Measuring roi on digital spend

1. MEASURING ROI
ON DIGITAL
SPEND

3. INTRODUCTION
When it comes to social media marketing, there is perhaps no other topic that is
discussed more than determining and reporting return on investment, or ROI.
Marketers intuitively understand that building marketplace awareness is essential.
Obviously, your customers need to be aware of your brand, product or service in order to
buy it. But awareness and brand building aren’t enough. Businesses like retailers that
frequently have a presence both offline and online have numerous variables to factor
into ROI, such as point-of-sale information and online purchases. Capturing and
interpreting data from multiple, and sometimes disconnected, sources can add
additional layers of complication.

4. WHAT IS ROI
 Return on investment (ROI) simply refers to the idea that something of
value has resulted from an investment of time, energy, or money. In
financial circles ROI usually is reduced to a formula.
 ROI is calculated by simply subtracting the cost of an investment from
the proceeds received from the investment, divided by that same
investment cost
ROI = Benefits - Costs x 100 = Percentage Return on the Investment Costs

6. WHY IS
MEASURING ROI IMPORTANT
 Proving the value of social media to your organization’s overall goals and business
objectives
 Allowing you to clearly see where efforts and resources are being used efficiently
 Enabling you to evaluate where resources are being wasted, or not used as efficiently
as possible
 Allowing you to recognize gaps in strategy, key messages, and content
 Showing where your social media budget is being used most effectively, and showing
areas where it can be pulled back

7. DEFINE YOUR METRICS
 Online engagement
 Website registrations/downloads
 Average engagement time
 Online sales/donation volume
 Sales/revenue growth
 Market share

8. QUICK STEPS TO MEASURE ROI
So how do you align your social media efforts with your business goals?
Let us attempt to simplify the process into three steps:
1. Decide which metrics are important.
2. Measure the metrics.
3. Check your results against your goals.

9. 1. DECIDE WHICH METRICS ARE
IMPORTANT
No campaign can work based on the overall strategy alone. For the
campaign to be meaningful and measurable, you need to break down your
big picture into smaller bite-sized goals. Each of these goals can be
measured using specific social media metrics like:
 Reach
 Engagement
 Traffic
 Conversion

11. 2. MEASURE THE METRICS
Nearly every metric is measurable if you adopt the right approach.
 Tools- Most social media platforms offer some form of native analytics suite for
corporate account users (e.g., Facebook Insights and Twitter Analytics).
 Tracking- The trick to tracking social media metrics effectively lies in identifying the
some equations.
 Reporting

12. 3. CHECK THE RESULTS OF YOUR
GOALS
This is the final step, where we get the proof of the pudding. Compare the
results achieved against the goals laid out, and measure the surplus or
shortfall in numbers. ROI is a function of your marketing costs vs. the net
profits you generate from social media:

13. ROI MEASUREMENT.
 Define relevant success metrics that translate into a business context.
I. Quantitative - sales (obviously), new leads, new qualified subscribers
II. Qualitative - satisfaction, loyalty, authority, interaction, feedback .
 Set campaign goals based on these metrics. Your return is successfully meeting or
exceeding these goals.
 Implement campaign, review metrics and goals. Filter out channels and strategies
that don’t get good returns. Repeat.

14. QUALITATIVE
 Followers/fans
 Engagement
 Timing
 Click-through rate
QUANTITATIVE
 Influence
 Sentiment
 Conversion Drivers

15. …OTHER MEASUREMENTS
 If you’re measuring to the goal of protecting your reputation, you report online sentiment, Q-
scores, positive vs. negative articles ranking in search and the like. That’s your return.
 If you’re measuring to the goal of building community, you report on size and scope of the
community. You can also report on how much the community spends vs. those not in the
community, so there can be some revenue discussion. But you report community metrics.
 If you’re measuring public relations, you report on public relations measures like successful
messaging resonance, media relations hits, community partners engaged and so on. That’s
your return.
 If you’re measuring to the goal of facilitating customer service, you report on things like cases
handled, solved, customer satisfaction and the like.
 If you’re measuring to the goal of research and development, you look at new products or
features created. You can also then track and measure revenue derived from those new
products or features. Or even cost savings from conducting research and development in the
online space vs. outsourcing to a market research firm.
 And if you’re measuring to the goal of sales or leads, you look at revenue in, conversions, sales,
etc.

17. SOCIAL MEDIA MEASUREMENT
TOOLS
 Google Analytics
 Salesforce:
 Hootsuite Analytics
 Facebook Conversion Measurement

18. TOP REASONS TO MARKET ON
SOCIAL MEDIA
 Brand awareness and top-of-mind recall
 Website traffic
 Customer acquisition
 Customer retention
 Brand advocacy

19. THANK YOU