Social Media ROI Through Retargeting

Social Media as a word of mouth marketing channel continues to prove its value in terms of reported customer behavior and it remains a top priority for many marketers in 2010. But along with the broadly accepted belief that social media and word of mouth are effective, comes the question of ROI and how to measure it. Most often the answer to Social Media ROI comes in the form of metrics with undefined value, for example: number of Facebook fans & twitter followers, site traffic, conversation index, customer insight, etc. All of which are very valid and valuable returns from an investment in Social Media, but all of which fail to get to the definitive point – how much money is being made by the Social Media/word of mouth effort? The irony is that the digital space offers more revenue data than any other marketing channel, and in fact, measuring Social Media ROI in revenue terms can be easier than it seems. Here’s one way we do it – Social Media Retargeting.

Many marketers employ a “hub and spoke” model of Social Media engagement, placing one primary social platform (hub) at the center of their effort and then using complimentary channels (spokes) to syndicate the content and engage incremental audiences and communities. Ideally these points of engagement are drawing people to interact and, in some way, convert. Both the hub and the spokes become channels to initiate user tracking, such as adserving tags, to measure the users’ engagement and ultimately their conversion.

Practically speaking, imagine a company blog that is used as a customer service channel and SEO portal. As users arrive at that blog they can easily be tagged and tracked through to conversion. We’ve found with many of our clients that customers originating in these channels convert at a much higher rate and spend substantially more money – proving that social media channels can deliver higher quality customers – an important consideration in calculating ROI.

Further, point of engagement and tracking methodology can be paired with the media tactic of re-targeting. As the diagram below shows, users who engage with a company through social channels, thus qualifying them as a potential customer, can be reached with display advertising as they go about their daily web use and cross properties represented in an Ad Network.

Social Media Retargeting

When a marketer implements this model of Social Media retargeting, Social Media demonstrates its revenue ROI immediately in two ways. Users form social channels who enter into the purchase funnel without seeing a retargeted ad will be measured as a conversion (with corresponding revenue data) sourced directly from the social channel – represented above by the dotted line. Alternatively, a user who leaves the social channel and later engaged with a social media retargeting ad, will be tracked as having had that compound influence of social media and display advertising – all correlated with definitive revenue value. From there the ROI calculation of investment in Social Media, Social Media retargeting and corresponding revenue, is relatively straightforward.


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