How much is your social media marketing worth?

Measuring the value of social media campaigns is not an exact science, but the return on investment is real
Salesforce: partner how much is SMM worth
Photograph: Corbis

Honda has created a social media teaser campaign as it ratchets up the tension ahead of the launch of the new Honda Civic Type R hot hatch in 2015.

With a YouTube film showing the new model being tested at the Nurburgring race track in Germany and a call for fans to tweet pictures of their own journeys in a Type R, social channels will be vital in boosting awareness and engagement for the new launch.

Calculating the value of this social media investment falls to Honda Europe social media manager Simon Nicholson. Working out the return on investment - "ROI" - of social media activity is one of the big challenges for those promoting social channels. One of the main ways of doing it is through assessing the "opportunity cost" of the campaign - comparing how much it costs to achieve a given result compared to other forms of marketing.

One of the big uses of social media for Honda is responding to customer service requests. By comparing the cost of a request via a call centre with the lower cost of handling it via social media, the social ROI can be measured by the saving created.

Yet another measure could be the positive brand sentiment from simplifying the customer service process through social media, though it is hard to put an exact figure on an emotion.

As the Honda Civic Type R will not be launched for another two years, it is impossible to tie the social media campaign directly to sales. But a social media campaign's ROI can be analysed in a variety of ways. From a PR perspective, it could be measured by awareness - the "type r" film got over 300,000 views online while hundreds of fans tweeted pictures and there have been thousands of Twitter comments using the hashtag #typer.

Then again, from a marketing point of view, the measure could be based on conversion and targeting, for instance through the number of people who watched the YouTube film and were then re-targeted with ads, perhaps then signing up for more information. "The metrics you use change depending on the department the social media is working for," says Nicholson.

"Social media has great return on investment. There are some aspects that are difficult to measure, though others you can measure. My advice is to look at all the individual social media activities and measure their specific value rather than trying to judge the ROI of a whole channel of communications," he says.

Salesforce Exact Target Marketing Cloud believes it is possible to directly attribute revenue increases and cost savings back to social media campaigns. For instance, a social media campaign that drives visitors to a brand's website could be compared to the cost of a banner advertising campaign with the same goal. Meanwhile, if a brand creates a social media campaign garnering recommendations from people's friends and contacts, this can boost the amount users spend with the brand. The Salesforce BuddyMedia publishing tool could also save substantially on production costs. According to Salesforce, all of these cost savings and revenue boosts can be added together to give a single figure for the benefits of using a particular social media platform, as well as a percentage ROI.

Many brands are content to use social media to promote conversations about their brand messages rather than trying to make social stack up financially against other forms of marketing.

As Victoria Cripps, brand manager at children's healthy eating brand Ella's Kitchen, says: "It is very hard to put a worth to a Facebook Like or put a financial measure against it. Social is a new medium, so trying to use a lot of metrics against it is quite tricky. But we know it's really important, it drives word of mouth recommendation and brand advocacy."

As the brand's use of social media develops, the marketing department is moving towards calculating hard measures of its effectiveness. The brand tracks a number of factors such as engagement scores and the increase in Facebook fans, though Cripps says the soft measures like "brand love" are most important at present.

The big change could come if Ella's Kitchen moves into e-commerce, as it will then be possible to directly track the effects of social campaigns on sales.

Just Eat, which allows people to order meals from local take-aways online, sees social media as a driver of positive conversations about the brand and as a customer service tool. The main costs of running social media campaigns are the wages of the one or two staff involved, so the company's finance bosses do not demand detailed evidence about ROI.

Social media manager Sarah Morton says: "One thing that's really important in social media campaigns is to work out what you want to achieve. For Just Eat, social media is less about selling take-aways and more about building the brand values and our "don't cook" message. Social is important in creating the anti-cooking theme and establishing a rebellious tone of voice." The brand measures the success of this through analysing comments using the Salesforce Radian6 social listening tool.

Putting a financial value on social media spending is far from an exact science. As brands get more experienced at running social media campaigns, this will give them benchmarks by which to judge new campaigns. For the moment, many seem content to use social as a tool for building up their brands and to get people talking about them.