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Grow Your Business Social Media

Social Success? How to Measure Social Media Marketing ROI

Social Success? How to Measure Social Media Marketing ROI
Measuring social media marketing ROI is one of toughest challenges for businesses. / Credit: Twin Design / Shutterstock.com

What's the biggest challenge to Twitter marketing? Although making lasting connections and gaining followers are difficult goals to achieve, measuring return on investment (ROI) is the biggest obstacle for almost half of brands, new research reveals.

Even though 64.9 percent of brands agree that Twitter is an effective marketing tool, 45.1 percent reported that measuring ROI and results is the No. 1 challenge in Twitter marketing, followed by audience building (42.1 percent) and engagement (36.8 percent), according to the study, conducted by Social Media Marketing University (SMMU), an online training firm specializing in social media and online marketing courses.

Overall, 96.2 percent of brands reported that they still struggle to achieve specific goals while using Twitter as part of their social media marketing campaigns.

"Social media has become a significant play in the marketing world — so much so that brands are almost forced to leverage it, even if they are unsure of its value," John Souza, founder of SMMU, said in a statement. [Read Related Article: 8 Secrets to Twitter Marketing Success]

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Souza and his team found that there are many ways brands are incorporating Twitter into their social media marketing plans, he said. "The challenge is that if marketers aren't able to demonstrate in black and white how their efforts are paying off, it will be difficult to make the case that Twitter's paid or unpaid services are worth the investment."

To help businesses tackle this challenge, Souza provided the following tips for how to understand and measure social media marketing ROI.

1. Define your social goals.

Many organizations that report having difficulty measuring social media ROI have not defined specific, tangible goals. The first step in successfully measuring ROI is to establish these goals and then build your strategy to specifically accomplish those goals.

2. Be "SMART."

Peter Drucker, who is known as the father of modern management, came up with the "SMART" methodology. It is a great rule of thumb for brands. The "SMART" methodology says that goals should be specific, measurable, actionable, realistic and timed:

  • Specific. Be specific in target results. For instance, use numbers and action verbs — change, improve, complete, perform, etc. — when setting goals.
  • Measurable. Have a way to measure progress.
  • Actionable. Goals should be achievable by those assigned to work on them.
  • Realistic. Consider available resources and skills to make sure goals are not impossible to achieve.
  • Timed. Set a deadline or timetable by which goals should be achieved.

3. Tailor your metrics for social.

Measuring social media ROI can be challenging for brands because they are using metrics that aren't aligned with social media. The foundation of your metrics should be audience, reach, engagement and sentiment. You can then create an approach based on those areas that's as simple or as complex as you want or need.

4. Create a dashboard.

Every brand should have a central hub for data, whether you're using a third-party tool or something that you've created internally, like an Excel spreadsheet. Data should be collected and evaluated on a consistent basis.

5. Design your own systems.

There are many different metrics models you can use to guide your approach, but it's also helpful to evaluate what's important to your brand and develop systems for evaluating performance in those key areas. For example, you can create an engagement rating system and assign points to things like mentions, retweets and favorites to help quantify social wins and losses.

Business News Daily Editor

Business News Daily was founded in 2010 as a resource for small business owners at all stages of their entrepreneurial journey. Our site is focused exclusively on giving small business advice, tutorials and insider insights. Business News Daily is owned by Business.com.