The return on investment (ROI) of social media has been a hot topic for a number of years and it’s still a gray area that is not well understood for most companies. This is partly because most companies don’t spend enough time to clearly understand what their social media objectives are and, consequently, what metrics they should be measuring.
cost/value image via shutterstock
For the real estate industry, there are two key metrics that are relevant and quantifiable for most companies. Whether you are a large organization or a one-man brokerage, your social media efforts can provide you two essential outputs: brand visibility and leads.
So how do you measure this and apply a numerical valuation?
Whether you’re actively marketing your brand in Facebook, Twitter or other social networks, the visibility you generate for your brand has media value. To determine this value, you need to first track the number of impressions you generate for your brand on a monthly basis. For Facebook, you can use Insights to extract this, and for Twitter there are third–party tools that can help you measure potential impressions.
Based on the impressions you are generating on a monthly basis, you can then apply a CPM (cost per thousand impressions) rate using the market-rate equivalent of what it would cost you to buy Facebook ads. So let’s say you are generating 500,000 impressions a month in Facebook and if we apply a 30-cent CPM (average rate of FB ads currently), the media value of your Facebook activity for that month would be $150.
You can also apply this to the pages of your website/blog that include the “like” button and measure the media value of your content each month.
This is more obvious and if you are not yet tracking potential leads generated from social media channels, then now is the time to start. In order to apply a numerical value on your lead generation activity, you need to first define how much a lead is worth to you. This is essential and I mentioned how to do this in my previous post.
Next (assuming you are running Google Analytics), you can track the traffic and leads that are coming to your website from social media channels. There are a number of ways to do this, including custom segments for your social traffic or applying custom parameters to your links (a bit more advanced) using tools like HootSuite‘s URL shortener.
Once you can effectively segment and track your social traffic, you can then create goals in Analytics to determine the number of leads (conversions) generated every month and place a concrete value on your social media activity in terms of transactional value.