Understanding social media’s “ROI problem”
Can you name a travel brand that doesn’t have a social media presence?
How about this one: can you name a travel brand that makes money from its social media presence?
Recent research from ASTA found that while 80% of sampled travel agents are active on social media, the actual revenue or return on investment (ROI) it generates is negligible for the vast majority.[ref]2013 Technology & Web Usage Report: ASTA; March 2013[/ref]
This isn’t new – we know the role of social media within the digital marketing mix has long been fraught with awkward questions around ROI and its real impact on the bottom line.
The fundamental problem is one of user intent. People generally spend time on social media to interact with friends and enjoy their downtime. The content that social media users engage with is entertaining, informative or inspirational.
They don’t like to be interrupted by intrusive marketing and they don’t respond so well to sales-focused or overtly commercial messages, apart from the rare circumstances that they’re either particularly creative or an exceptionally compelling offer or discount.
Freak viral successes and margin-destroying discounts aside, is it really the case that social media is a waste of time for travel brands, or is something else going on beneath the surface?
To answer that question we need to take a closer look at what “social media” actually is, to open up the black box and understand how social media as a channel interacts and works within wider digital strategy.
Unpacking social media’s ROI problem
When considered independently as a standalone channel, social media’s performance is often unimpressive – particularly when evaluated by the most important bottom line metrics: leads, bookings and revenue. Traffic generated by social media simply doesn’t convert into leads as well as from other sources:But a big part of social media’s ROI problem has been our ability to understand the true nature of these conversions and to attribute their source accurately. Even if social media traffic doesn’t send many direct leads itself, is that audience engagement contributing to conversions in other ways?
Until relatively recently it was difficult to evaluate how different digital channels interacted with each other to contribute to conversions. When tracking goals and conversions, standard web analytics tools like Google Analytics could only report on the the last source of each click prior to the conversion.
This method of goal tracking is called “last touch attribution,” it ignores any interactions the visitor had with your website prior to the final click and conversion, and it attributes the entire goal to the visitor’s very last interaction. This model heavily favours the more direct lead generating channels towards the bottom of the funnel, such as organic and paid search:It’s easy to see how this could be problematic for travel brands. Consumers frequently don’t book after a single visit to a travel website. People like to shop around and compare prices, ask for recommendations and check the reviews. They can make more than 40 visits to travel sites before booking[ref]Travel Content Journey: Expedia Media Solutions; November 2013[/ref] and they can interact with brands in multiple venues (and on different devices) before finally making a purchase decision.
This is called the customer journey, and with travel purchases it can be a very long and winding journey indeed.
Last touch attribution ignores these full conversion paths, and since social media traffic doesn’t often convert directly, its importance on the bottom line has been easily overlooked.
But with improvements in web analytics, it has become easier to unpick these conversion paths and take a much closer look at what is actually going on prior to the conversion.
This is called “multi-touch attribution” and it allows us to model out the various interactions that consumers have with your website before submitting a request or making a booking:
Looking more closely at these multi-channel conversion paths we start to see how different channels can assist each conversion, and where and when certain activities are most effective.
In many of the above examples although the final conversion is secured by a different channel, consumers have previously been “touched” by the brand’s social media activity, presumably contributing to the eventual conversion.
The seventh example above is a common one: a consumer at the research stage of the customer journey finds a site via an organic search but doesn’t immediately convert. Instead they might follow the brand’s Facebook & Pinterest pages and make several subsequent visits to the site, perhaps via links to inspiring images, compelling articles, and so on. Finally, three weeks later, having conducted all their research and evaluated all their options they’re ready to make a booking and they visit directly the brand they’re now familiar with.
In this instance, that social media activity could have been pivotal in securing the eventual conversion. This is called a “social assist” and with multi-touch attribution we can start to understand the true nature of these assisted conversions.
In a recent piece of research from Google’s Insights team, data from 36,000 Google Analytics accounts was compiled to create a picture of how the customer journey works, broken out by industry. The research found that in the travel industry, social media has a ratio of assists to last interaction of 5:2, placing it way out on the inspiration/awareness end of the marketing funnel:At this stage it would be reasonable to wonder exactly how much value those “assists” actually deliver to the bottom line, and we will explore that question in more detail in the following section. But additional research is starting to reveal the various ways in which social media can influence the customer journey.
A piece of research from Bizible.com, a sales analytics firm, found that while search was the most effective channel at driving direct leads, a social media touch during the customer journey was able to dramatically shorten the marketing cycle, i.e. the time taken from first touch to conversion.
Additionally, a social media touch in the middle of the customer journey could significantly contribute to the win rate, i.e. the percentage of leads that actually turned into a sale:[ref]Multi-touch Attribution: Bizible; March 2014[/ref]
It’s clear that while social media can be less effective at generating direct leads itself, it can play an important role elsewhere in the marketing funnel.
This is where social media can be most effective: as a venue to inspire your potential customers, to put your brand on their radar and to instil trust and recognition. Then, when they’re eventually ready to make a purchase decision, they’re much more likely to visit your site through organic, paid or direct channels and they’re much more likely to convert into a paying customer.
Understanding “Social Assists”
What exactly are these social assists, and how do they work in practice? Assisted conversions may come in many shapes and sizes:
A soft conversion can be any visitor action that you define as valuable to your business but not directly leading to bookings or revenue. Think about the other types of conversions that contribute to your marketing funnel:
- Email and newsletter subscriptions
- Brochure downloads
- Page shares (“email to a friend” type actions)
- Social media shares, posts, comments and other engagements
- Hitting a pre-defined time on page (a signal that your content has been fully read and absorbed)
Soft conversions are the seeds from which hard conversion grow, and social media traffic can be particularly well suited to achieving this type of action and gradually moving people further along the customer journey.
Likewise there are many instances where traffic to your site is important, even when it doesn’t directly convert into a lead or a booking. Just because a visitor doesn’t visit your revenue generating pages, they’re clearly still important to your brand. They might be browsing your travel blog for inspiration and research or even simply reading your “about us” and “testimonial” pages to get a sense of who they’re dealing with.
All of these clicks could eventually turn into leads and bookings, and social media can be an effective way of bringing soft traffic back to your website and keeping people engaged with your brand until they’re ready to make a purchase decision.
This is all fine in theory, but as marketers and business owners we still need to know how these “social assists” are delivering actual value and what their impact is on overall ROI. Google Analytics can give you a comprehensive picture of where your assisted conversions originate provided it’s configured properly and you know where to look.
The critical first step is making sure your goal conversions are properly configured for the full range of outcomes that you want to track. Most sites have GA configured to track hard conversions like leads and bookings but we also need to know how social media traffic produces those indirect/soft conversions mentioned above in order to factor them into the full picture. At the very least you should have a goal set up for the following :
- Booking/contact/lead for each of your products
- General contact forms
- Email signups
- Brochure download(s)
But there could be many other actions or behaviours that you’d want to track as a goal – it all depends on your site’s purpose and the actions you’re expecting from your visitors. Other goals could include:
- Reading your reviews/testimonials
- Spending a certain amount of time on a page
- Viewing a certain number of pages per session
- Viewing a product video
- Sharing a page to a friend by email or social
- Clicking a particular Call To Action or other link
Be careful: you don’t want to be setting goals for the sake it of. Only track the actions that have a definable, if indirect, impact on your bottom line.
Once you’ve decided what actions and goals you ought to be tracking you can also choose to assign them a Goal Value, i.e. an actual monetary figure that each goal conversion represents to your business. This can be a tricky but crucial step to making real ROI calculations.
Guides & How-Tos:
- Perfecting your goals in Google Analytics: Yoast; 12 Feb 2014
- Event Tracking 101 For Google Analytics: Search Engine Land; 30 Sept 2011
- When to Use Google Analytics Goal Values: KissMetrics; June 2012 [includes useful info on assigning Goal Values]
- Set up and edit Goals; Google Support
ADD source GRANULARITY
Out of the box GA’s multi-touch attribution reports will show you assisted conversions on a channel level, for example Organic > Social > Direct > Conversion. That’s interesting at a high level but if you’re spending any time on your social media activity you’ll want to go more granular and see which particular social media platform(s) does what, and how each particular activity contributes to your conversions.
This is important when you’re doing different things on various social platforms all at the same time: promotions/offers, running a photo of the week, sharing your blog articles, posting new products & destinations, etc. Rather than lumping all that activity together under “social media” within your GA reports, use Google’s URL builder to “tag” your links and identify each activity and its impact in your reports.
The URL builder lets you assign identifying parameters (tags) to your links such as the source (eg: Pinterest), the medium (social media) and a unique activity name (eg: “photo of the week”), which would produce a URL that looks like this:
(Tagged links look messy but you can easily clean them up by running them through a URL shortener like Bitly.)
Any conversions that have been assisted by your Pinterest “photo of the week” activity would subsequently appear in your GA report as:
[More on how to create these reports below]
The key is to adopt consistent rules to identifying and tagging each activity. The parameters must be consistent to the letter, otherwise they will be recorded as separate campaigns in your GA reports. Think about the most logical way to separate and identify your social activities and make sure they’re consistently applied, especially if you have multiple users working on. See this article for useful details on consistent link tagging practices.
CREATE ACTIONABLE REPORTS
Once you’ve configured GA properly it’s actually very easy to pull actionable reports with the data and insights you need.
Navigate to Conversions > Top Conversion Paths. Straight away this will show you the main channels and how they interact to create your main conversion paths. To break this down further into individual social media activity you need to create a custom channel grouping.
Copy the existing template:
Name the grouping “social media activity” and define whatever social media campaigns/activities you want to track:
Once you’ve defined your groupings GA will output your multi channel conversion reports on a granular level for all your social media activities, helping you understand exactly where and how each activity assists your conversions as shown with the Pinterest example above.
Note that this report will bundle all your goals together, but we’re also interested in how social referrals contribute to soft conversions as well as assist hard conversions and the site’s overall conversion rate.
It’s easy to separate out the different conversion types and analyse them individually (see right).
A well-configured analytics profile can unlock a huge amount of data and shed valuable new light on how your social media campaigns are (or aren’t) contributing to your conversion rates and ROI.
Instead of overlooking your social media activity as irrelevant to your conversion rates, this data can help you understand your full conversion paths, and how social campaigns can be more effective at the top of the funnel and instrumental in engaging and inspiring site visitors, eventually helping turn some of them into paying customers.