More and more resources are allocated to social media, yet, the ROI remains elusive. In the absence of relevant metrics, marketers will base their evaluation of social media efficiency on guesses and optimistic estimates.

Social media marketing could never work at optimal efficiency unless you can determine how well social marketing tactics function. Thanks to social media, small and large businesses can engage with existing clients or business prospects, but how much money comes out of all these marketing efforts proves hard to determine. We can see that lots of money goes into social media marketing, but can you trust that social media campaigns have good ROI?

How can social media help your business?

  • Social media helps create brand awareness, yet it does not function like a direct sales engine.
  • Companies engage directly with clients and prospects, thus building brand loyalty. They can monitor online exchanges about their products and services, respond to complaints and accumulate feedback.
  • Enhanced traffic and SEO to the primary website represent other major benefits of social media.
  • For companies targeting the international market, social media plays an essential part in the localization process.

Quantifying benefits to evaluate ROI

Although it is possible to define measurable social media goals, it’s nonetheless true that some of the benefits mentioned above are very difficult to quantify objectively. Here are a few examples that illustrate the quantification process for social media:

  • Lead generation could be measured by content downloads and email opt-ins;
  • Brand awareness by Facebook likes;
  • Sales by using a social media channel for direct orders.
  • Market research by using community feedback left on Facebook and Twitter etc.

If we are to follow the precise definition of ROI and try to apply it to social media marketing efficiency, it would become almost impossible to pin down the exact benefits of a certain social media strategy.

Tracking conversions to determine ROI

Social media analytics depend on goal definition for every type of conversion. By conversions, we imply a sale, downloaded coupon, email subscription or any other kind of action that the user takes in relation with your business. Only after defining goals, can you start using Google Analytics or some other web tool for monitoring social media campaigns.

As a primary goal to start with, social media strategists emphasize the importance of posting authentic, meaningful content across the social media channels. The content that you post ought to be relevant for followers, because it gets most comments, likes and shares. Eventually, this popularity will translate in bigger sales for you.

Is it possible to determine business growth based on social media metrics?

There is no magic solution for translating Facebook or Twitter followers into paying customers. Google Analytics, Twitter Analytics, Facebook Insights, Buffer, Bitly and other specialized software programs can now help marketers track their ROI and business performance on social media. However, the use of analytical tools should not limit the marketing view, but actually make it broader.

This trend becomes obvious in the efforts made by many successful companies to veer away from the tendency of accurately determining the ROI, toward a more holistic view of social media marketing. This viewpoint encompasses the social media aspects that still elude clear quantification.