Everyone talks about social media being a powerful marketing tactic, but without metrics proving ROI how can we be sure?
As a starting point the following 4 Key Performance Indicators or KPI should be closely monitored during the early stages of your social media campaign or web application launch for your best shot at success. The 4 areas are; User Engagement, Time on Site, Volume of New Content and Sponsorship ROI. There are separate reasons for each of these key metrics. They can be described as follows;
User Engagement – How many visitors to the site are actively gauged with an account and contributing content? To get the boat moving on this daunting hurdle, I recommend invitations be extended to “active” social networkers who show a particular affinity to your specific social media campaign or application. Since these “power users” will be responsible for the majority of the activity early on in the site’s life (thereby populating News Feeds and keeping the appearance of the site’s content fresh), it will be important to engage them in a two-way conversation directly from management. i.e. the Community Manager.
Time on Site / Pageviews– This is an important statistic that varies widely across the competition. There are often benchmarks available for your industry (which can be found in google analytics). 10 pages per visit for example translates to roughly 4 minutes on the site per visit. Upon launch of your site or campaign you should be pleased to see 50% of the set benchmarks (i.e. 5 pages per visit and 2 minutes on average per visit). The expectation will be that these numbers can be doubled by Version 2.0 of the site once more community and networking features can be introduced.
Volume of Content – Because social media puts the power of adding content, a post, a video or an event in the hands of any individual user, you should intend to closely monitor the number of, and speed with which new content is created. This will be an important determinant in deciding how much research effort to allocate when breaking into a new geography or market segment for your social media activity. For example, if you launch in City A and it takes roughly 30 days to make it to 100% thanks to user contributions, then in future cases you can launch in a new city with fewer listings under the assumption that completing the list will be done quickly thanks to our users.
Sponsorship ROI – This metric is unique in that it depends largely on the number of pageviews by your users. That being said, I believe that a higher CPM rate is acceptable based on the premise that all advertisements will be contextually relevant to the user base. In Version 1.0 of your social media site you should seek to migrate current sponsors on your competitor’s sites for free or for a very low price, but expect to watch the impressions in order to attain a growing CPM price. Surprisingly, niche sites can demand significantly higher CPM rates than larger web sites. This may be due to better targeting smaller niche markets that advertisers consider more valuable.
