Social Media ROI Report
The importance of goals and success metrics
Brought to you by Peashoot, from Egg Co.
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For a marketing team within a larger organization or a client-
facing agency, being able to quantify growth or returns on a
campaign is of vital importance when presenting results to
upper management or clients - not to mention important to
yourself or your team in order to determine whether your
campaigns are actually working.
This report discusses these three areas:
• The difficulties of measuring Social Media ROI
• Defining Better Success Metrics
• Real-world Examples of Social Media Campaigns
Written by Jon Anthony Yongfook Cockle, Chief Gardener at Egg Co.
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Problems with Measuring Social Media ROI
Avinash Kaushik recently tweeted the above, rather funny quote. He is of course
touching on the fact that often, the results of social media are hard to measure -
and he is saying this from the viewpoint of an analyst.
Why do the returns from social media have a reputation for being difficult to
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Return on Investment
One of the first things we should clarify is this notion of “ROI”.
Here’s what ROI means:
Return on Investment is a measure of how much return you receive from each
This is a term we traditionally associate with advertising and ad campaigns.
“Investment” implies some kind of capital outlay, such as hiring an ad agency to
put together a campaign, or procuring 250,000 bouncy balls. This of course can
cost anything from thousands to millions of dollars, so we quite rightly expect
returns on the investment. The point about social media is that it doesn’t need to
cost much. In fact it doesn’t need to cost anything. A successful social media
campaign can be something started by you for $0 and expanded upon by your
users/customers, or it can be something implemented and maintained by an
existing member of staff taking up just minutes of their work day - we’ll look at a
real-world example of that later in this report.
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Social Media for Marketing?
There is also some sentiment towards social media being more fundamental than
a marketing tool.
Some people believe that social media is not a channel to sell things but it is
something that should be used purely to engage with your customers. An
extension of ethics - something so core to your business that you should just be
“doing it” and not thinking about what you get back from it.
At Egg Co. we’re of the mindset that it’s a pretty diverse platform; social media can
be used for selling just as well as it can be used for listening.
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Of course one of the big issues with measuring and understanding the returns
from social media is that often, the benefits extolled by its advocates are
qualitative in nature.
We know that good social media campaigns can increase loyalty, influence and all
these other exciting-sounding attributes but at the same time, they are a little
vague. If we increase influence by 5%, what does that actually mean?
Breaking down these qualitative attributes into bite-size chunks that we can
measure, understand and translate easily into a business context is a vital step in
measuring social media ROI.
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Deﬁning and Setting Success Metrics
It sounds like I’m stating the obvious, but the key to measuring returns is…
knowing what to measure. This is the area where businesses - without proper
guidance, or internal knowledge - start seeing fuzzy returns. Often the reason
organizations or marketing teams don’t see recognizable returns or returns that
are hard to quantify for social media campaigns is because they are using the
wrong metrics - or not using any at all.
Choosing the right success metrics (or KPIs if you’re an MBA-type) is the first
challenge of implementing a social media campaign you can measure.
There are infinite things that can be measured when you’re talking about digital
communication / transactions. The smart companies are the ones who
successfully figure out what success metrics translate easily into a business
context for their organization.
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Filter Out the Noise
A successful campaign is about getting engagement. Or at the least, it’s about
getting attention from the right kind of people. In both cases, being strict about
what you measure is the key to seeing greater returns.
For example - the number of followers on your twitter account is a pretty
meaningless success metric to use, although it might be satisfying and flattering to
try to increase. However, if for example you are a flower shop owner in the middle
of downtown Tokyo and you implement a social media campaign to get 200 male
followers on Twitter who live in Tokyo - that’s a metric that translates into a
business context without any jiggling. That’s 200 qualified leads you can offer
Valentine’s day discounts to in the week before February 14th. 200 leads to
remind that it’s Mother’s day soon.
Choosing more granular goals like this will make the relationship between the
outcome of the campaign and your company’s bottom line easier to understand.
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Deﬁning Success Metrics
The next question is then, “ok, what should my success metrics be?” and there is
no short answer to that. This is where your marketing team or social media
consultant comes in to help you define what things you should be measuring.
It depends on various factors such as what tools you have available to you, what
are the goals of your campaign etc. One thing to remember is that by defining
success metrics you can break down qualitative attributes into metrics that are
easier to understand and measure.
For example your campaign goal could be to increase “Influence” and you might
measure this by the number of influential blogs linking to you and the number of
influential twitters retweeting you, to give two simple ideas for metrics.
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Returns don’t always need to directly translate into revenue if the return is
undeniably a positive force for the organization.
A good example of this is a campaign that increases authority, which you might
break down into metrics like page-rank of your blog and page-rank relative to your
competitors. Setting a campaign goal of increasing your page-rank to beyond that
of your competitors is undeniably a positive force for your organization, even if it
doesn’t translate immediately into returns in the form of revenue.
It will translate further down the line in the form of more organic search traffic to
your website, and online competitive advantage over your competitor. We
shouldn’t be afraid of recognizing a results like these as valid returns from a
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Measuring Qualitative Returns ~ Rackspace
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Here’s a really basic example of a campaign to increase customer loyalty, which
we can measure simply by the amount of customers we interact with, and the
number of subsequent, positive conversations this spawns.
I signed up with Rackspace recently and was so impressed with their support that
I tweeted something along the lines of “wow, I’m impressed with Rackspace’s
support” - about 5 minutes after which I received the above reply quite
unexpectedly from a Rackspace employee.
This is an example of what I said at the very start - this isn’t an expensive
campaign, someone at Rackspace is probably taking a little time out of their day to
see who is talking about Rackspace on Twitter and shooting back a nice
message to people saying nice things.
It took that person seconds to type, but it will probably have an impact - however
small - on my decision to re-contract with them next year.
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Measuring Qualitative Returns ~ Starbucks
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Starbucks implemented this campaign (similar to one by Dell) to ask customers,
quite simply, what do you want. There are a number of interesting metrics that we
can measure here, outlined in the slide above. You could also back up your
measurements with pre-and-post campaign polls.
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Measuring Qualitative Returns ~ Copyblogger
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Copyblogger writes very authoritatively on marketing, providing reams and
reams of free, useful content for their readers. Copyblogger earns revenue from
various marketing-related side-projects which generate revenue directly (eBooks,
pay-per-view content etc).
Their authoritative, free content brings in loyal readers and organic traffic alike,
and a percentage of these convert into paying customers for their premium
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Measuring Quantitative Returns ~ Burger King
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Burger King recently started a campaign on Facebook encouraging you to
“remove” 10 of your friends in exchange for a free burger.
It proved to be very popular until Facebook shut the campaign down, on the
grounds that purposefully removing friends was kind of detrimental to the
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Measuring Quantitative Returns ~ Dell
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Dell have done wonderful things with granularity. There are dozens of Dell twitter
accounts serving specific markets and offering unique deals - refurbished offers,
offers for home computing, offers for small businesses etc.
Tracking returns in the form of online revenue generated from an online
campaign like this is comparatively easy - technology has smoothed out some of
the problems already. A good tool to get comfortable with is the Google URL
Builder which will enable you to track campaign visitors through to your checkout
pages, as long as you are using Google Analytics.
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The Importance of Testing
The last point I would like to make is that if you are going to use social media as a
lead / sales generator (which companies above such as Copyblogger and Dell are
doing effectively) then we shouldn’t forget that simply driving engaged traffic to a
landing page doesn’t guarantee any return. That’s just half the challenge.
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The other half of the challenge is funneling the user into actioning, such as
purchasing something, signing up for a newsletter etc.
This is a delicate balancing act of making sure the user has enough information to
action, making sure the process isn’t frustrating, making sure the things they need
to click on are clearly labeled, or simply writing copy that isn’t lifeless and
When I worked at Dentsu: Avenue A Razorfish (a Japanese-American joint
venture with Japan’s largest advertising agency) the team I was part of would test
this process very granularly.
Do users respond better to green buttons or orange buttons? Do they respond
better to a “Purchase Now” or a “Buy Now” call to action? Do they click on round
things more than square things? - and so on…
...this was about the tip of the iceberg.
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We had some heavyweight “agency” tools to do this, but you can achieve similar
results with free tools. With Google’s Website Optimizer, you can test attributes
like this to an alarming degree of granularity, with the end result being a process
that functions X% better than before. A few percent might not sound like much, but
when your business is doing millions of dollars in revenue, those few percent
can be well worth testing for…
If you want to know more about metrics and testing, Dave McClure has a good
presentation entitled: Startup Metrics for Pirates
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How Peashoot Can Help
Peashoot is one of Egg Co.’s software products and it is a social media
campaign manager for the type of campaigns you’ve been reading about in this
For more information: http://peashootapp.com
Peashoot creates short URL links for your products that you can easily share and
promote across various social media channels. It then tells you information about
who clicks, how many of those clickers purchased something on your site (or your
client’s site) and also who tweets about your campaign.
Three key benefits of Peashoot relevant for readers of this report are:
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1) Measure ROI in Peashoot
Peashoot automatically tracks how many conversions and how much revenue
your social media campaigns are generating. Suddenly you’ll start thinking
differently about PPC ad programs like Adwords, when you see that with just a few
tweets a day you can increase sales or conversions on your website! Not only
that but you’ll see trends that will help you maximize your returns on campaigns
such as when is the best time to tweet, who are the most useful retweeters in your
network, and more!
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2) Goal Setting in Peashoot
Peashoot allows you to create campaigns with granular goals to give your
campaigns context and strategy. You can check your progress at any time and
Peashoot will notify you by email when your campaign goals are complete.
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3) Active Listening
With Peashoot's Active Listening technology, Twitter activity about your
campaign is plotted onto your campaign's activity graph. When your campaign
gets a spike in clicks, conversions or revenue, you'll instantly know why, and who
to engage with. With Active Listening you’ll discover like-minded tweeters who are
promoting your campaigns and generating sales for you - encourage them to get
on board with future campaigns to maximize your sales!
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Peashoot Free Trial!
You can sign up right now for a free trial of Peashoot at http://peashootapp.com. If
you’re interested in measuring ROI for yourself or for your clients and increasing
your sales on social media channels, sign up now! Free trials last for 21 days.
Thanks for Reading
Feel free to forward this document on to anyone you think will be interested. The
slides are also available online if you would like to download or re-use them:
Chief Gardener, Egg Co.
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