Measuring
the ROI of social media marketing
The main aim of social media is to engage with your
customers, improve brand awareness, and essentially build a loyal fan base
online which should have effects financially. But initially won’t be visible.
Other medias such as TV, radio and Magazine ads, the primary
aim is to sell or distribute. Eventually (if done correctly) there will be
financial gain to social media, the length of time will be longer and the true
source of the customers influence to purchase can be distorted.
Like most marketing campaigns a project proposal will need
to be constructed for social media marketing. Establishing the aims,
objectives, content and progression of the campaign can be established like
other medias. However, measuring the effects of social media can be harder. This
makes pitching the idea to a manager difficult if they don’t fully understand
the concept of SMM (Social Media Marketing).
Reasons as to why measuring the results is tricky
Social media is the ‘transmission
of multiple messages to multiple users who extend conversations that invite
responses from others’. The image
below shows the transactions of a message on a social media site, as you can
see the message reaches multiple people who allow more people to see it. This
is the snowball effect displaying an exponential growth in exposure using
E-Wom.
As you can see from the chart above, each social media interacts
with other medias. Not only do users on the same site share ideas, the message
may move across sites increasing exposure even more.
Establishing KPI’s and diagnostic metrics
In the case of social media KPI’s are measurements such as;
likes, shares, followers, tweets. These are indicators of customer engagement.
Once results on KPIs have come in, you will need to assess what works and what
doesn’t. Certain content won’t have the desired effect on your audience. The
assessment of your diagnostic metrics will allow you to make the changes needed
to improve the quality of content and thus improve levels of engagement
displayed by KPI’s.
Social media doesn’t require large forms of financial investment
(in most cases). Monitoring and evaluating the effectiveness of KPI’s takes
resources, mainly human, in the form of time and effort. In effect SMM changes
the way we look at investing money into marketing, when money is taken out of
the equation.
ROI (Return on Investment) --> ROT
(Return on Time)
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