What Does Measuring Social Media ROI Really Mean?

The question that everybody involved in Social Media marketing asks is, of course, what returns am I getting? What is my ROI?


http://activerain.com/blogsview/227039/fha-conventional-apr-vs-rate-understanding-the-differencereturns am I really getting. What is my ROI?

Well, what’s the problem?

As I am sure all of you know, this is sort of a loaded question. The problem begins with the fact that Social Media promotions and campaigns rarely translates to immediate revenues. When you get that new follower on Twitter, or a new “like” on Facebook, how long will it take before that initial interaction finally turns into a sale – 2 days? 2 Weeks? 2 Years?

Loyalty, Loyalty, Loyalty

What I think we all can agree on is that Social Media is primarily a channel used to build relationships with your customers / clients. This would mean that it is a medium in which you can have a genuine dialogue with them in real time. This constant interaction with your customers / clients results in the most rewarding aspect of Social Media: Loyalty.

So What Does Social Media Really Mean?

Knowing that Social Media is about getting and maintaining loyalty through interactions with your fans, I think the expression of Social Media ROI should extend beyond mere dollar amounts.

Sure, you may be able to measure just how much in $ terms your fans are worth as I attempted to do in the post - 4 Steps to Measuring Facebook ROI, but it will never capture the full value of Social Media.

The real value in it lies in the interactions you have with your fans. What you should be doing is creating metrics in which you calculate the % increase in likes or engagement on your page. You must be able to say for instance: “The rate of commenting on our Facebook page has increased by 120% during the promotion”.

An increase in engagement, likes, or even reach is in itself an ROI measure in itself. Even though it is difficult to express them into dollar amounts, these metrics are indeed returns as they do bring in revenues for your business in some way or another.

ROI means Return on Investment – no part of it says that it has to be in dollar amounts.

  • http://www.icstars.org/blog/elannert?utm_source=disqus&utm_medium=b&utm_campaign=b Eric Lannert

    Geoffrey, great article. In using social for IT Marketing, we see a 4 part model emerging for measuring ROI. Per your points, engagement and relationships matter – we find the ROI is in better understanding the content that engages and use that to drive the editorial . We wrote a quick blog about measuring engagement that shows how to do it. Second, by using google or kissmetrics events on a blog to measure the percent of content traffic that converts to marketing traffic (e.g. clicked to learn more about services), you can again see what content engages the audience. Third, we developed a tool for measuring clicks on links shared via twitter to 3rd party content and analyze the results by hashtag – this again gives the business insight into the content that engages. Fourth, and perhaps most profound, if the business has a way to digitally measure an outcome (e.g. downloads), you can run a regression analysis that correlates changes in social activity (followers / mentions / tweets ) with the business outcome. When looking at long periods of time it is very clear how sustained social activity drives business outcomes. We will be posting a blog on this soon.