Sexy Numbers: Measuring ROI in Social Media Campaigns

Unless they are prefaced by dollar signs, numbers are not sexy, which is why social media experts have spent years avoiding them. Like the cool kids, they often seem more interested in being invited to the party than delving into what the party is for. The argument is often that numbers and metrics only serve as distractions to engagement and dialogue.

As a model matures in order for it to maintain a business role, make no mistake social media is about business, its impact needs to be quantifiable. Forrester Research estimates that social media will make up 3 percent of overall interactive marketing spend in the US in 2010 with the highest delta of growth in any channel over the next four years. As social media’s channel grows so will the pressure to quantify.


Brian Solis, author and principal of the FurtureWorks agency, recently posted a well written piece about the Maturation of Social Media ROI on Mashable. In it he tackles the main crux behind the issue that many CMOs are spending against social media without being able to quantify a return on those efforts. Brian believes this is:

“A direct result of not tying activity to an end game, the ability to know what it is we want to measure before we engage. Doing so, allows us to define a strategy and a tactical plan to support activity that helps us reach our goals and objectives.”

Warm and Fuzzy Metrics

It used to be that simply being invited to or crashing the social media party was enough. Companies hired interns to catalog content and rushed to create Facebook Fan Pages and Twitter accounts, often because everyone else was doing it.

Then came what I like to call “warm and fuzzy metrics”. Words like engagement, participation, and involvement became key terms for defining online interactions with consumers. Similar to views in CPM, these terms are measured in volume of followers or retweets. Influencers sprouted from this tactic as a way to amplify that volume; after all you wanted to have the best DJ at your party.

Then came terms like trust and affinity; these were less fuzzy in nature and involved a brand’s core group of followers.

Of the warm and fuzzy metrics of social media ROI, only customer service is tangible. Both in terms of the increased ability for people to rate and review products, as well as the opportunity for customer service teams to engage and provide proactive response.

If your company is just participating in social media than maybe the fuzzy metrics are enough. If your company is running social media campaigns and considers social media a marketing channel than fuzzy metrics are a great way to get your budget slashed. It is no coincidence that, according to MarketingSherpa, inability to measure ROI, lack of budget funding, and management resistance are barriers to companies implementing social media campaigns:


For those who insist that “marketing is not sales”, I invite you to use that exact statement with your CMO and see how quickly your budget is diverted elsewhere. As David Vellante, co-founder of ITCentrix, Barometrix, and The Wikibon Project, cautions:

“I’ve seen multimillion-dollar print and television advertising initiatives get the green light because CMOs understood the media — and I’ve seen $10,000 social-media efforts scratched because execs didn’t get it.”

The Key is Return on Ad Spend

ROAS (Return on Ad Spend) is what many CMOs will look at when considering budget allocation against a marketing channel. By definition it has a tighter set of parameters than ROI because it doesn’t consider less fuzzy elements like branding or engagement. This metric for success is specifically looking for a direct dollar value generated as compared to the actual budget being spent.

If, as a study by Bazaarvoice indicates, 80 percent of CMOs expect upwards of 5 percent of their revenue to come through the social media channel then the spend against generating revenue better be tracked.

According to Fast Company, Dell made over $3 million in revenue through the Dell Outlet account on Twitter.  But, considering much of what happens in Dell’s Twitter account is coupon or offer driven, what was the true ROAS of hitting that $3 million? Never mind the additional cost of coordinating social media tactics and messaging within a company as big as Dell which, as Lionel Menchaca, Chief Blogger for Dell Inc says is challenging, “Executing against all those [social media] strategies will take a lot more effort and collaboration between many departments within the company.”

More telling is a recent report by Omniture on the impact of a social media campaign for National Geographic. While the campaign was seen as a success, in the report the Omniture analyst states that traffic from social media is 20x less likely to purchase than average visitor.

Laying the Foundation

What rings true for Dell is true for both large and small business interested in participating in social media.  Collaboration between all stakeholders is necessary in order for a campaign to reach its potential.  Here are the steps you need to take to lay a proper foundation for launch.

  1. Know Your End Game: As Brian Solis said defining your end game is necessary in order to be able to quantify results.  Know what are you trying to accomplish and how you want to try keep track of it all.
  2. Define Your Metrics: What metrics do you need to track to quantify results: Leads, Registration, Sales?
  3. Check Your Tracking: I can’t tell you how often a new client doesn’t have the right pixel/cookie set on the right confirmation page. If your success metric is sales make sure you’re not just tracking leads. This requires testing.
  4. Set Expectations: Benchmarking is great way for you and your CMO to have realistic expectations from a campaign. Fireclick and Coremetrics are two tools that can provide benchmarks based on industry averages related to conversion rates, cart abandonment, and other valuable data. They also allow you to pull data from a specific vertical.

Intelligence Gathering

This is where you gather the numbers that will let you know how your campaign is doing and where the dollars are. There are a lot of tools out there that will provide pretty dashboards but few that provide useful data. Here are some of the tools I recommend:

  1. Google Analytics: Google Analytics is the defacto analytics system in most companies. You can track visits, page views, bounce rates, etc. Be sure, if sales are a key metric, that the ecommerce portion is activated.
  2. Hitwise: Owned by Experian, Hitwise relies on ISP data of approximately 10 million users in the United States alone. Although an expensive solution, their Clickstream data provides some of the best intelligence on upstream and downstream traffic to your website.
  3. Coremetrics: Along with their benchmarking services Coremetrics offers an analytics suite whose main differentiator rests in what they call their LIVE (Lifetime Individual Visitor Experience) Profiles. This is essentially an analytics expansion on the concept of customer types.
  4. Fireclick: Owned by Digital River, is a streamlined version of many of the tools available for free through Google Analytics but in an easier to customize interface. The main advantage here is their Advanced Marketing Suite which ties you into other vendors and components in the Digital River portfolio.
  5. Radian6: Radian6 is a buzz monitoring software that allows you to monitor certain keyword sets and capture data round them. The data includes such things sentiment, engagement, reach, and inbound links. It also allows you to port that data to your CRM.
  6. HubSpot: In some ways HubSpot is more of a site optimization tool than an analytics tool. It does compile interesting sets of data around competitors and around reach as well as lead identification tools.
  7. Omniture: I have a love/hate relationship with Omniture. Used correctly, with sufficient internal technical resources as well as buy-off from the marketing team on consistent use of campaign hierarchy, SiteCatalyst along with the other Omniture, is an amazing if overly complicated resource. It is however a very expensive one and there is a reason that Omniture holds yearly conferences on how to use their product.  They have a great Facebook app measuring toolset.

Making Sense of it All

Having the tools to capture the data you need is great but numbers are of little value if they are not actionable.  Here are some guidelines to avoid drowning in the data:

  1. What to Do When the Numbers Don’t Match: First of all get the notion of the numbers matching out of your head. The numbers between two analytics systems will rarely, if ever, produce an exact match. The objective is to look for trends in the data and ignore anomalies that are not statistically relevant. If the data matches within 10 percent or less variable then consider the data to be inline. If the variant is 11 percent-49 percent then it might be worth doing some due diligence. For instance are all the pages that should be tagged, tagged correctly? If the variant is greater than 50 percent then something is wrong with the setup itself or with one of the systems you are
  2. Spotting Trends is Vital:One of the most common mistakes I see is when business get excited about high sales numbers while completely ignoring the fact they overspent to get those numbers. Sales matter little if ROAS is in the negative. Trends are a great way to spot deltas which often provide indicators of the health of campaign. Sample key trends are:
    1. number of new to file customers
    2. number of transactions
    3. changes in repeat customers
    4. number of customer referrals
    5. uplift in other marketing channels
  3. Looks for Wildcards and Outliers: Sometimes you are so focused on the campaign data that you become blind to important clues. My favorite personal example of this was during the measurement of a campaign that Jones Soda ran with I Can Has Cheezburger in 2008. If you looked just at the number of sales that directly came from the I Can Has Cheezburger website the campaign numbers barely broke even.  However, when we looked closer at the analytics data we saw 12,000 additional posts created because of the campaign. When attributable sales from those posts were factored in sales showed 172 percent month-over-month growth and 42 percent year-over-year growth! With the amount of distribution sources available in social media always take time to see if elements of your campaign have been distributed beyond the initial sites you targeted. It will allow you to spot new opportunities to expand your campaigns.
  4. Cross-channel Cannibalization and the Last Cookie in Debate: Most advertisers use cookies to know which ad network to pay and which marketing channel to credit for sales. Shannon Paul, community manager for PEAK6 Online and OptionsNewsNetwork, had a great post on this debate here. Cross-channel cannibalization is when the marketing costs/efforts of one marketing channel are not considered because a different marketing channel is being given credit for them. This impacts both budget allocation and proper allocation of costs. Since social media buzz often serves to uplift other marketing efforts they are most impacted by improper allocation.For example, a social media click originating from a Twitter focused campaign refers a customer to the site but a coupon affiliate closes the sale by providing a coupon to the customer. In a “last cookie in” system only the affiliate in this example would get credit for the sale. In an ideal world both the first and last referrer of a customer would be cookied so that you would know which channel is referring new customers and which is closing them, thus properly giving credit to both channels and minimizing cannibalization. Awareness of the complexities of tracking multi-channel efforts is key in order to properly coordinate award of credit to all involved channels.

Final Thoughts

If you are managing a social media campaign or are a business eager to launch into social media, remember to embrace the numbers. Numbers are sexy. They help spot costs and inefficiencies you could avoid; help identify opportunities you could be missing; and often determine which budgets will be renewed.   The dollar signs are there, you just have to know where to look.

About Angel Djambazov

Born in Bulgaria, Angel Djambazov has spent his professional career in the fields of journalism and online marketing. In his journalistic career he worked as an editor on several newspapers and was the founding Editor-in-Chief of Wyoming Homes and Living Magazine. Later his career path led to online marketing where while working at OnlineShoes he earned the Affiliate Manager of the Year (2006) award at the Affiliate Summit, and In-house Manager of the Year (2006) award by ABestWeb.

For four years Angel served as OPM for Jones Soda for which he won his second Affiliate Manger of the Year (2009) award at Affiliate Summit.

Currently Angel serves as OPM for KEEN Footwear and His former clients include: Dell, Real Networks, Jones Soda, Intelius, Graphicly, Chrome Bags,, Vitamin Angels, The Safecig, and Bag Borrow or Steal.

Angel is the Editor-in-Chief and Co-Publisher for and

Angel lives north of Seattle, spending his free time reading up on obscure scientific references made by his wife MGX, while keeping up with a horde of cats and a library of books.

You can find Angel on Twitter @djambazov.

20 Responses to Sexy Numbers: Measuring ROI in Social Media Campaigns

  1. Hello Angel,

    Read through your article and found it comprehensive and nicely executed.

    thank you for sharing.


  2. And *this* is why I am so in awe of you whenever it comes to talking actual "how to" rather than the 'view from the rainbow in outer space' that so many people like to rave on about in the hallways at conferences my friend.

    Not only added to my "link it rather than rewrite it" bookmarks, but put at the top under "No Soft & Fuzzy Metrics."

    Thanks Angel!!!

  3. Hi Bill,

    True, ROAS in traditional media is far from bulletproof. But you might be surprised how fast companies are adopting new technology that allows for very specific tracking offline. ImpactRadius, which just recently launched, is just one company that can provide the type of metrics we associate solely with online media to offline campaigns. Fairly soon everything will be "interactive".

    As for your question about benchmarking. Coremetrics does provide a decent vertical specific data.

  4. Cindy Lavoie says:

    Very helpful article. We do tracking and analysis of PPC and SEO campaigns and are just getting into Social Media metrics. Radian6 is a great tool for “peering in” and seeing what’s being said about your company. But Google Analytics, while great for PPC and SEO, is harder to use to measure social media success, as it’s tougher to map tightly between participation in social media and resulting impact on traffic, conversions, etc. I appreciate your comments on how to “look closer” and spot trends, outliers, etc. Social media metrics takes a more creative approach to analyzing the numbers.

  5. Thank you for the compliments Lu,

    I must confess that I will always have a softspot for "outer space rainbows". It's a very Gonzo from the Muppets image. 🙂

    The warm and fuzzy metrics were simply a function of the newness of it all. With everyone rushing to adopt social media, it was easy as Chris Brogan would say gather and sing kumbaya. In many ways the fuzzy metrics remind me of traditional media, and personally I believe that is why it's been so readily adopted by those used to marketing in traditional channels. But as social media evolves the marketing component will be asked to provide real metrics. The data is there and businesses want it.

    Olivier Blanchard, has a very funny and witty Slideshare on just this topic:

  6. bill palmer says:

    this really is the key question for internet marketing initiatives. as you point out though, clarity and executive education/ buy-in to this process just as critical as the tools and #s themselves. Last I checked, Return on Advertising Spend for TV and outdoor weren’t exactly bulletproof metrics. At least with online marketing, the buyer behavior and referral sources and more transparent. Would love to see more benchmark and standardization in social media metrics so that companies know how they stack up relative to competition.

  7. Katie Morse says:

    Hi and thanks for including Radian6 in your list of tools! Much like Lucretia, I've bookmarked this one for future reference. Ultimately, the key to what metrics a company tracks is decided by their goals for being in social media.


    Katie Morse

    Community Manager | Radian6


  8. Jim Kukral says:

    This is one of those blog posts that is a perfect example of top-quality thinking from people like Angel. It's so good it's B.A.D. Like the Michael Jackson BAD. 🙂

  9. Brian Crouch says:

    Great article! Wondering what your thoughts are in measurement of ROAS in relation to the SEO value of a social media campaign (if executed with that in mind)? If a PPC campaign budget can be reduced thanks to better organic search presence, that of course should factor into ROI… not to mention the PR/ reputation protection that a dynamic social presence can provide.

  10. Thanks Brian,

    I think that while a social media campaign can provide SEO value it is more of an ancillary and residual benefit to branding, engagement or campaign focused efforts. This is not to say that it can't improve overall marketing ROI, but the fact that in your example you are looking at reducing PPC spend budget is to me more of an example channel cannibalization. From the SEM side it would be very easy to argue why PPC budget should be increased to maximize DR benefits from social media efforts. Ultimately, in a healthy strategy, marketing channels should work in sync.

  11. Bhavneet Sekhon says:

    Hi Angel,

    These are very helpful insights. As a medium sized-tech company we are always struggling with prioritizing between different marketing channels to reach out to our target audience within the budgetary constraints – and such metrics are always very helpful! We recently initiated a social media marketing campaign for brand awareness, and hope to measure and capitalize the results for demand generation activities. Any ideas / thoughts?


  12. Hi Bhavneet,

    Used properly social media is an excellent branding tool. My main note of caution is that since true engagement is key to success in such a campaign, not to use the "push method" popular in most traditional PR practices. Attempts to force awareness of you brand onto your target audience often drives them away.

    The best type of engagement when you are trying to build awareness is something interactive. For example, I know of an outdoor snow sports manufacturer whose high-end product did not meet sales expectations because its retail partners did not properly upsell the benefits. So they launched a social campaign focused on the sales folks that worked the show floor of their retail partners. The campaign included educational online games and contests that essentially served as a training tool.

    What I liked about this in particular campaign is that while the retail partners where made aware of the campaign participation was optional, yet the manufacturer did an excellent job of providing personalized individual incentives to participate. The end result was that the majority of their target audience participated and sales increased because the sales folks not only could articulate why the product's price tag was worth the extra money, but they themselves had become advocates of the brand.

  13. Robin Low says:

    Great information.

    ROI seemed very fuzzy for many companies, and the list that you have on this blog is pretty comprehensive and informative.

    Thanks for the information.

    Robin Low

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  16. Angel –

    I finally got around to looking hard at the Forrester table in your article on sexy numbers. What they show is that even though the CAGR for Search Marketing is relatively timid the projected gross dollar increase in Search Marketing spending is greater, by $4 billion ($18b vs $14b), than the projected gross dollar increase in all other forms of interactive marketing combined.

    Social Media expected spend is $2.5 b, a big number, but CMO's can and should be paying more attention to Search than anything else in that list. As the man said, "follow the money."

    Projections of this sort are notoriously unreliable. IF we make the switch to being able to track returns on Social Media efforts, likely through ROAS as you suggest, and if those numbers are positive, then Social Media spend will take off and Forrester will have to reprint.

    Doug Brockway

    ps – good article.

  17. Jennifer says:

    Interesting post! After all social media marketing is a very powerful tool.

    David Plouffe’s, (President Barack Obama’s point man on social media) innovative strategy not only got Obama elected but also managed to raise the largest amount of campaign funding in election history.

    At the IMD OWP 2010, David Plouffe will share his insights on the historic Obama campaign while framing it in the context of how Obama's leadership is shaping the United States and the world today. Weaving in his own experience managing and leading the campaign that propelled Obama into the White House, Plouffe will share: the stories behind the campaign and current strategic issues facing the administration; the importance of strategy in managing campaigns, public policy initiatives and crises; how Obama is still garnering support from the movement created during the campaign.

  18. […] to leverage their social media presence into revenue generated. How is that quantified? I see that money is being spent on ads and that consumers are responding to these ads by purchasing goods and services in return, but is […]

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