The common question and concern for many who consider the investment in social media and online marketing is how success is determined, and what the return on investment will be? How does one know the investment was worthwhile? ROI in social media is difficult to calculate, but there is a lot to support how effective online marketing, especially Search Engine Optimization can be in attracting more business.
A key to determining ROI is setting appropriate and realistic goals. A single social media campaign or online contest will not necessarily be designed to cause a skyrocket of sales, but it should generate conversations, be shared, and generate brand awareness. Some goals such as receiving 50 additional likes on the Facebook page, or have 30 more followers on Twitter can be more tangible results of a campaign. The goals could also be to generate 15 external links which would not only boost awareness of the brand, but also improve results on SEO. However, these non-monetary goals are not the only ROI that a brand should expect from their investment in online marketing.
These goals can also be business specific and designed to fit the campaign. By providing incentives that require the consumer to use the brand if they win (or as a step to enter into the contest), a company can see direct results with the success of the campaign. For instance, should a contest require a consumer to sign up for the company’s newsletter, or create an account with the company, the new number of addresses or accounts gathered by the campaign can be seen as the ROI for that investment. If an email address is gained from the campaign, this can be then evaluated as likely future sales using the ROI the business gets on its email campaigns. So if one were to garner 1000 new email addresses, and the percentage of people who respond to email campaigns is 5%, who on average spend $25 when they respond. The ROI for the original social media campaign was then $1250 plus the free advertising and engagement that was received as a result of the brand being posted on thousands more individuals’ news and Twitter feeds.
Additionally, campaigns can be constructed to force individuals to use their services. For instance, anyone who purchases something on the site will be eligible to win one of 10 Ipads, requiring the user to enter a code in at checkout. This campaign will not only draw more people to make purchases then and there, but also draw more people to like the page and share the contest with their friends. The ROI is again easily accessible by noting how many people used that specific code when checking out. Though a portion of those sales would likely have been collected regardless of the promotion, the increase in sales during the time period of the promotion should be measurable. This success can be compounded by announcing the winners weekly, generating continued interest and getting people to check back on the page to see who won. The possibilities are endless, but require creativity and ingenuity to maximize returns.
These ideas of course can be scaled up or down depending on the scale of the companies operations, their budget, and organic engagement with the page’s social media. This tells us that social media falls into the category of “winners win”. Those who are successfully using their social media already will see more results than those offering the same promotion who don’t regularly update their page or provide creative content. When a page develops useful and interesting content that the consumer engages with, it is far more likely to appear on their news feeds. As the fight for space on that page is a zero sum game, that means an equally compelling campaign by an organization that doesn’t keep up its social media will not have an equivalent ROI. The bottom line? Maintaining high quality material online is a prerequisite to any campaign, and as the quality of the page improves, so will ROI.