Marketing executives around the world are constantly being asked to support (or defend) their investments into various marketing activities. Return on Investment is the universal metric, yet seems like a daunting task for today’s marketers.
What is ROI?
While difficult, measuring public relations and social media ROI isn’t impossible. It’s the same time-tested formula for calculating ROI on any marketing activity—the difference between total sales generated and cost to complete the activity, divided by the cost of the activity. It’s expressed as a multiple, with one (1) equating to a break-even point.
What’s Different about Social Media and Public Relations?
If we segment all marketing activities into three categories—paid media, owned media and earned media—then social media/PR falls into the earned category. The most obvious difference between earned media and other marketing activities is the ongoing maintenance to keep them fueled. Social media and public relations require constant input, action and reaction. It requires flexibility. Most of all, earned media requires time to build relationships.
What’s the Best Way to Isolate Social Media/PR Activity?
There are four critical factors involved in measuring social media and public relations ROI, and it’s of utmost importance that these are evaluated in silos as to not over-influence the role they played in ROI.
- Establish a Baseline for Growth: It’s important to understand what impact existing marketing activities have on sales. Historical results may be your best source for this type of information. As none of these activities will go on hold, it’s important that their results aren’t confused with PR/SM concurrent activities. Furthermore, effects of activities such as seasonality, coupons or promotions should also be noted (time of launch, time in market and success) as they relate to sales and web traffic.
- Take a Temperature Check of the Sentiment: Almost every social monitoring tool available offers a way to measure sentiment. Take some time to understand what that sentiment is and quantify it. Sentiment is amplification to other marketing activities.
- Arm your SM/PR Teams: It’s not enough to have your SM/PR teams amplify the messages in the marketplace. They need to be tracked. By providing each activity with its own distinct URL or landing page, you’ll make it infinitely easier to measure success post-activity.
- Keep an Activity Log: A content calendar is a planning tool to integrate PR/SM with marketing activities. An activity log is a diary, noting environmental stimulus that occurs on top of planned content. It will ensure no activity is forgotten in the ROI calculation.
The last step in calculating the ROI of SM/PR is simply to overlay the baseline activity, the activity log and the sentiment numbers to isolate any changes that appear above/beyond business as usual. If you’ve done your homework correctly, this sales number can be attributed to SM/PR activity.
Lastly, don’t be discouraged if your ROI is low, or even negative, at the start of the programs. As we stated above, earned media takes time to build relationships.