It’s important to all entrepreneurs to follow the effectiveness of their investment strategy.  Regardless what the water cooler talk is on the latest stocks or ground floor opportunities, what matters isn’t buzz, but results!  With all the talk about social media, you want to be able to analyze data that shows your return on investment.  In this article we’ll look at 4 steps to tracking your investment in social media marketing.

First Step: Track your Social Media Efforts Consistently and Accurately

Differentiate the results of social media: To correctly track your social media ROI, you’ll want to ensure you are tracking both your direct social media efforts, such as links you have placed on social networking sites, as well as organic social media returns that are placed by outsiders.

To do this, you’ll need to make consistent use of campaign tracking.  Campaign tracking must be added to each link you leave at social media sites that direct people back to your site.  Remembering to use campaign tracking is easy when you use Google’s URL builder tool, but it can get tricky if you don’t carefully assign names to specific parameters.  You’ll want to keep careful track of your various campaigns for accurate reporting results. Google campaign tracking is capable of using 5 different marketing dimensions:

• Source
• Medium
• Term
• Content
• Campaign

Although you don’t need to use each one of these categories in all your campaigns, it’s important to identify your links so you know where they’re coming from and why you’re getting the results you are!

Once you can see the results of both your direct social media efforts and the results of 3rd parties that link back to your site, you’ll be able to replicate and redouble your efforts with a more informed strategy!

Second Step:  Consider Last Click Transactions from Social Media Sites

It’s great to know which social media sites drove traffic to your site, but Google Analytics, when used with the advanced segments discussed above, does that and more.  Social media’s value can’t be measured based solely on last click transactions, so you’ll need to complete a couple of more steps to ensure you get great data.

Third Step:  Consider Data from Social Media Assisted Transactions

Although its use is currently limited to the beta version, Google Analytics tools for tracking these types of transactions will be invaluable for the entrepreneur attempting to gauge the effectiveness of social media campaigns. This tool allows you to go beyond the last click and determine a referral to your site within the last 30 days.

Now you’ll have two great segments of data to compare: Last click transactions as well as social media assisted transactions from the last month.

This data alone, however, doesn’t take into account the benefits that social media gives to your business, either directly or indirectly. Remember, brand recognition and word of mouth are just as important as page visits when it comes to conversions.

Fourth Step: Record Social Media Influence That Occurs Off Site

By adding a couple of easy-to-answer questions (such as drop-downs) to your checkout process, you can collect information that can be recorded in Google Analytics and used to analyze social media efforts that may not come in the form of last click or social media assisted transactions.

Ask your customers what most influenced their decision to purchase, or which social media sites influenced their purchasing decisions. Many decisions to purchase can be driven by social media, but not necessarily result in click-throughs to your site.  This happens when a customer searches using keywords or your company’s name some time after having heard about you through a social media outlet.   Google Analytics allows you to set both transactional and non-transactional goals so you can get a better perspective on what social media marketing is doing for you and your business.

Social media sites are here to stay.  But just as ignoring them can be damaging to your business, so can attempting to use social media marketing without properly assessing its effectiveness.  Using Google Analytics and following the 4 steps described here will get you on the way to effectively measuring your social media investment.

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