Do you feel confident that you know the real effects of social media on your business?
According to a CMO Survey, 41.5% of marketers haven’t been able to show the impact of social media on their business.
It can be tempting to look at basic metrics such as likes, shares, retweets, followers and comments to measure your social success.
Unfortunately these statistics do very little to measure the real impact your social efforts are having on your business.
Even metrics like click-through rates and traffic from social media don’t offer enough detail to allow us to understand if the investment we make on social media is generating worthwhile returns. Why? Because these metrics don’t measure the specific financial gains that social media is providing.
In order to assess the real social media impact on business statistics, marketers need to determine where social fits into their sales funnel, and use accurate methods to attribute business successes to key social media activities.
For all types of businesses, and particularly B2B, social media lead generation is an extremely effective source of revenue. However, unless they can establish methods for assessing the success of social, they will have no idea whether their social investment is worthwhile or a waste of resources.
This article will ensure that your social efforts are being properly measured.
Step 1: Understand the social media marketing funnel
The first step to measuring your social media success is getting to grips with the social media marketing funnel, which is split into four stages:
1. Awareness –
This is the first instance of consumers coming across your brand. You can build awareness on social media through both paid and unpaid posts as well as social promotions. And once you’ve captured their attention, you can focus on the next stage of the funnel…
2. Engagement –
Once consumers become aware of your brand, you need to work on engaging them and repeating visibility of your brand’s posts. Consumers who follow your social media pages or interact with posts through comments or shares are engaged, and a step closer to the most important step in your funnel…
3. Conversion –
Once consumers are engaged with your brand online, you can work on converting them into real customers via posts which compel them to take action – things like making a purchase, filling out a contact form, or signing up to receive a newsletter. Customers who are active and engaged on social media can lead you towards the final stage…
4. Advocacy and more awareness –
The reason why social media is such an incredible marketing tool is that as consumers pass through the marketing funnel, they can help you to drive more viewers through it as well.
When you engage with your customers on public, social platforms, you increase awareness of your brand organically to all your customers’ friends and followers, and the sales funnel can begin again. This infographic from QuickSprout gives some great insights into the social media marketing funnel and why it flips traditional marketing on its head by converting customers into sales people.
With your sales funnel in mind, you can begin to create a social media attribution model which gives credit to different social media successes throughout the sales funnel.
Step 2. Establish what social media attribution is for your business
Social media attribution is the process of giving credit to specific social media channels, campaigns or posts for successful business outcomes.
There are a wide variety of ways to attribute social media, and it can be tricky to choose an attribution model which is both easy to manage and accurate.
The problem with Google Analytics attribution model
When it comes to social media attribution, Google Analytics’ default attribution model simply doesn’t provide enough insight.
The default model works on a ‘last-click’ basis, which means that when it records a conversion on your website, it attributes that conversion to the last place the customer accessed your website.
When you consider that your social media marketing funnel requires awareness and engagement before a conversion occurs, it’s clear that the last-click model is not an accurate representation of the impact of social media on your marketing funnel.
For example…
Let’s say that a customer became aware of your product via a video on Facebook.
- They may then engage with you by following your business Page.
- A few days down the line, they may see you share another post about your product, and click a link via that post to read more on your website.
- While browsing, they sign up to your email newsletter to stay in the loop about special offers.
- A week later, they receive an email with a discount code and follow a link in that email to your website, where they purchase the product they originally discovered on Facebook.
According to Google Analytics’ default attribution model, only the last click would be attributed to that conversion. Despite all your success in creating awareness and engagement via your Facebook page, it is your email newsletter that will be attributed to that sale.
Choose a multi-touch social media attribution model
To gain more accurate insight into the social media impact on your marketing funnel, you should implement multi-touch attribution models which allow you to give different amounts of credit to different touchpoints in the customer journey.
Ultimately, your attribution model should acknowledge that most conversions don’t occur through single touchpoints, but through various touchpoints along the journey from awareness to conversion and beyond into advocacy and more awareness. In Google Analytics there are a few multi-touch attribution models to choose from:
1. Linear – credit for conversions is divided equally across every touchpoint before conversion.
2. Position based – fixed amounts of credit are given to first and last touchpoints, and the rest divided equally amongst touchpoints in between.
3. Time decay – credit is divided across multiple touchpoints with the most recent given higher credit, acknowledging that later touchpoints tend to drive the majority of conversions.
It can be impossible to understand exactly which touchpoint on a customer’s journey influences them most to convert, and in that respect, all of the models above are flawed to a certain degree.
However, they are a great place to start when attempting to understand where social media fits into your sales funnel, and you can use Google’s Model Comparison Tool to assess how different models impact your valuation of social media. Once you’ve tested and compared a few attribution models, you may want to consider creating a completely custom social media attribution model to most accurately measure the impact of social on your sales funnel.
Step 3: Calculate social media cost per acquisition
Establishing a process for attributing social media to your conversions is one thing, but to really understand the financial success of your social media efforts, you need to figure out how much social media marketing costs for each acquisition.
Let’s say, for example, that a campaign you create on Twitter is designed to drive email signups…
You may also have data on the number of email signups which lead to new customers (acquisitions). To determine the cost per acquisition (CPA), you need to establish the cost of that Twitter post, and divide it by the number of new customers who were driven to sign up to your email from it.
The cost of a social media post or campaign is the time and resources invested into it. This may include man hours spent on social activity, costs of using agencies or consultants, investment in social advertising, content creation costs and any other expenses involved in managing your social pages.
Here’s some example data:
- You spend $25 on the Twitter post
- You gain 16 email signups from the Twitter post
- You gain new customers from 25% of email signups
With this information, we can assume that 25% of the 16 email sign ups driven by Twitter resulted in acquisitions.
That means you achieved 4 acquisitions from the Twitter email-signup post. Your total spend for that Twitter post was $25 – simply divide that spend by the four customers, and you land at the CPA – $6.25.
Step 4. Calculate your social media ROI metrics
60% of marketers say that measuring ROI is one of the biggest challenges of social media.
However, if you have a strong understanding of the social media sales funnel and have implemented the most accurate attribution model possible, you can begin to get a real grasp of the return from your social media investment.
What is social media ROI?
Social media ROI = (Social media return – social media investment) x 100 / social media investment.
The equation is simple enough, but you need to have the figures available to make an accurate calculation.
Your social attribution model will help you to understand your social media return by assigning financial credit to conversions influenced by social media marketing.
For example, a conversion worth $100, for which your attribution model credited 30% to a social media post, would mean a social media return of $30.
Your social media investment is the time and resources invested into your social efforts. This may include man hours spent on social activity, costs of using agencies or consultants, investment in social advertising, content creation costs and any other expenses involved in managing your social pages.
Your social media ROI calculation may not be 100% accurate, but providing that you’re using a solid attribution model to assess the impact of business goals which have been created based on your marketing funnel, you’ll certainly be on the right track in measuring the success of your social media marketing. Armed with this valuable knowledge, you can then make more informed decisions about social media budgets and work on leveraging even bigger and better returns.
About the Author:
Matt Cayless is the Director of Client Strategy at Bubblegum Search, an SEO & Content Marketing Agency. When he’s not chasing the Google algorithm he can be found training for his next marathon. Follow him on Twitter @matt_cayless.
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