Let us first start with the formula for return on
Investment.
ROI= Return- Investment / Investment
To measure return we need to make sure that we are we
measuring. Now on how to calculate it, the following approach can be
propagated.
Step One: Choose the goal – Some of the broad goals can be
categorized below:
1.
Increasing brand awareness
2.
Increasing sales or other conversions
3.
Increasing
traffic
Some of the sample goals to be set for effective tracking
pertaining to conversion are given below:
(i)
Recruiting new followers or capturing more fans.
(ii)
Registering on the site, subscribing for
newsletters
(iii)
Asking queries or downloads of the target item.
(iv)
Online purchase
Step Two: Tracking your goal – The above goals require associated
metrics to be tracked. The above three campaigns warrant tracking of different
measures which are listed below:
Campaign Type
|
Measure to be tracked
|
Campaign One – Brand Awareness
|
Impressions, Engagement, Reach ,Frequency
|
Campaign Two – Conversions
|
Conversions, Destination URL
|
Campaign Three – Increasing Traffic
|
Clicks, Keyword Performance, Clickthrough Rate
|
Google Analytics can be effectively used for setting goals
and event tracking. The social media interactions (shares, likes, follows) can
be tracked well using Facebook page insights.
Step Three: Assigning a monetary value
There are four major ways to assign a monetary value to help
generate numbers and calculate ROI.
(i)
Customer Lifetime Value: This metric helps in estimating the average
earning from a customer.
(ii)
Customer Lifetime Value * Conversion Rate: This metric helps in tracking the worth of
each potential visit.
(iii)
Average Sale: This metric helps in tracking what is the
average purchase through the web-portal or mobile platform
(iv)
Pay-per-click Costs: This metric can also be
used to calculate opportunity cost or we can also track that how much would the
firm/individual would end up paying if conventional advertisements to achieve
the social media actions
~Submitted By
Vivaswan Pathak (PGP-14-155)
No comments:
Post a Comment