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Social Media: Changing the Rules for ROI

“When a new medium borrows from an existing one, some of what it borrows makes sense, but much of the borrowing is thoughtless, “ritual”, and often constrains the new medium. Over time, the new medium develops its own conventions, throwing off existing conventions that don’t make sense.”

– John Allsopp, founder of the Web Standards Project

Back in 2000, Allsopp (@johnallsopp) noted a tension between the web as we know it, and the web as it would be.  The web at that time was heavily influenced by print, as designers and builders had little other frame of reference. Those attempting to measure the value of the internet were using Nielsen-like ratings held over from TV. It’s all they knew.

Many marketers and business people find themselves in a similar conundrum when evaluating social media performance. Social media challenges long held traditions about ROI from online media. Advertisers, publishers, agencies, investors and even social networks themselves desperately want to measure social media using the “tried and true” methods and metrics for ROI. The problem is that many traditional measurements miss out on the true value of social media and, worse, can lead to the false impression that social media is not a valuable marketing channel.

Evaluating social media based on metrics designed to measure, for instance, search advertising can be problematic. Users on a search results page are in “target acquisition mode”—they are looking for the most direct route between where they are and what they want. If your ad represents a good chance that their heart’s desire is a click away, they are all over it. They click or tap on the ad and this action is easily measureable, its value is quickly quantifiable.

The social consumer does not play by the same rules. Social media blurs the lines between how people interact with friends and how they interact with brands. This changes the rules for selling and requires adapting both your methods of customer interaction and how you measure success.

Social consumers have different sets of expectations and exhibit different behaviors on social channels than they do when they are elsewhere on the web. Social consumers want to learn about your brand and expect you to learn about them. They expect a conversation. They gravitate to social channels to hang out, to catch up, to share, to waste time, to celebrate, to rant. This is not a shopping mindset, and as such they are exceptionally resistant to overt sales pitches while in social channels.

Thus, measuring direct sales from social media alone, while seemingly expedient, can be a false ROI indicator. A broader, more inclusive approach to social media measurement will uncover dimensions of ROI that may have previously been ignored. Here are a few additional ways to measure social media ROI that may add dimension to your current calculations:

1) Social Traffic versus Display Traffic

  • How much would this traffic level cost if you generated it via paid display advertising?
    This can help you optimize hard spends (ads) versus soft spends (content and customer interaction)

2) Visitor Quality

  • How do your social visitors perform against key performance indicators (KPIs) compared to their non-social ones?
  • How much do your social visitors spend versus non-social counterparts?
  • What other actions do your social visitors perform (beyond purchase)?
    This dimension lets you begin to get a handle on the lifetime value of a social consumer.

3) Revenue via Social Conversions

  • How many purchase decisions are influenced at some point by social media?
  • Does social media assist in conversions along the way?
    A visit from a social referral may result in a conversion immediately (Last Interaction Social Conversions) or it may influence a conversion that occurs later on (Assisted Social Conversions).Comparing the two is essential to understanding the role that social plays in business outcomes.

4) Channel Quality

  • Which social channels result in highest performing customers/conversions?
  • How do social consumers prefer to engage with you?
  • Do visitors from one social channel perform better than another?
    This metric helps optimize which social media channels you pay most attention to.

5) Content Quality

  • What types of content do your social consumers respond to?
  • Do your social customers value your content enough to share it?
    By tagging your social media posts by “function” (i.e. direct sales, informative, conversational, customer service, brand building) you can identify those types of content that optimally drive results against your KPIs.

The methods mentioned above acknowledge that social media is breeding a consumer culture of peer-oriented relationships. They recognize that social interactions are non-linear while most measurement tools attempt to draw linear relationships. Ultimately, they may help you realize previously unforeseen value from your social media endeavors.

If you’d like to learn more about Social Media marketing and strategy, follow us on twitter @trellist or connect with us via

About Trellist

Trellist is a professional services firm delivering performance-driven business solutions that are flexible, innovative, and optimized to maximize efficiency and return. The firm consults on, and integrates, data with marketing, design, technology, and digital services for clients at the global, national, and regional level. Trellist utilizes a unique approach to business—from the firm's employee-shared structure, to how it partners with its clients. 


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