Master social media ROI
Measuring the value of marketing efforts on Facebook remains a mix of art and science. While most marketers agree that putting an exact value on the fans, shares or interaction on Facebook is difficult, they do express optimism that the Facebook ROI moment is not far off.
A Bazaarvoice survey of CMOs released in January found that 74% of respondents expect that they will be able to tie social media efforts to ROI this year, even though only 40% said they were able to do so in 2010.
"We provide detailed reports weekly and monthly of key analytics: growth month-over-month, engagements and fans," says Matt Wurst, director of digital communities at 360i. He adds that while this gives them a sense of general interest in brands, the agency ideally seeks the percentage of fans that are active. That remains in question.
"Oreo [a client of 360i's] has 20 million fans, but is it the same few people who are commenting on and liking each post or is it a larger group?" Wurst asks.
Nichole Kelly, CEO of Full Frontal ROI, a consulting company, has found the best strategy is to approach metrics in terms of the sales funnel.
"The brand metrics on top are the ones that are readily available — fans, comments and click-throughs," says Kelly. "On the lower level are sales and revenue. It's sometimes a mistake for marketers to think that the tmetrics on top can directly correlate to those final metrics."
To track whether the brand metrics are translating into sales, she recommends using custom URLs like HootSuite's Ow.ly, and analytics, whether through Facebook, Google or other tools.
In May, Facebook introduced the latest iteration of its own ads dashboard, which shows not just the number of people who clicked through on a sponsored ad, but how it compares with its potential reach.
It also allows marketers to look at clicks the ad receives compared with the number of "connections," meaning those taking the action encouraged in the ad, whether by installing an app or by clicking "like."
For marketers working with e-commerce clients directly advertising on Facebook, Buddy Media's recent acquisition of Spinback may provide a possible answer. The social plug-in and analytics dashboard allows online retailers to track a transaction from a share on a social network to a purchase.
"It actually lets us answer the question, 'what is this social sharing on Facebook or elsewhere doing for the bottom line?'" says Michael Lazerow, founder and CEO of Buddy Media. "Tracking who is sharing that information and whether it leads to a purchase is valuable information for retailers."