Author: Christina Newberry / Source: Hootsuite Social Media Management Measuring the return on investment (ROI) of social is still the bi
Measuring the return on investment (ROI) of social is still the biggest challenge for social media marketers in North America, according to eMarketer. Perhaps it’s not surprising, then, that their second-biggest challenge is securing budget and resources. After all, if you can’t show the ROI, where’s the motivation to make the investment in the first place?
The good news is that there’s no reason to be in the dark when it comes to tracking key indicators of ROI like website traffic, leads, and conversions. These can all be tracked with a few simple bits of code called UTM parameters—and you don’t need to be a programmer to get them working across your website and social media channels.
What are UTM parameters?
UTM parameters are short text codes added to a URL to track important data about website visitors and traffic sources.
UTM parameters work with analytics programs like Google Analytics to provide a detailed picture of your social media success, from the very high level (which networks are performing best) down to the granular details (which specific post drove the most traffic to a specific page).
Also known as UTM codes, UTM parameters are a variant of URL parameters. Of course, that raises the question, what are URL parameters? Like UTM parameters, they are short codes added to a URL. The difference is that URL parameters can be used to dynamically modify content on a website and have some tracking functionality, whereas UTM parameters are for specific tracking functions only.
There are five different UTM parameters: campaign source, campaign medium, campaign name, campaign term, and campaign content. A URL with all five UTM parameters attached would look something like this:
Since that’s a pretty ungainly looking link, knowing how to shorten links is an important part of using UTM codes. We’ll get into the details of what all the parameters mean, what they can track, and how to shorten links later on in this post.
In case you’re wondering what UTM stands for, it’s obvious—Urchin Tracking Module. Okay, maybe that’s not actually so obvious. The name comes from the Urchin Software Company, one of the original web analytics software developers. Google acquired the company in 2005 to create Google Analytics.
Why your business needs to use UTM parameters
UTM parameters provide a whole new world of data that offers three key benefits for social media managers:
- Proving the value of social to decision-makers, helping you secure ongoing buy-in and boost your budget
- Giving you an overall sense of where traffic is coming from and insight into what’s working and what’s not, so you can hone your strategy by focusing on the right networks with the right kind of posts
- Allowing you to test individual posts head-to-head in classic A/B testing style, so you can get the best return on specific campaigns
Measuring and proving social media ROI
Like every aspect of marketing, for social media to be valued, it needs to demonstrate appropriate return on investment and contribute to the company’s business goals. Adding UTM parameters to your social links helps you measure and prove the value of your social media efforts by clearly demonstrating the impact on company revenue through lead generation, referral traffic, and conversions.
You can also get a clear sense of the return on investment for specific campaigns by using data from UTM tracking to find the cost to acquire a lead and cost to acquire a customer—both numbers that are important to those in the company who make decisions about how to allocate budgets.
Refining your social media strategy
Once you’re tracking and reporting on ROI, of course, it will make you look great if you can find ways to improve the results. Monitoring the impact of different social networks and campaigns allows you to clearly see where you’re getting the best bang for your buck, whether that’s in actual advertising dollars or just the internal costs of managing an organic social media strategy.
That information can help you make important decisions about where to focus your efforts. For example, maybe Twitter brings more traffic to your page, but Facebook creates more leads and conversions. Which one is a better use of your budget?
You can use that information to help set relevant and realistic goals, then track when you reach them, helping ensure you focus your social media efforts in the way that’s best for your particular organization.
Classic A/B testing or split testing allows you to test individual marketing variables on a small segment of your audience to see which works better, one at a time, before sending out a full launch. You can also use A/B testing to refine your strategy by testing and validating theories about what works best for your audience overall.
For example, you may think that social media posts with video always perform better. But is that actually true for your audience and based on your business goals? You can begin to test that theory by sharing two identical posts, one with a video and one without, tagged with appropriate codes in the campaign content parameter.
Of course, you’ll need more than just one test to prove an overall theory. Then, if you find that videos do indeed perform best, you can move on to testing what kinds of videos work best, and so on, to further refine your strategy.
For a great example of this in action, check out our blog post on how eHarmony used UTM parameters and A/B testing to find their most profitable type of social content.
How to use UTM parameters
Now that you know what UTM parameters are, and why it’s important to use them, it’s time to set yourself up to start using them on your social media posts.
Step 1: Set up Google Analytics
There’s no point in using tracking codes until you have a way to collect and analyze the data they provide. So, before we look at how to use URL parameters to track your social media posts, you need to set your website up with Google Analytics.
- Create a free…