Measuring the ROI of Social Media

July 17th, 2009 by
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photo credit: pasukaru76

More and more businesses are turning to Social Media to help promote their brand, events, products and more. As more and more businesses participate, it means there are more and more important people in large offices requesting the ROI of these efforts. I just read a great blog post from the Brand Builder on defining the ROI of social media. I talk about this a lot and I like how he summed it up too.

Marketers, “Social Media Experts,” PR people and the like are getting too wrapped up in measuring the tools for measuring social media and not measuring the actual ROI itself. ROI is the measurement of the money in and the money out – that’s it.

What is the money in? Your time. What is your billable worth per hour? Figure that out and keep track of how much time you spend on your social media efforts.

What is the money out? True conversions or sales. The act of someone getting off their duff and handing you some cash for your products and services because of your social media efforts.

Measuring page visits, social mentions, improving your businesses view in the public eye are all very important but they aren’t ROI. Measuring blog subscribers, Twitter followers, Facebook fans all shows that you are engaging, perhaps, but it isn’t ROI. Some marketing professionals are getting clever and changing ROI to “Return on Influence” or “Return on Interest.”  Clever – but the plays on words are going to get tired very soon. The influence and interest are just a part of getting to that actual return.  Return is the actual act of someone getting up and making a purchase, coming to an event, subscribing to your service, donating to your cause, etc.

Comments on your blog shows that the content you are producing is valuable enough for your readers to take time out of their day and reply to your thoughts and words but that isn’t ROI – it shows you are engaging and that is great but we need to be more careful about twisting our definition of ROI and Social Media. It can be measured, it just takes a little more work.

Next week I am doing a webinar on Measuring and Tracking Your Social Media Efforts. I’ll talk about some easy, intermediate and advanced methods for tracking your time and success on your social media efforts. What each of us needs to measure and what each of us considers success will be a little different so the level of measurement is up to you. For most people the investment with Social media is your time, and measuring takes time.

Posted in Social Network Marketing

  • http://www.woodstreet.com Jon-Mikel Bailey

    Seems so simple – the concept – but the way you break it down is certainly helpful. Thanks!

  • http://hallme.com Amanda

    It DOES seem so simple which is why I laugh when I hear so many people tout about how Social Media can’t be measured and you should do it because it is cool and everyone else is doing it. That never worked with my mother (well if your friends jumped off a bridge would you?) so why is that an excuse when using social media for business?

  • http://www.kdpaine.com KDPaine

    The problem is that people seem to think that if there isn’t an automated tool to measure it, it’s not measurable. But in fact, many of the traditional measures, survey research, content analysis and plain old simple math, are the tools you need to measure today. Now we just have to get people to stop whining about why there aren’t any “standards” and get them to actually start measuring!

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About the Author

Amanda

Amanda

With a background in traditional marketing, Amanda knew there had to be a better way. When she got her hands on online marketing and web design, she knew she was on the right path. Today she manages Hall's marketing department and is responsible for marketing services including marketing strategy, implementation, fulfillment, training and validation for corporate clients. When she is not speaking at conferences and to business groups about social networking and conversation marketing, she contributes to the company blog, Vision and frequently presents in our regular webinar series. She is also the organizer of Social Media Breakfast Maine, a board member for SARSSM and can be found blogging for a variety of different businesses and blogs that pique her interest.

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