Today social media marketing is an integral part of the overall online marketing strategy for a number of firms. But the issue of measuring social media ROI is yet to be resolved effectively.
Unless marketers can measure the impact of social efforts on the bottom line, it is difficult to justify social media expenses. The sources of online traffic such as organic searches, ads, bookmarks and referrals usually offers high conversion rates, in contrast, social traffic is known for low browse rates, high bounce rates and very poor conversion rates.
This may make you wonder whether social marketing is really worth the effort. The understanding of the classic conversion funnel makes it clear that social efforts do matter. Potential customers first discover products or services, realize the need for such products/services, consider buying and finally make a purchase.
This is the order of events in the conversion funnel. What marketers need to understand is that the sources of social traffic like Twitter, Facebook, Google+ and LinkedIn come under the discovery phase. This explains the low conversion rates of social traffic. Social media marketing increases brand familiarity, boosts traffic, generates positive brand associations, and builds a network of evangelists and followers to spread the word of mouth.
Key metrics that can help you measure the ROI of social efforts include the number of followers/fans and their growth rate, traffic data, social content performance and social interaction data. You may have to segment social media into different networks like Facebook, Twitter and LinkedIn, and monitor them individually to get the required data.