Social Media: Measuring Return on Engagement instead of ROI
May 24, 2011 2 Comments
David Edmundson-Bird, Director of Executive Programmes at Manchester Metropolitan University, took it a step further in his lecture about emerging trends in digital marketing, asking whether we should measure return on engagement instead of investment when it comes to tracking social media success.
To determine whether return on investment (ROI) is a useful way of measuring your social media output, you have to firstly consider what your investment is. With the majority of social networks free to use, its possible to build a presence online without spending at all. However as this infographic tries to establish, what is the real cost of social media?
The infographic was created by Focus, who host a network of business and technology experts. They split the financial investment into 4 areas: staff costs, advertising, external fees and other. Depending on your social media strategy, staff costs may be the biggest investment you make – but that’s obvious, and fairly easily established. Not hiring a specific member of staff to take on the role though doesn’t mean you are engaging for free – even if responsibility for monitoring facebook pages, user uptake and providing content for different networks is split across the team, the time it takes out of an individual’s normal role is a cost in itself.
External fees refer to taking your social media needs to an agency, another measurable cost if this is the route a company decides to take. Cost of advertising can fluctuate hugely depending on your strategy and needs – but if you use social networks to garner the attention of a specific group of people, paid for advertising may not be the most effective way forward if you want to build a real community online.
The ‘other’ category primarily concerns tracking – and that is where the debate between ROI and ROE begins. Before you spend lots of money on fancy tools to measure social media success, its essential to consider what it is that you want to achieve with social media and consequently what you want to track.
Return on Investment is familiar, while Return on Engagement seems a little… well, flimsy. What is engagement? Brandon Murphy at digital agency 22Squared suggests visiting a site, reading a blog and watching a video from a brand on youtube are all examples of engagement. Others would define it differently, saying that on twitter it could be counted as @replies and retweets, on facebook it could be a comment on a post and on linkedin it could be participation in a discussion you started.
Yet we don’t know enough yet about how people interact online, and what we have been told becomes out of date quickly. For instance on facebook, some people don’t ‘like’ a fan page but monitor it, some ‘like’ it and never actively interact while a few key mem bers may be frequent posters. It varies extensively and is dependent on the nature of the content on the page and the person viewing it.
For many businesses, numbers are a way of valuing the success of something, and regardless of whether you measure ROI or ROE you are likely to talk in terms of the quantitative. Yet if the only monthly aim for your social media strategy is to increase numbers, then you are likely to miss out on a lot more valuable in formation. That said, keep a log of your statistics and look at them regularly to see if they tell you anything – when you build a picture over time, sometimes you can find an answer to a question you were not sure how to ask.
Most importantly though, take note of anything that seems meaningful as even one micro-conversion tells you a lot more than an endless stream of (often) conflicting figures. As Richard Kent said at Internet World, social media is something you ARE, not something you DO. If you want to build human relationships with clients online, remember that if you don’t treat them as a statistic in real life you shouldn’t count their online engagement purely as a number either.