16 Jun 2012

Measuring Social Media's Impact on Revenue

Via practicale commerce 
You can explore the impact of social media on your site’s revenue using data that is already available to you. None of this data is perfect, and none of it is comprehensive. But when used together, the data can inform how and where you invest.

Organic vs. Campaign-Driven Social Media

There are two distinct ways that social media can impact your business.
  • Organic impact. Depending on your target customers and the products you sell, consumers will talk about your brand and link to your site. Enabling social plugins — i.e., Facebook Like button, Twitter Tweet button, Google+ button — on your product pages can facilitate organic sharing. Users will also simply copy and paste URLs and link to your home page or your blog posts in their online conversations. These conversations can raise the awareness of your site, impact attitudes and perceptions of your brand, and sometimes directly drive click-throughs and conversions.
  • Campaign-driven impact The other way social media can impact your business is through specific social media campaigns. These include offers that are promoted through your own social media properties, but also include social media advertising that promotes your site, your products, or specific offers.
Keep these two different aspects of social media in mind as you analyze social media as a traffic and revenue driver.
This article focuses primarily on the organic impact of social media. The campaign-driven impact should be managed like any other campaign that drives traffic to your site: Include tracking tags in each link you control, and assess the performance of each campaign using that data.

Social Media's Organic Referral Traffic

The most directly measurable organic impact of social media is when an order can be traced back to a click-through from a social media site. These conversions occur on two levels.
  1. Last interaction conversion. A visitor clicks through on a link that is posted in social media and, while on your site during that visit, he or she places an order. In Google Analytics terms, this is a “Last Interaction Conversion.”
  2. Assisted conversion. A visitor clicks through on a link that is posted in social media and does not immediately place an order. At some point, however, the visitor returns to the site through some other means — such as a Google or Bing search, or by typing in the URL of the site — and then makes a purchase. In Google Analytics terms, this is an “Assisted Conversion.”
In both of these scenarios, social media had some impact on the visitor’s purchase. In many cases, though, other channels also influenced the visitor’s ultimate decision to visit the site and place an order. Focusing on precisely attributing which channel contributed what is a good way to develop a headache, and to spend hours with no actionable result.

However, assessing how much traffic and how many orders involved a social media click-through — as well as how these change over time as you proactively engage with social media — is a worthwhile exercise.

Google Analytics has a number of features and new reports that can help with this assessment. Start by looking at visits from social networks. Remember, if little traffic is coming from social media, then, by definition, there will be very few related conversions.

The "Traffic Sources » Social » Sources" report provides this data.

A simple listing of where your social traffic comes from is a good place to start.

A simple listing of where your social traffic comes from is a good place to start.
Use this report to identify links that are generating traffic. Consider visiting those social networks, searching for conversations about your brand and potentially assisting or engaging in the dialog.

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