6 Ways to Demonstrate Social Media Marketing ROI

6 Ways to Demonstrate Social Media Marketing ROI

If, like me, you’ve worked in the marketing industry for ten years or more, chance are, you’ve had a question that goes a little something like this: Where is the ROI in PR? Or, is there really any benefit to marketing? Or (my personal favourite in recent years) what can social media really do for the company anyway?

Questions that (probably unbeknownst to the naïve asker) make your blood boil, that make the red mist descend, or that make you want to curl up in a little ball and hide under the covers indefinitely.

If your chosen marketing discipline cannot be measured based on immediate sales figures, then red-mist-inducing questions can be common place. And, unfortunately, it is the thinking (or lack thereof) behind such questions that often leads to your budget being hit first when things are tight.

For marketing professionals in some of the ‘softer’ marketing disciplines, like PR, quantification of results has always been notoriously difficult. Traditionally, PR campaign reports focus on figures linked to awareness: circulation and readership figures, website hits and impressions, the equivalent cost of advertising spend. For social media marketing managers, those same reports now centre on new fans and followers, the number of post likes, and website click-through rates. All too often, reports such as these engender a raised-eyebrow response from senior executives who want to see a clear, demonstrable return on investment for every marketing dollar spent.

All these awareness results and reporting metrics are a perfectly valid marketing objective for any business. Brand awareness is essential: you have to have an audience to market to. If no one knows who you are, no one will purchase your products or services. Social media is the perfect conversation platform for increasing brand engagement (keep in mind social media is best used for ‘pull’ marketing, rather than ‘push’ style marketing).

But, senior executives will want to see a more solid return on investment than simply increased brand awareness. For social media marketing to be considered successful, and sustainable long-term, you need to demonstrate exactly how social media is contributing to the company’s bottom line. Here’s a few tips on how to do exactly that, and how to manage a successful social media program.

1. Link social media marketing to broader business objectives

As with any marketing or advertising campaign, step one should be defining your objectives. Social media marketing objectives should always be linked back to broader business objectives. For instance, if your company is expanding into new markets, or new industries, then your over-arching social media marketing objective might be to establish your company as a thought leader within that new market or industry. Then, you could break this broader objective down into smaller, measureable, actionable goals. Your social media objective should never be something as open-ended as ‘Increase Twitter followers’.

2. Use an action-based metric for your social marketing campaign

Include an action-based metric that can be counted in your social media marketing campaign. In the case of social media, an action-based metric is often a click. So, give your fans and followers something to click on. Once you have their attention, give your fans and followers a specific task. Do you want them to share your update? Click on a landing page? Purchase your product? Provide their email address? Whatever the action might be, make sure that it is linked to our broader business objective, and that you have the tools in place to count and measure audience behaviour. The counting helps to quantify social media results, and demonstrate ROI.

3. Capture and cultivate leads

Once your fans and followers are following your lead, and responding to your call to action, re-route them through to some sort of lead capture form. This step can be tricky, and must be done carefully. Oftentimes, users don’t want to re-routed away from the website (or app) that they are already using. So, where possible, use data collection mechanisms that are embedded in the social media platform itself. Facebook enables custom tabs and promotions options. So use them. Then, set up a database that manages all these new leads, and that reports on their behaviour. For instance, you might add all new leads to your e-mail marketing subscriber list. Then, use your email-marketing software to record their behaviour, and track their newsletter opens.

4. Convert leads into customers

This is where senior executives get really excited. If you can demonstrate that you are cultivating customers all the way from Twitter to the cash register, then never again will you have to answer the red-mist-inducing question ever again. Once you have your leads on-board, and stored in your e-mail marketing software, it’s time to ensure that any multi-touch attribution is attributed to your social media campaign. Make sure that senior executives know that the only reason that customer XYZ purchased products was because you engaged them to Twitter to begin with.

5. Use Google Analytics

Make sure that your website has Google analytics installed and working. Then, by using the ‘Acquisition’ reporting section, you can determine exactly how your website visitors are landing on your site. You will be able to see, quickly and easily, what percentage of website traffic is being generated by social media platforms, compared to organic searches, other website referrals, and direct links.

6. Report in a format that senior executives will appreciate

All senior executives are busy; it goes with the territory. But, at the end of the day, they still want to know, and understand, how budgets are being spent, particularly when revenue is down. So, make sure that your social media marketing report is presented in the way that is most appealing to senior executives. Ensure that it is clear and concise. Make sure that reporting is consistent: that you consistently use the same reporting cycle, and the same reporting metrics. Make sure every month you are comparing apples and apples. It never hurts to include a detailed monthly report, with a brief (updated) annual summary.

For some further reading on the hot topic of social media, check out:

The Secret of Making Money with Daily Deal Sites

As the cost of living continues to increase, the marketing savvy consumer is trained to seek out the best deals before they buy holidays, furniture, clothes, beauty therapies etc. We all love a bargain and this is something that marketers use to their advantage to attract new customers to their business allowing them to trial their product for an attractive rate.

Interestingly, leading online customer service platform Get Satistfaction shows that one of the top reasons that people follow brands on Facebook and Twitter is because of the special offers and deals.

You’ve probably come across some of plenty of daily deal sites in your travels, here are just a few of the main ones:


We got in contact with our friend Richard Green from HotDeals.com.au to ask one of the leading experts a few questions on how to successfully use daily deal sites like HotDeals.com.au to promote your business and make money.

Marketing.com.au: From a marketing perspective, do you have a feel for the kind of return on investment that clients get promoting their products on daily deal sites?

That’s a good question. There’s no doubt that daily deals can be a great way to get your product in front of new customers, and whilst many marketers would argue that the savings in marketing spend to drive brand awareness outweigh the cost of the deal, it’s pretty easy to run an unprofitable deal.

The issue here is that every business is unique, and the success of any given deal is dependent on the quality of the offer and how well your business can serve the customers.

The ROI from these deals can be defined by two outcomes: the immediate return and the long term value. Generally speaking, most group buying promotions are run as loss leaders, with initial revenue losses compensated by increased brand awareness and repeat business over time.

From a business owner’s perspective, marketing a deal has no upfront cost, yet the deal company takes a significant commission on each sale on top of the already heavy discounting.

As with any marketing strategy it is important to recognise what you are attempting to achieve, and identify how to structure the promotion, execution and servicing of the deal to best capitalize your ROI.

I would also advise that business owners understand their average sale/order size and customer acquisition cost, which is simply the sum of total sales and marketing costs divided by the number of new customers gained during a specific period. Doing so will allow you to estimate the return your business is likely to see from discounts/coupons.

Marketing.com.au: What do you find are the types of offers that really work to attract new customers?

One of the best uses for group buying is to move excess stock, but I don’t believe the issue is so much with the deals, as to promote an offer you’re pretty much guaranteed to have a great deal with. Who doesn’t love a good bargain? Perhaps the biggest shortcoming of the group buying model is the uncertainty around acquiring repeat customers, with many merchants complaining about lack of consumer loyalty.

I think it’s easy to be overly optimistic and merchants should look at ways to extract the most value out of their campaigns by developing strong execution and retention strategies before they offer the deal.

What that might be will depend on the given business, but perhaps it’s providing a “welcome kit” that entices repeat spend, product add-ons, or secondary vouchers to share with friends.

From there, once that initial transaction has taken place, the customers information should be retained and used to build an ongoing relationship via new or existing marketing channels (like targeted email marketing campaigns).

For ROI tracking purposes you’ll also want to make note of the voucher’s use, any additional spend on top of the voucher and whether it was used by a new customer.

Basically merchants should be looking to get most out of their up selling and after service opportunities in order to capitalise on the original investment.

Marketing.com.au: Are there any tips on what types of offers marketers should avoid?

I think it’s important that merchants fully understand what they are signing up for. Whilst the group buying space works well across many verticals, many businesses have been burnt quite badly by the experience.

Merchants need to consider limiting the number of vouchers that can be redeemed the first time around. Many of the industries early adopters failed to plan for unexpected volume and complained about being overrun.

Not only can this cause a revenue deficit, but it can tarnish your businesses reputation, as angry customers vent their frustrations online about being unable to redeem their vouchers.

From the consumer’s point of view, there are two common complaints. The first is not receiving goods within an expecting time frame and the other is experiencing second rate customer service after presenting a voucher.

Thanks for your time Richard, that’s some great advice for us all to take on board.

The Real Cost of Marketing

How much marketing costs, or how much to spend on marketing can be a very tricky question for a lot of companies to their collective head around. It’s kind of like the chicken and the egg scenario. You need to undertake marketing to attract clients but unless you have clients (and therefore a bit of cashflow), you can’t afford to undertake marketing. Sound about right? And when it comes to working out a marketing budget, how much to spend can be impossible to work out. How long is a piece of string? While we can’t answer that for you, we can give you some elements to consider when putting together a marketing budget.

First of all, do you know what marketing actually is? What is marketing in a nutshell? In case you aren’t sure here you are: marketing is everything that your company does in order to reach your target audience and convince them to buy your product and service. Don’t forget about the second step in that definition. It is no good to just ‘reach’ your audience. You must motivate them to take action, to buy your product, to log on to your website, to phone your service number. This is the only way you are going to convert your marketing spend into profit. Otherwise, what’s the point of spending the cash at all?

The next thing to remember is that marketing is a process, comprised of many elements, steps and phases. A good marketing campaign is not a two day TV ad placement. It is an integrated program which may include (but in way should be limited to): television, radio, social media, print, PR and mobile marketing elements. As such, you will probably need to purchase a few resources and bring in an expert consultant to help you out with all these elements.

How much you need to spend on these resources and experts is up to you and will differ greatly, depending on the industry you might be in and the scale of the business. There are a few ways that you might like to work out your marketing spend: a percentage of your total revenue; a percentage of profits; or a specific amount each year.

Regardless of how much you actually spend on marketing, the most important thing to keep in mind is return on investment. There is no point in spending big bucks and getting nothing back in return. Marketing should increase revenue and profit. Maybe not immediately, but definitely over time.

Just remember that free marketing does not exist. Unfortunately, to grow your business, you will need to invest in it. You will either have to pay with your time or with cold hard cash for results in the world of marketing. In today’s fast-paced, consumer driven marketplace, there just isn’t any other option.

Marketing.com.au would like to thank Sally for sharing these insights with us.



Digital Marketing in 2012: Will it be the year of the application?

Now that 2012 has gotten off to a roaring start, perhaps it is time to take a look at what’s in store for the digital marketing industry for the year. As with any industry, in any year, there will be challenges as well as successes.

From our extensive research (well, we did a bit of a Google search), we reckon that 2012 will be the year of the application. Bet you didn’t see that one coming did you? (Side note: if you didn’t see that one coming, and you are working in the digital marketing space, we suggest that you change careers NOW!)

As such, we’ve put together our five top items that you might want to put on your digital marketing agenda for the year.

  1. Get mobile: we don’t mean that you should rush out to Telstra and arm all your employees with the latest iPhone. What we do mean (and we’re talking to all you marketing and advertising execs out there) is that you need to work out how to effectively integrate ‘mobile-ness’ into your annual business plans and budgets. With consumers increasing their use of mobile devices exponentially every year, mobile marketing is no longer optional (at least, not if you want a successful brand). It is now indispensible. In 2011, Google estimated that 44% of last-minute shopping searches were from either smartphones or tablets. In 2012, if you do not optimise your website for ‘mobile-ness’, with a specific format and landing page for mobile devices, you will be at a serious disadvantage.
  2. Better methods of measuring Return On Investment: as with any type of expenditure by a company, there has to be a clear Return On Investment (ROI). To calculate and better demonstrate this ROI, there has to be a solid foundation of digital marketing measurement metrics. Generally, in the world of digital marketing, this is currently based around the concepts of ‘cost per click’ and ‘conversion rate’. However, as companies begin to allocate more funding to the digital marketing pool, there will need to be a more direct correlation between digital marketing expenditure and profit (and obviously a means by which to measure this).
  3. Increased focus on research: for a relatively new marketing medium, most companies do not undertake a great deal of research into the field of digital marketing. As overall budgets for digital marketing increase, so will digital marketing research budgets. There is no industry standard for digital marketing, like radio and television rating schemes. Research will help build on aspects such as this.
  4. Integrated marketing methods: this phrase has been hanging around for a few years now. The reason that it is still around is that most companies still haven’t quite got it right. Integrated marketing is not simply about using all marketing mediums; it is really just the first step. The second step is using one channel to promote the other channels. What you really need to do is leverage the use of each channel through an integrated marketing plan. Sound tricky? Well, that’s why it’s still on the agenda. It requires innovative thought, big ideas and artful execution.
  5. Customer engagement through digital marketing: we all know that customer engagement (and to a lesser degree validation) is vital in any marketing strategy these days. This is where social media comes in to play. Customers (or consumers or clients or whatever term you like to use) like to feel as though they are part of the process and can shape your brand, product or service with their feedback. So, we believe that in 2012, companies will tap into this, particularly during the lifecycle of new products (it’s free feedback throughout the planning, concept development and testing and launch phases). In 2012, companies that are digital marketing savvy will use social media to ensure the product they are launching is popular, the process will bolster their online community, strengthen their brand and give them a competitive advantage. Ticks all the boxes really.
Marketing.com.au would like to thank Sally for her fantastic ongoing contributions.