You Can Measure Social Media ROI: The Incredible $20,000 Tweet
While some social media enthusiasts struggle with the question of how to measure the ROI from social media, the free market is alive and well and functioning. Consider this: an unnamed celebrity was recently paid $20,000 for a single tweet to endorse a product. A company called Sponsored Tweets matches advertisers with celebrities to create sponsored conversations on Twitter. According to Ted Murphy of Izea, the company that runs Sponsored Tweets, “It was actually an incredible value for the advertiser, since the net cost per click came out to less than $.50 per click.”
Sound familiar? This is nothing more than Old School mass media advertising. Considering that there are 350 million Facebook users, 75 million Twitter users, and over 50 million Linkedin users, it is not surprising that companies are figuring out ways to leverage the vast reach that these platforms can provide, sometimes in the most mercenary of ways.
But you don’t have to be a mass marketer to derive measurable ROI from social media. Take this example: a high tech conference, with a mere 350 Twitter followers, recently sent out a series of tweets promoting its conference. The links in each of the tweets were coded to enable tracking from a click on the link in the tweet through a completed registration. The result: $15,000 in registrations from new customers. The process can be analyzed as follows:
When you think about it, the progression from tweet to registration as illustrated above is similar to an email. Here are the parallels:
So in one instance, the case of the $20,000 tweet, Twitter is being used as mass media. In another instance, a series of tweets promoting a conference that generated $15,000 in registrations, Twitter is being used as a direct response vehicle.
A lot of the confusion over measuring the ROI of social media is a result of its chameleon-like qualities. For businesses, it can be leveraged as mass media, one-to-one marketing, customer service, a business intelligence tool, a source of new product ideas, competitive intelligence, market research, and in a host of other ways. Methods of measuring the ROI of every one of these disciplines have already been established in other contexts. These methods can be adapted to measure ROI on social media. But only one in six companies measures the ROI from their social media investment today.
Your company can measure the ROI of social media, and continuously improve it. Here’s how:
- Establish clear objectives for the use of social media. As we have seen, social media can be used to achieve multiple objectives. You need to be clear about how you intend to achieve and measure the results of every one of them.
- Categorize each type of customer interaction according to the objective it will help achieve. On Twitter, for example, each tweet will fall into a different category, based on its objective.
- Develop a tracking system that enables you to measure the results of each customer interaction in comparison with the desired result.
- Analyze the results in light of your objectives.
- Optimize your strategy – choose the tactics that are providing the most ROI. Eliminate the ones that aren’t.
- Go back to step 1. Set new objectives, and start the cycle again.
If you have clear objectives for your company’s use of social media, the ROI can be measured. Admittedly, some objectives may be harder to measure than others. But if you don’t measure it, you can’t improve it.
When approached in this way, I believe that social media will generate a high ROI for most companies. Social media advocates don’t need to struggle with the ROI question any longer. The ROI is there if companies approach their social media efforts the right way.