressure to deliver measurable ROI; only about 20% of marketers are successful at tracking their content marketing programs; and only 8% of companies said they can determine the ROI of their social media spending.

We must keep in mind that the definition of social media ROI really depends on the goals.  Not all goals will be quantifiable and may be non-financial.  And, as I spoke prior, regardless of the efforts we will not be 100% accurate in our figures.  I am a firm believer that you first define your metrics and formulas the best you can and secondly stick with that same measurement strategy throughout for clear apple to apple comparisons.  Doing so, will allow one to compare one campaign versus another with minimal risk of misinterpreting. 

Let’s consider some specific goals:
  • Lead generation – click-throughs can be easily tracked from social media posts to the website for signup forms or downloads.  Future engagement can then be tracked on these visitors on social going forward.
  • Donations – click-throughs can be tracked from social media or emails campaigns and actions noted.  Future engagement and actions of this donor can be tracked elsewhere going forward.  Re-targeting campaigns can be used as well.
  • Site traffic – for publishing sites it is all about visits, page view and their return rate.  Metrics can be set and monitored over time.  Traffic sources will be followed closely and difference in content consumption noted.
  • Revenue – Last but not least, was a sale made?  Where did they come from, what content did they consume along the way, how much nurturing was required?
In general, ROI can be captured with some effort.  But even if we could follow every prospect and customer around digitally, there are many things outside of our control (as marketers) that mess up metrics.  These include individuals that delete their cookies on a regular basis (1/3 of us delete our cookies on a monthly basis); search in stealth mode; use Adblock Plus (a popular browser plug-in which blocks ads); share a computer with their spouse at home; etc.
Another recent article indicated that analytics are only useful if they are considered across the organization.  Comment on this statement.

I could not agree more with this statement.  In order for an organization to fully harness the power of data and technology all within the organization need to be on board.  The organization must create a data-centric culture.  To me this means making data easy to request, capture, access, display and interpret.   

Data can (and today must) be used strategically by every individual in an organization from a copywriter to the HR representative to the web developer in order to stay competitive.  And in today’s faced paced world, companies need to be ready to shift and pivot when the market says.  Companies need the latest and best data to help them answer those important questions.   It is a shift in thinking.  We must now ask at every level and every department, what data do you need to support your business goals?

Today tools including Tableau, SAS, IBM, and others make the date capture, analysis, reporting and visualization very easy for the novice.  Most tools are point and click unlike when I was a young analyst at the Reader’s Digest Association in the late 80’s and early 90’s.  An organization, by the way, that was way ahead of its time in terms of a culture of no silos, all had a place at the table and data was at the heart of every single decision made.

Yet another recent article indicated that non-consumer facing organizations have greater success in using social media.  Comment on this statement.

The use of social media and strategy for B2B is certainly different than B2C.  I am not sure I would agree with the author of the article that B2B has far greater success in the use of social media.  I think it is just different and your success depends on your strategy and deployment and measurements.  

Let’s talk about content, channels and goals for these two business models to understand better.

  • For B2B the strategy is clear.  It is whitepapers, e-books, downloads, forms, case studies and more.  All easy to track and present.  
  • For B2C, caution has to be taken so that it is not perceived as a push.  The content needs to be visually stimulating and entertaining in some cases.  Native ads are also used for this purpose.
  • For B2B it is certainly LinkedIn for the main channel.  Twitter most likely following.  And Facebook last.  But of course there are always exceptions.  You must understand your audience and it’s demographic.
  • For B2C, it is pretty much all social media except LinkedIn.  And, again which is priority depends on your audience and their demographic.
  • For B2B it is a download, form signup, e-book, newsletter.  All easy to track success of campaigns with marketing automation tools in use today.
  • For B2C it is sales for the most part.  And the journey to get to that sale can be complex and fraught with attribution issues as previously spoken about.
This educational journey of mine has been very fulfilling.  I hope you find me sharing answers to questions posed by my Ph.D. committee helpful in understanding the complex world of measuring marketing ROI.  

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