With the rapid growth of social media, businesses need to focus on analytics and tools to measure and increase their effectiveness online. The right social media analytic tools provide opportunities to measure marketing initiatives and act on insights gained by expanding reach and increasing customer loyalty and retention, ultimately driving sales.

As an eMarketer article points out, 41 percent of marketers had no return on investment figures for any of the money they spent on social channels and only 25 percent are measuring additional sales generated from social media.

Social Media Examiner discusses 5 Reasons You Should Measure Social Media ROI To be able to effectively measure social media efforts, companies need to go beyond brand awareness measurements such as number of fans, followers or friends to conversational exchanges, engagement and online sentiment which will allow it to focus on harder metrics such as ROI. There are numerous metrics out there and no one size fits all approach. But here are some questions that would apply to most companies when measuring social media.

1. Engagement & Participation– Are customers or prospects seeing your message and interacting with your brand? Are there conversations happening and are they being shared?

2. Brand Reach–  What is the audience size that is seeing your content across social networks? Is this increasing or decreasing? Why?

3. Online Sentiment– What is the overall attitude and perception of the company? Are their positive or negative comments and engagement?

4. Influence– Do the people talking about your brand have influence or large followings? Can your key influences motivate others to take action?

What measurements are used at your company? Does your company measure ROI and sales associated with social media initiatives?