By now, you’ve probably heard all about our ground breaking Social Media ROI formula that allows businesses to accurately calculate the Return on Investment of their social media efforts. If you haven’t heard about it yet, you’re in luck – we’re hosting another webinar on the topic (and at the time of this posting, there are still a handful of open registration spots left). So go sign up and then come back to finish reading this 100% all-natural, hand-crafted blog!
Over the course of our first few webinars on this topic, we have been getting some great questions from the audience. Some of the questions dealt with the application of the formula to specific industries, while others were a bit more broad in scope. Below you will find a compilation of some of the more general questions. Hopefully this will help you gain a deeper understanding of how the #MMSROI formula allows us to benchmark campaigns and create stronger, focused, and measured social media strategies.
How well do these formulas scale down for companies that are just getting started and have few followers and little posting activity?
There’s always a page out there starting with a fan base of zero, and sometimes pages at 50,000 plus fans are really starting from the same place. Either way, it’s important to look at industry averages when you choose the level of response and activity that you want to achieve over time, and set clear goals.
If you think of the social media campaign like any other startup or initial investment, you’re going to spend more than you make upfront. Over time, as you build it up, you will start to achieve your ROI. At Make Me Social, we take snapshots on a monthly basis in order to track activity, but look for quarterly and long term trends to determine the true ROI. Anyone can have an up or down month and the key is to learn from that month and identify why the impressions and engagement numbers were low or high, and then make the necessary adjustments based on the results of that analysis to keep the social funnel healthy.
You can look at your spend over time and say that based on industry averages, here is what you should expect given your efforts over that time period, and then start feeding that against the results from your channels.
Where do these numbers come from and how difficult are they to track?
This comes back to utilizing the standard industry platforms and measurement management tools that exist. We, as an agency, have a battery of them that we pick-and-choose from, based on the goals of the client. The tools range in scope from the simplicity of Hootsuite all the way up to the level of depth that you get from the page through Buddy Media. The technology and the leaps being made inside of the platforms help you gather the data needed to calculate some of these numbers. With Facebook, the Insights Analytic tool continues to improve and provide some very specific data points. So today, I can log into Facebook, and Insights will give a fairly deep view of the existing fan base, the number of post impressions, and some of the basic counts and information necessary to help me calculate my returns. The magic happens when you make the commitment to put the energy and effort into pulling the data and running it through the formula.
Our formula corresponds a click, share, retweet, or any other clickable engagement to a social post, similar to the engagement or interaction that takes place when someone clicks on a Pay Per Click (PPC) ad. As such, we place a value on the social interaction equal to the cost of a Pay Per Click ad. Make Me Social has done a significant amount of research online and in meetings with media buyers to determine the value several different industries are paying for PPC ads. The average online PPC rate depends on the size of a business as well as what industry the business is in, so you can see a range from $2.85 all the way up to $10. If you’re a smaller business, chances are that you’re not spending the $10, you’re spending the $2.85. A larger business is more likely to spend the $10. For simplicity across the board, a business may just want to use the average industry rate. It’s important to understand what you would be paying for each click given your business’s size and industry.
To learn more about the PPC rate that you should be using, call 904-824-8830 or email firstname.lastname@example.org to schedule a free consultation.
Do employees who “like” a company’s page make it harder to calculate the ROI?
We don’t think so. Employees engaging on the platform factor into the formula, many of them may be some of the most engaged people on the page, especially early on. We relate this back to traditional media: if an employee of GM sees a television ad for GM, they still have the same opportunity to have an experience, engage with the brand, and more importantly, share the experience with others. So while the employee network may be interjected into overall return, it is still important because they represent the low hanging fruit, your referral base network, and an opportunity to engage with an audience that’s interested in seeing the brand expand. An engagement has value regardless of the “clicker.” There are different qualifications, factors, and weights that can be added in to the calculation to make adjustments to the overall value, but there is still value in every click.
If you’re still not sure, it’s good to engage Human Resources for their thoughts. HR knows that an engaged employee is more likely to stay employed and/or be more engaged in their job as well.
Is it more important to increase awareness first or to focus on growing engagement on social channels?
From an ROI standpoint, the more you can engage people the better you’ll be. But it needs to start with awareness. We use the Cost Per Thousand (CPM) to calculate awareness in the #MMSROI formula, and CPM is a pretty standard number across the board. What it comes down to is that because the PPC rate is valued at more than an impression, you can see that increasing engagement will give you more bang for your buck.
Platforms reward you for engagement, which can help you increase your return over time. If you make a post to Facebook and no one engages with it, over time Facebook will start to show your posts less and less in the Newsfeed. This will make impressions go down, and impressions are a vital component to a successful campaign. It is important to get really clear, strong messaging out the door to build engagement so that, over time, you can build a case for the platform to show your messaging, share your information, and let the network work for you. So engagement becomes a key component of the ROI calculation.
Four questions and answers are not going to be enough to give you a total understanding of the #MMSROI formula, so be sure to join us for a full explanation this Tuesday, July 26th at 2 PM EDT. If you have any specific questions, post them in the comments below.
When she’s not working as a marketing manager for Make Me Social, Mandi Frishman gets her adrenaline pumping by watching turtle races. During her time studying at The University of Florida, Mandi became convinced in the power of learning through play. She has since committed herself to playing (and learning) all day, every day.