4 Social Media ROI Misconceptions

Social media ROI (return on investment) has been a hot topic for years. Unfortunately, it’s also a topic that is widely misunderstood. Whenever you find an article on social media ROI, you’re likely to be greeted by one of the following four misconceptions. Let’s take a look at them and find out why they are not always correct.

1. Social Media ROI = Followers, Fans, and Engagement

While your number of followers and fans can be an indicator of a successful social media campaign, they are not always always an indicator of whether you are getting leads and sales from social media. There are a number of reasons for this.

• Some of your Twitter followers and Facebook fans could be following you just for the valuable information you provide on your blog.
• Some of your Twitter followers may use a keyword based following automation software which means they did not actually make the decision to follow you based on interest in your business.
• Some of your Twitter followers may be bots. You can find out if you actually have real followers by using the Fake Follower Checker.
• Some of your Twitter followers and Facebook fans may be competitors researching new approaches to their own social media campaign.
• Some of your Facebook fans may be other businesses looking to market themselves on your page by interacting in hopes that your fans will click through to their page.

Similarly, engagement isn’t always a good judge of ROI. While providing great content to your audience through your blog and social media updates is an awesome way to build authority in your industry, a lot of your engagement may stem from people who share those blogs posts and updates with their followers. Using the various social media tools out there is a good way to see if you're getting the right kind of engagement.

If you employ tactics that are designed to increase engagement such as asking random questions, you may be getting engagement that doesn’t necessarily relate to your business. While the engagement you receive may result in leads and conversions, it is not always guaranteed.

The only way engagement can be counted as ROI is if you can calculate an average monetary amount per engagement. SumAll released this study that showed how much a Like on Facebook was worth. For different businesses using different social strategies, that amount may vary.

2. Social Media ROI Cannot Be Measured

This is probably the biggest misconception when it comes to social media ROI. One way you can measure social media ROI is by setting up your Google Analytics to measure goals. Then you can see whether social media referral traffic is bringing visitors to your website that make a conversion such as submitting a lead form or purchasing a product. Of course, then there’s the flipside...

3. Social Media ROI Can Be Completely Measured

Thanks to browser privacy features that allow Internet users to decide whether to allow websites to track them using cookies (like Google Analytics does), you can’t guarantee that every visitor to your website will be included in your analytics data. This means that a lot of leads and sales that could have been attributed to social media may not be.

4. Social Media ROI is Always Direct

Last, but not least, social media may not directly result in a conversion. Let’s say that someone goes and likes your Facebook page today and maybe comments on a few of your wall posts. Over the course of the next month, they see your status updates in their newsfeed and comment / like them. Then they decide to purchase something from your business, but instead of going to Facebook and clicking through to your website, they Google your business name and go to it from search results.

Google Analytics, and just about any other analytics program, will show the conversion came from a Google search of your business name.

Now let’s say your business holds a Facebook contest this month and next month, you have a lot of sales from new customers, but those customers come from emails you sent about the contest or from typing in your URL directly into their browser’s address bar. How do you link that back to Facebook?

This is where SumAll comes in. You can put your Facebook Insights data next to your Google Analytics or, if you’re using platforms like Shopify, Paypal, etc., you can put your insights next to your sales and income data to see the spikes in social traffic followed by spikes in sales.

Here, you can see a spike in social media engagement followed by a spike in sales the next day. It goes to show that the things you do on social media may not have immediate results, but instead have long lasting benefits for your bottom line.

To see what affect your social media activity has on your bottom line, be sure to sign up for SumAll and plug in your data today – for free! 

Kristi Hines is a freelance writer, professional blogger, and social media enthusiast. You can follow her on Twitter and Google+.